Variety is expensive and complex. This realization hit home for the first time when SAP released its ERP version R/3.
It is unknown just how many possibilities for combination between hardware, operating systems and data bases for which R/3 can be customized exist. First, this was regarded as open-mindedness, as innovation. After a while, however, it has developed into a juggernaut that can‘t be controlled.
The quote from Henry Ford (1863-1947) is well-known, “Any customer can have a car painted any color that they want so long as it is black!“ Now, SAP can say the same about its products, “Any customer can use ERP with any data base they want so long as it is Hana.“
What happened? The ERP monopolist is mutating into a data base oligarch. Due to its power over the market, SAP can decide which hardware, which operating system and which data base customers have to use. This seems logical and justifiable on the one hand, but hostile to the market as well as customers on the other hand.
Hell for SAP
SAP had to jam the brakes! The variety of IT architectures for ERP/ECC 6.0 is nearly impossible to keep track of. For the user, this is beneficial when negotiating with IT providers. For SAP service and support, this is hell.
To find errors in a system with dozens of variables is like painting the Forth Bridge; it’s a never-ending task with little to no reward. Finally, SAP had to provide every infrastructure variant consisting of hardware, operating system and data base to be able to give adequate answers to its customers when in need of support.
The “Hana consolidation“ to one certified hardware, two Linux OS versions and Hana seems understandable from SAP’s perspective. Of course, other tactical reasons were a deciding factor as well – for example, to get an edge over Oracle. How this situation with a singular data base will turn out remains to be seen – in 2025 at the earliest.
The data base monopoly of SAP is also developing into a monopoly of attitude: SAP is ever more often coming to the conclusion that SAP software is the only right thing for existing customers.
With the new CRM initiative C/4, SAP wants nothing more than to monopolize the entire customer experience supply chain. Whoever is still using SAP Hybris, Salesforce and Adobe as well as ECC 6.0 or S/4 in their back-office for their online shop will have to consider whether or not the additional licensing costs for Indirect Access are worth it or if they are simply going to switch to C/4 and Hana.
By combining individual offers to packages, SAP reduces customer’s choice. Therefore, it is not hard to imagine Bill McDermott saying, “Any customer can have any CRM and supply chain combination that he wants so long as the combination is C/4 and Hana.“
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