Bloggers, analysts and the press were hosted in the same area of the mega SAPPHIRE 07 show last week, although there was limited mixing of the 3 communities, even though we attended many of the briefings together. Duncan Jones, a senior analyst with Forrester stumbled upon the Bloggers corner in search of a compatible power supply for his laptop, started chatting with us and took the trouble to read a few of our posts. He just sent over his commentary on the show. I like the way he's woven in The Third Man (one of my favourites) to his piece, although that makes it even more ironic that he doesn't mention us bloggers being around - kind of the opposite to Harry Lime, who is talked about all the time in the movie but almost doesn't appear. We bloggers were very vocal in our questioning, and making a positive (constructive) nuisance of ourselves, way beyond our team size. Duncan cleverly references the waltz and picks up on a Freudian slip in a press release, but reading his analysis highlights the lack of headline news emanating from the show. Even though there was little new talked about, I actually believe there is something potentially game changing going on.
Before I get to that, let me say there is plenty to be critical about. I know if our friend Vinnie had been with us, he would have pressed them on the cost of maintenance and length of typical implementations, but we heard nothing new on that score. Dennis Moore, Senior VP of the Imagineering team, dropped by Bloggers Corner and talked about the cool things they are doing with widgets, scripting language and Duet - SAP's product that integrates Microsoft Office with the ERP system. The functionality and the interface look great, but when you hear that there are only 300 customers, out of an SAP customer set of 39,000, it is hardly mass adoption. In fact Dennis thought that 1000 customers would be huge adoption of an SAP product or idea, or talking about their scripting language environment:
"If 1% of the 4000 people who downloaded it actually uses it, that will be rapid take up."
There's not a lot you can say to that! And that connects with a cool, web 2.0 style collaboration demo Ian Kimbell added in to Henning Kagermann's keynote. It looked great, but I can't help feeling it was the result of weeks of development effort, rather than the hours (or minutes!) required by so many of the current tools available. Similarly, SAP missed a big trick by not showing more of their new mid-range product, code-names A1S. If it really is currently installed in 150 customers, they can surely do more than a 3 minute show of a few screens, that might as well have been mock-ups on PowerPoint. Not giving a proper demo just leads us to think they have something to hide.
In the Dennis Moore session he was asked about the Oracle culture versus SAP, as he has experienced both. He was pretty scathing about the command and control nature of Oracle, set against the consensus culture of SAP. I have to say, having met Henning in our private session, it's refreshing to see a quiet, bright and cultured engineer in charge of a major corporation - quite a contrast to the confrontational Oracle style of Larry Ellison, or Marc Benioff (who still sounds like the Oracle guy he used to be).
Talking about their culture, style and strategy, Sig commented yesterday that:
" they do understand snippets of the Cluetrain."
That's evident with their SDN, BPX and the Industry Value Networks (IVN). Community is now a major part of any brand, and SAP are tapping in to that. You might say that these communities aren't much more than glorified forums, and developers have been using those since Usenet, two and a half decades ago. However, the statistics are impressive - SDN has 750,000 members, BPX has 128,000 members and together they had 5,000,000 unique visitors last month. Taking Banking as an example of one of their IVNs, it has 130 industry participants including 20 financial institutions (some of whom aren't SAP customers) and 13 software partners. They "get it", and are embracing community in a way that their opposition just aren't.
And then we come back to their move in to Software as a Service for the mid-range. We still haven't seen A1S properly, but I can't help feeling it is as significant for them as R/3 was in the 90s. They have the challenge of making the new business model actually work inside their current culture, when I'm sure it would have been better off as a completely separate entity. Selling the product through the web and telesales will not sit comfortably alongside their traditional sales approach. They also have a basic marketing problem, where SAP stands for big, complex, expensive, and long projects in the mind of the prospect. BMW owns the MINI, but it has a separate brand identity. It would surely be easier for A1S, which they tell us has one tenth of the cost of ownership of their traditional systems, with a little distance from its parent. I'm also confused by the fact that they aren't on a major recruitment drive to find the different type of partners they will need to help sell and support the new product. The current ecosystem is used to significant consulting revenue, rather than quick, standard implementations and then on to the next one.
However, even though we've seen so little, I've heard enough from their smart people to be convinced that they have a potentially "game changing" suite on their hands, that can capitalise on the trailblazing that has been done by the likes of Salesforce.com. I think they are making life difficult for themselves, but the market will decide. From the recent surveys I've seen, there is plenty of appetite in the market for online systems - it's just a shame we have to wait until Q1 2008 to see the beginning of the next wave.
Yesterday, 4 of the Irregulars who had been at SAPPHIRE had a conference call, instigated by Charlie. Actually, my broadband was down, so I was on my Dad's PC where the microphone wouldn't work. I listened to what the other guys were saying, and then used cut/paste to IM them all comments - slightly surreal. I knew Charlie had written a long post, so I purposely wrote this before I read his "The Third Era of SAP". Different journey, same kind of destination. As a result of the call Sig picked up on the marketing aspects of our discussion.
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