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Retreading SAP’s Metaphorical Tires

The end of SAP as the community knows it is upon us. However, the Supervisory Board, the Executive Board, and the IT community still have a chance to save the company. Unfortunately, false impressions and convenience are preventing SAP from retreading its metaphorical tires.

In my youth, I learned how to be a vulcanizer at the Munich-based company Stahlgruber, an SAP inventory customer and well-known manufacturer of the Tip Top tube patches for bicycle tires. A vulcanizer has two main fields of work: repairing conveyor belts and patching tires and inner tubes. One specialty was automobile tire retreading. Back when resources were still valued, and people preferred to repair their belongings rather than dispose of them, retreading car tires was a respected craft. The tire rubber is milled down to the carcass, new rubber is applied, vulcanized, and a new tread is cut. Normally, these tires are only approved for speeds of up to about 80 km/h (50 mph), but there are numerous applications where this is sufficient.

Now, it’s SAP that needs retreading. Why? Because it is a cause for concern when basic values and parameters that are nowhere to be seen on the balance sheet. This is not a scare tactic, but rather a call to take a closer look. SAP published its quarterly figures near the end of April and celebrated another success with cloud computing. On the day CEO Christian Klein and new CFO Dominik Asam announced the figures, the share price catapulted upwards by around five percent.

Success in the cloud

But where does this sucess in the cloud come from? From SAP systematically reducing its on-prem offering. The best-known example is APO, Advanced Planner and Optimizer. The supply chain planning tool with an in-memory database for MPR runs has been discontinued. Its successor is called IBP, Integrated Business Planning, and is praised by SAP partners and existing customers for its functionality.

However, IBP is only available as a cloud offering. The path from APO to IBP is an involuntary step from on-prem to the cloud. This automatically increases SAP’s cloud revenues on the balance sheet—an elegant no-brainer. SAP is acting disorderly: customers are not persuaded to join the cloud, but rather forced. As many users as possible are currently trying to resist SAP’s cloud computing compulsion.

In view of the current price increases for cloud computing from Microsoft, many IT managers have suddenly become aware of the dependency this operating model leads to. Public cloud acts as the final vendor lock-in for SAP customers, and many IT users are currently trying to prevent this disastrous result. They can achieve this through a private cloud (on-prem) solution in their own data center. According to sources within the SAP community, the automobile manufacturer BMW from Munich did not find SAP’s IBP solution viable for them. Although it is still possible to execute supply chain planning with IBP, BMW could not allow their factory systems, which would only be accessible in the cloud, to be dependent on externally specified maintenance windows. With this in mind, cloud computing appears to be a disruptive model for many SAP customers.

Disruption and Fluctuation

Disruption and fluctuation are not parameters you will find on any balance sheet; however, they determine the SAP community’s success. An example of this is Sabine Bendiek, still a member of the SAP Executive Board and above reproach as an IT manager, but who did not feel at home at the ERP world market leader. She will not be renewing her contract and will leave the Executive Board at the end of this year. Other board members will remain, even if their presence and balance sheet are not necessarily any better. SAP currently has no marketing. Corporate communications are non-existent—with or without corporate spokesperson Oliver Roll, who will also leave the company this year. Any motivation and enthusiasm for visiting one of the SAP Sapphire events in Orlando, Barcelona, and São Paulo is in vain. SAP’s 50th anniversary celebrations took place largely out of the public eye last year. There was no proud appearance in the media or broad communication with the community—SAP’s marketing department is obviously unaware of the strategy “do good and make it known”.

SAP must retread its metaphorical tires. CEO Christian Klein will build a new team over the next 24 months with new Supervisory Board Chairman Punit Renjen starting in 2024; this could be a change for the better. Former Deloitte CEO Renjen is only about 20 years older than Klein, and he can operate without legacy issues and other considerations. People in key positions that have past ties with the Hasso Plattner Institute can be reevaluated. The former Deloitte manager will likely approach the missing marketing and communication aspects differently. With Punit Renjen, Christian Klein will have a partner to retread SAP with.

Any questions, comments, or concerns? Feel free to let us know in a comment below!

About the author

Peter M. Färbinger, Editor-in-Chief

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

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