deadlock sap christian klein cloud [shutterstock: 1541693840, MeSamong]
[shutterstock: 1541693840, MeSamong]
Blog Editor-in-Chief

Once SAP, Always SAP? Not Anymore

SAP is trying to square the circle. As much as it pains me to say, it will fail. The transition from Bill McDermott to Christian Klein should have been planned more thoroughly.

I don’t want to give grades like we’re in school, nor shame any particular managers. For me, it is about the SAP community, about a sustainable, reliable roadmap for customers. Extended maintenance for ERP/ECC 6.0 was an important step. At the very latest in 2030, customers should have all the answers they need to evaluate which ERP system they want to work with for the next 25 years. Once SAP, always SAP? Not anymore.

CEO Christian Klein is using his analytical mind to try and square the circle for SAP. What some brilliant mathematicians managed to do with the Great Fermatian Theorem after 350 years, the three musketeers – Christian Klein, Juergen Mueller, and Thomas Saueressig – will probably not manage to do any time soon. After the rough handover of SAP leadership from Bill McDermott to Jennifer Morgan and Christian Klein, the challenge still seemed relatively simple – much like Pierre de Fermat’s 17th century theorem.

Fermat’s starting point was the Pythagorean theorem, which everyone knows and has used many times before: a² + b² = c². Within a few minutes, the theorem of Pythagoras can be proved, leaving no doubt to its validity – which we could compare to greenfield customizing of Hana and S/4. What Fermat then did was not only very descriptive, but at first glance very simple; similar to Bill McDermott’s well-known mantra ‘Run Simple’.

Fermat replaced the square symbols in the Pythagorean theorem with ‘n’, with n equals greater than 2. Now what? Is there a solution to the equation an + bn = cn? After 350 years we know: It is only possible for n equal to 1 or 2.

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Christian Klein has neither the time nor does he appear as a team player. Shortly after the new dual leadership at SAP was announced, Klein took the helm by himself, and SAP co-CEO Jennifer Morgan had to go.

Constructive dissent is not welcome

Under Bill McDermott, the former Chief Technology Officer Bernd Leukert had to leave overnight because he had different ideas about the integration of McDermott’s cloud acquisitions. Currently, Leukert is very successful as CTO at Deutsche Bank. Cloud pioneer and SAP board member Rob Enslin experienced a similar fate. His opinion differed, and he went to Google. Jennifer Morgan also had to leave, as did SAP board member Adaire Fox-Martin. However, major challenges can only be resolved as a team or together with a community, as was the case with the Great Fermatian Theorem.

It is questionable whether a solution might be found at all. In IT, you would speak of a deadlock. If CEO Klein satisfies his existing customers, he loses the cloud narrative. If Klein pretends to be innovative and buys a startup like the Berlin-based company Signavio, then analysts and the press celebrate him, but existing customers are left confused – a product similar to Signavio’s process mining, supplied by Celonis, has been on SAP’s price list for many years.

The cloud seems to be the biggest construction site at the moment, as new SAP customers naturally gravitate to the initially low-cost cloud model. Financially, it would be important for SAP to not only make a quick S/4 release switch, but also to lift its existing customers into the cloud. Another deadlock: Cloud is the order of the day, but long-time customers often prefer to remain on premises. In the long run, cloud seems too expensive and too inflexible. And just as SAP has no answer to what will happen to AnyDB after 2025, there is no convincing cloud exit strategy. But if you don’t know how to get out, you obviously don’t want to get in – another deadlock.

The list of inconsistencies seems almost endless: SAP’s existing customers are presented with one no-code/low-code application after another. A few years ago, SAP reached an agreement with the Siemens subsidiary Mendix. Last year, Chief Technology Officer Juergen Mueller presented Ruum as SAP’s own low-code offering. A few weeks ago, Christian Klein announced the acquisition of Berlin-based startup Signavio. Its planned focus will be on process mining, but Signavio also offers a no-code application. In mid-February, SAP acquired no-code developer AppGyver. Consequently, in the next quarter, four no-code/low-code vendors should find themselves on the price and conditions list – SAP’s customers are spoiled for choice.

What looked simple at the beginning of Christian Klein’s CEO career, like the Pythagorean theorem, has snowballed into the problem of a century, similar to Fermat’s theorem. If things continue in this direction, SAP will come to a standstill, and the deadlock will be final. However, SAP’s new executive board offers hope. The combination of newcomers from Microsoft, Sabine Bendiek and Julia White, and long-time SAP employees like CFO Luka Mucic might be perfect to tackle the challenges that lie before SAP.

Source:
E-3 Magazine March 2021 (German)

About the author

Peter M. Färbinger, Editor-in-Chief

Peter M. Färbinger is Editor-in-Chief and Publisher at E-3 Magazine, B4Bmedia.net AG, Munich, Germany. He can be reached at pmf@b4bmedia.net

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