Is SAP the better cloud service provider?
SAP is probably the most valuable IT group in the world—but hardly anyone knows that, least of all SAP itself. Pointless discussion about cloud computing has severely weakened the ERP world market leader in recent years. Instead of focusing on its unique and still undisputed core competencies, SAP is pointlessly trying to prove that it is the best cloud service provider.
The situation is comparable to if a renowned and successful car manufacturer decided to operate a refinery simply because car engines need diesel or gasoline—and whether the bet will pay off now that car manufacturers are setting up their own battery plants also remains to be seen. Stick to what you know: successful car manufacturers do not run construction companies just so they can build highways , nor do they develop parking garages. Likewise, SAP should keep its hands off hosting, hardware, databases, and cloud computing. But SAP could not resist temptation and was ultimately overtaken in CRM core competencies by competitor Salesforce in terms of revenue and stock market value this summer.
If SAP is not a perfect cloud computing provider because Microsoft, Google, Alibaba, or Amazon have more years of experience and better scaling effects, then no one can hold that against them. Latecomers always have it a little harder. If SAP is not perfect as a database provider because its own in-memory database is still young, then no one can hold that against them either. IBM and Oracle are old warhorses in that area.
If SAP does not have a perfect CRM system and its own existing customers are migrating in large numbers to its competitor Salesforce, then alarm bells should be ringing throughout Walldorf, the main headquarters of SAP. CRM is as much a part of ERP as SCM, HCM, finance, and controlling. If SAP fails in its core competencies and loses revenue, profit, and market value to Salesforce, then the management board and supervisory board must ask themselves whether there are fundamental problems here beyond exchange rate fluctuations, war, pandemics, and working from home.
One of the co-inventors of CRM has lost out to a newcomer in cloud services. Salesforce has overtaken the ERP world market leader SAP with its CRM product idea. How could this development occur? Does Salesforce have better programmers? Does Salesforce have a better sales concept? Does Salesforce have better management? I think the answer to all these questions is no. SAP’s fundamental problem is its product-oriented approach—which is why the SAP community must now help the ERP world market leader.
In many business sectors, it is no longer about functionality, quality, and price, but about communication. Over the past twenty years, there has been a transition from functionality to meaning. Many years ago, Audi advertised its cars with emphasis on the Quattro, a four-wheel drive. This feature was unnecessary for most people, yet it triggered consumers’ desire.
For many years, the point of having an Audi in Salzburg, Austria—where I reside—has been to bring visitors safely and comfortably to the world-famous Salzburg Festival. But Audi has now changed its entire brand message from Quattro to culture. It is not the technology itself that is the competitive edge, but rather what the consumer can do with that technology.
An example of marketing, of pure and simple storytelling, is the image of a smooth ride in an Audi e-tron on route to the Felsenreitschule Theater at the annual Salzburg Festival to see the sensational performance of the Czech opera “Káťa Kabanová” by Leoš Janáček, starring the stunning Corinne Winters as Katěrina (Káťa).
SAP CEO Christian Klein and his colleagues on the executive board have not mastered this type of storytelling. Christian Klein still recites the functionality, quality, and interoperability of BTP, Hana, and S/4 to his customers. What users are supposed to do with this technology is all up to them.
What Christian Klein refuses to, and perhaps is unable to, use is storytelling. SAP has been overtaken by Salesforce because the other CRM provider tells all the right stories. Ex-SAP CEO Bill McDermott was an excellent storyteller. ServiceNow, where McDermott is now employed, will soon overtake SAP as well. We should all help SAP tell good stories because there are more than enough of them to be found in the SAP community. As the community very well knows, SAP is probably the most valuable IT company in the world.
SAP will terminate by 2025 their own on-premise Middleware solution Pi/PO and force users to BTP. That’s a very bad move and excellent way to piss off existing customers. Can you please tell me how that story will end?
Thanks for the great question! Unfortunately, we don’t know the answer. It seems to be a trend, as you correctly pointed out: NetWeaver PI/PO is being replaced by BTP. What will become of Abap? Steampunk? What will become of APO, Advanced Process Optimizer? Or of the successor product in the cloud: IBP, Integrated Business Planning, and so on….
How is that possible ..if it developing was in perfect codes the no failed of intergrate.source
We have observed that many SAP programmers want the right thing, but management often has radically different views.
Why must we help them?
They don’t even given credit for your efforts.
Sorry but when they have been sitting on their proverbial backside on issues which they knew were there from 30 yrs back until now because they SAP think better is utterly rubbish.
Start by rewriting FICO. Get rid of the stupid residual documents. Entire fico belongs in the mainframe era. By giving it a make up with fiori which is itself lot to be desired to hana for which not even sap can figure out how the optimisers behave.
Sorry either rewrite or be doomed. Having done both oracle and sap. I can tell you oracle financials is decades ahead from ui functionality and ability to extend.
Thank you. Your view coincides with our findings; you are absolutely right. However, at the end of the day, it’s about the SAP community—we’re all in the same boat here. SAP has potential, but often shoots itself in the foot with its corporate policy. However, it’s necessary to differentiate between the honest and dedicated programmers and a disengaged and aloof management.
One comment i want to say here; they have got really bad apples – as consultants. they want you to engage in colab; then their own consultants will write a back stabbing letter to your own VPs via SAP VP accusing you of paguirism; when it is the other way around. Did they fire these consultants? Of course not. They still dangle them in front of clients as must have but know nothing. Twice burnt by these people.
So, why should we help? We can make our solution and licence it vs giving it to SAP so that they enjoy your work.
Do not engage in Colab when SAP does not give you credit or respect your ideas; but will sponge off and give you zero credits.
Eh, fuck SAP. They once put me out of a job.
As far as I know (as someone who works on cloud infrastructure within SAP), SAP is just delivering it’s products hosted in cloud (SaaS model, same as Gmail) rather than trying to be a cloud computing provider . SAP is NOT a cloud computing provider at all the way your article mentions. Therefore your comparison of SAP to Alibaba, Azure etc is meaningless.
In fact, SAP is using Microsoft, Google, Alibaba and AWS itself for the underlying cloud infrastructure. Yes, there is a private cloud offering from SAP but it is restricted only for the use cases where a public cloud platform cannot be used due to security or legal/political reasons.
I believe this article is quite misleading and is not properly researched at all.
SAP Successfactors, Ariba, Concur as well as BTP (Business Technology Platform) and Hana and S/4 are available as SAP cloud offerings.
Hana and S/4 also also available with other hyperscalers.
This person don’t know what he is writing. SAP not into cloud business. Author doesn’t understand the ERP/CRM and other enterprise domains. Looks like a paid article to undermine SAP
Since SAP Business ByDesign, SAP has been investing heavily into its own data centers worldwide. There are partnerships with hyperscalers, but SAP also offers public and private cloud services for S/4 Hana from its own data centers.
He is correctly writing. Unfortunately too many people have either been paid to buy sap or drunk koolaid because they have not seen what is our there. Have done oracle r3 fusion oracle cloud and S4 Hana. I can tell you this article is right on the mark.
Sap is sleeping and the tsunami is here.