Industry trends and changes……

Over the past couple of days I have seen web articles from several industry analysts that portray the changes that they believe are underway in the Enterprise software sector. The main premise is that the economy and the changes in technological offerings (mainly SAAS) mean that customers will be reviewing their software choices going forward with significant change in the way they operate.

I’d offer some views on this.

Firstly private sector vs public sector. Whilst both sectors have the same drivers, the risk appetite driven by different imperatives means a different outlook on things. Take for example the cloud – will private and public use the same cloud? Unlikely given the degree of information sensitivity. Will all parts of the private sector use the same cloud – unlikely with different availability, security and usage requirements.

Secondly – will every business process be the same in every organisation? Yes, where it is governed by regulation. No where it is deregulated or offers different value propositions depending on the way it is delivered.

Thirdly – current investments versus future costs. The case being positioned is that saas saves significant money. How does it do this? I have to pay a licence fee for not just the software but also the hardware (indirectly).  Hmm…I do that today so it must just be the margin being worked on by this supplier is lower, or maybe I can now pay just on what I use rather than what I need? Oh and I need to retrain all my staff in the new buttons to press and the way in which you manage and report issues….and what do I do with the current investments and asset values on my balance sheet?

So where is this all heading? That is actually the big question! Will SAAS be the saviour of organisations? Will it replace the current vendors? The answer is yes and no, and I’m afraid that is the likely answer for all these initiatives because at the end of the day there is no single factor that can drive things in this marketplace. What is certain is that these saas changes will drive some change and that means more choice in the way things are done, and more choice generally means better value.

Now that is something that everyone wants.

Interview in

I was recently interviewed by SAP Info – SAP’s monthly publication. We discussed many things – the open content of the discussions and its publishing shows a new and positive engagement with SAP.

Well worth a read (at least I think so)!

Changes at SAP…..

I thought I should pen a few words around the changes at SAP.

In  just a few days there have been big changes.  If you haven’t already seen the leadership team has changed.  Leo Apotheker has resigned and the board appointed two co-CEOs: Bill McDermott, head of the field organisation and Jim Hagemann Snabe, head of product development. Meanwhile, CTO Vishal Sikka has been appointed to the SAP Executive Board, of which McDermott and Hagemann Snabe were already members. In addition, SAP named Gerhard Oswald, a board member in charge of SAP’s service and support operations, as chief operating officer. John Schwarz who joined from Business Objects and who was also a board executive resigned as well saying that the integration of Business Objects into SAP had been successfully completed. At the same time Hasso Platner is back to take on an overseeing role in the company at the request of the supervisory board.
Over the last 18 months, (twice as long as Leo Apotheker was in sole charge) SAP through unwisely embarking on their Enterprise Support path changed its relationship with its customers. At the same time the world has changed as a result of brutal economic conditions that means the value that IT offers to the enterprise is now under a much higher level of scrutiny.
Many of us have felt that SAP recently were not as customer friendly as they have appeared in the past. However, in recent months all that has changed with a far more proactive approach, certainly evidenced through the interaction with the user groups. The company has also been criticised by some for losing its way technically. This is not true. Let’s be clear, technical developments continue to come from the research teams and are creating a more robust solution through:

  • the mainstream support of their core product with enhancement packs,
  • the development of the Enterprise Support package to deliver demonstrable value,
  • the availability of the hybrid software as a service solution,
  • and the incredible integrated Business Objects solutions that are being offered.

I hear a lot of criticism from the software industry pundits, but I also hear a lot of praise from the real users of the products, and they know more about the value being delivered than the pundits.
The new structure (with a joint CEO) in my view offers a lot of promise. It is important to have a balance between product and sales. At the end of the day you need great products and then you need to sell it well. Selling in this context means highlighting value, explaining it well and then effectively delivering that value. This is something you’ll get with a product/sales combination. Leo inherited the company at a very difficult time and he also inherited Enterprise Support. He put forward the link to value for Enterprise Support and oversaw the return to a tiered support structure, both of which were vital in building bridges with customers. He also made sure that difficult internal cost decisions were taken, and that is vital in these difficult economic times.
For me some things Hasso Platner (SAP’s co founder who is to take an enhanced role again in the company) said in the conference call on the board changes were the biggest indicator that it will work: firstly admitting a mistake had been made over maintenance and secondly recognising the importance of the smaller customers.
Time will tell but we are hearing promising noises on several fronts.