Radical Change At SAP

Since its inception, SAP’s economic, organizational, and technological innovations have revolutionized IT. The ERP company built its foundation on its unique selling point (USP): focusing on software at a time when IBM still raked in billions with hardware. The single point of truth as central database server in a three-level client/server model was revolutionary, the many business algorithms were unique.

USP down the drain

Now, however, SAP seems to be playing the field. It offers a lot of popular products and new trendy buzzwords, but none of them are truly unique in the way its ERP software had been. SAP is well on its way to not have a single USP left come 2030.

Even the carefully orchestrated Hana lock-in isn’t as airtight as SAP would like it to be. S/4 will only be able to run on “Hana”. However, open-source solutions, new processors, and simulation programs will birth countless Hana clones that will probably be quicker and more cost-efficient than the original.

For SAP customers, this vision of the future isn’t necessarily bad if it means more open and cost-efficient hardware and software, Hana-compatible databases, and the choice of numerous ERP modules from SAP, partners, and third-party providers. SAP, however, will have to adjust its prices to the market, as it will lose its position as primary ERP provider.

It’s all about perspective

Of course, SAP CEO Christian Klein is telling a different story. He praised SAP’s Q2 figures as a “fantastic quarter”, and if he can deliver on his promises for the rest of the year, he’s not far off. However, customers and investors are expecting more from SAP.

For example, they expect a roadmap past 2023. How will SAP’s ERP world look after 2025? What will happen after 2030? Promising the Intelligent Enterprise without giving concrete answers to these and more questions only raises more questions. Migrating to S/4 Hana takes courage but migrating to S/4 Hana without a solid roadmap and planning security takes blind loyalty.

Radical change

SAP will face many challenges in the upcoming years. While it might be necessary to transform its legacy products, it shouldn’t lose sight of what made them so unique. It shouldn’t try to copy other IT companies; SAP should try to find its own path, even if it includes radical change.