At SAP TechEd, we got the chance to question some of their senior executives over the SAP strategy on Software as a Service or on-demand. Shai Agassi had mentioned the topic in his keynote session as "just another deployment option" which they provide for their customers as well. Later at a press briefing we got the chance to ask Peter Graf, the Executive Vice President of Global Solutions Marketing, and Zia Yusuf, the Excecutive Vice President of Platform Ecosystem Development,more on the topic. Their positioning is that they see on-demand as a useful, starter option that they make available for an enterprise that needs to implement an off the shelf approach to CRM or maybe SRM in a few days. However, they differentiate themselves from the pure-play SaaS vendors in that you would only use it for these "peripheral" applications, and they believe that customers will only get real value and competitive advantage if they bring these applicationsin-house, on premise and customise them making use of ISV expertise or their new channel for downloading xApps from the community. When Dennis Howlett asked them about Salesforce.com AppExchange, which allows you to pick and chose from plug in applications to customise your Salesforce implementation, Zia twice dismissed it as:
"just a directory of companies"
and went on to say:
"we're working in different leagues."
When Dennis referred them, in the typically colourful terms that we bloggers tend to use, to Peter Graf's recent comments on the topic as quoted by Phil Wainewright, feathers were ruffled and Bill Wohl responded:
"We're not in a pissing competition to use your words"
Talking to Zia afterwards, it's quite clear that they don't recognise AppExchange as a platform, and are frustrated by the amount of attention generated by the recent Apex announcement which they don't see as a new or significant programming language. I believe they are doing themselves a disservice by dismissing AppExchange/Apex in this way. The platform offered by Salesforce may be lightweight, and the range of add-on applications and enhancements may be limited, but it is clearly more than just a directory. From what I've seen at this show, rather than just playing the size game,they have plenty of ammunition to argue the positive strengths of the SAP value proposition against the upstart new platform, and avoid these inaccurate statements. In any case, the lines between on-premise and on-demand are being blurred. They argue the strengths of NetWeaver's ability to link their applications in to other web-services and systems, and following on from Dennis, James Governor asked how they were going to control the Internet based applications coming out of theirSAP Developer Network - but he didn't get much of an answer from Peter.