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Tbr ep sapphirenow_2012
Tbr ep sapphirenow_2012
Tbr ep sapphirenow_2012
Tbr ep sapphirenow_2012
Tbr ep sapphirenow_2012
Tbr ep sapphirenow_2012
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Tbr ep sapphirenow_2012


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Technology Business Research is a different kind of research company. Our bottoms-up approach provides a look at the technology industry unlike anything you’ve seen before. We analyze company …

Technology Business Research is a different kind of research company. Our bottoms-up approach provides a look at the technology industry unlike anything you’ve seen before. We analyze company performance in professional services, networking and mobility, computing and hardware, and software on a quarterly basis, leveraging our data to create industry benchmarks and landscapes that provide a business perspective on leaders and laggards and their business plans. We are experts in the business of technology.

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  1. TBR T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C . TBR EVENT PERSPECTIVE SAP’s Corporate Reinvention is in Progress and Promises Growth SAP AG: SAPPHIRE NOW 2012 Orlando, Fla.; May 14 – 16, 2012 Author: Elizabeth Hedstrom Henlin (, Enterprise Software AnalystTBR PerspectiveThe technology-driven vision for SAP’s reinvention, outlined at SAPPHIRE NOW 2011, evolved to includetransformative products and new leadership at SAPPHIRE NOW 2012. While SAP’s reinvention vision is clear andconsistent, hurdles remain in the form of portfolio reconciliation – notably within SAP’s cloud business – and go-to-market evolution, which are necessary to support the rising complexity that comes as SAP expands its addressablemarket. TBR sees SAP’s executive team making substantial investments to improve sales execution, channelopportunity and messaging in a timely effort to increase visibility and efficiency across the organization as multipleacquisitions remain in the process of being integrated.Customer Implications: SAP is evolving into a company that is relentlessly focused on sales execution. Recentexecutive changes – particularly the exit of Robert Courteau in the face of less-effective sales results in NorthAmerica – show that executive leadership remains intent on aggressive growth. With 2015 goals approaching, TBRprojects SAP’s success will come as a result of the company’s ability to balance pressure to succeed withcustomers’ self-paced buying needs.Channel Implications: Channel attention will support that ambition – currently, SAP realizes just over 30% of itssoftware revenue via its partner ecosystem. More than 79% of SAP’s customers are small and midsize enterprises –a segment that is entirely addressed by partners. SAP Ecosystems and Channels executive leadership have clearlydefined channel territory (SME organizations at less than $500 million in revenue as well as specific “white spaces”– spanning targeted solutions, industries and geographies within large enterprise). Moreover, SAP leaders have aportfolio of on-premise and on-demand solutions ready for partners to sell. Competitors should be mindful ofSAP’s channel focus, as near-term consistent execution has the potential to expand SAP’s growth and reach.Competitor Implications: SAP continues to fuel aggressive portfolio expansion aimed at rapid solution adoption(Rapid Deployment Solutions), transformation (SAP HANA) and solving business problems. SAP is rapidly expandingits portfolio to take share from competitors including Microsoft, Infor and Epicor, with a particular focus on Oracle.
  2. TBRSAP’s five growth pillars indicate the scope of its competitive ambitions. These pillars – cloud, mobility, databaseand technology, applications and analytics – are tied to 2015 results and include a drive to expand channel sales asa revenue mix percentage and become the world’s fastest-growing database vendor. TBR maintains thatcompetitors should keep a close eye on the ecosystem driving HANA adoption, as SAP’s focus on hardwarevendors and systems integrators as critical allies in HANA market expansion promises to galvanize the product’sgrowth, delivering a sizable opportunity to all involved.Impact and OpportunitiesTaking the energy of its primary marketing campaign “Like Never Before” to heart, SAP focused SAPPHIRE NOW2012 on ensuring that attendees – customers, partners and influencers – left the event with an unequivocalunderstanding of SAP’s ability to solve customers’ business problems. Mapping to SAP’s strategic 2015 mission ofreaching one billion users, co-CEO Bill McDermott spoke about the importance of the end-user in the long-termgrowth of SAP and its customers. His commitment to that narrative was reiterated by the CEOs he appeared withon stage – all of whom looked to evolve their businesses to more readily understand and appeal to the end-customer. SAP acknowledged the importance of the end-user in its near-term growth and cloud as a critical tacticto appeal to those users by appointing SuccessFactors’ CEO Lars Dalgaard to SAP’s global managing board and asthe leader of the company’s global cloud strategy. Dalgaard’s influence was emphasized throughout SAPPHIRENOW as he shared the stage with co-CEOs Jim Hagemann Snabe and Bill McDermott in Tuesday’s keynote andduring the influencer Q&A session.A focus on end-users in tandem with new executive DNA at the forefront of a business that is evolving in real-timebrings challenges in the form of portfolio reconciliation and go-to-market complexity. In an analyst Q&A session,Dalgaard highlighted his mission for the ByDesign portfolio – which, in many ways, encapsulates the overarchingchallenges SAP faces in 2012. Dalgaard noted that there was “real demand” for the ByDesign portfolio, and thatthe portfolio had “never been positioned correctly before.” His goal is to drive ByDesign sales by first “making theproduct more beautiful” and then “by fixing the go-to-market.” SAP is embracing that mission at a corporate levelby expanding its teams in support of both mobility and HANA, as Bill McDermott noted plans to quintuple itsmobile and HANA workforce over the next few years.The Sybase portfolio and its 2011 growth at the hands of two separate but collaborative sales forces offers a hintof the potential ahead of SAP as it reconciles its cloud portfolio with the SuccessFactors suite. Dalgaard’s keynoteillustration of the degree to which SAP has implemented SuccessFactors’ cloud products and vice versa offered acompelling adoption story as proof of portfolio cohesion. However, the challenge ahead is not insignificant – asSAP embraces both suites and point products in its cloud portfolio, its sales teams will be challenged to balanceboth points of view while maintaining aggressive go-to-market advancement in support of SAP’s 2015 cloudbusiness goals. TBR believes consistent executive control of message and marketing will position SAP andSuccessFactors to drive complementary growth of all aspects of its coalescing cloud portfolio. We see Dalgaard’sstrong vision and embrace of the power of SAP’s brand throughout SAPPHIRE NOW as a critical component toensuring the coherence of SAP’s cloud go-to-market – an end-to-end value proposition that is still beingrationalized.SAP will overcome market hurdles with the help of its partners, and is investingto ensure that vision becomes realityUnderscoring the importance of its ecosystem, SAP is including an increase in revenue recognized via partners (upto 40% of total software revenue) as part of its 2015 mission. TBR believes one of the most compelling parts ofSAP’s transformation rests in its ability to engage, expand and support its ecosystem. As noted by Bill McDermott,SAP seeks to be “the platform destination for collaboration and co-innovation,” a statement that applies as muchto its ecosystem as it does to its customer base. In an analyst briefing, Ecosystems and Channels President Eric
  3. Duffaut noted that the "way to win with a platform [is to] drive a proliferation of applications. [We have] nointerest in doing that by ourselves."Duffaut’s session included a partner panel, and the takeaway from the session was evident: near-term partneropportunity centers on gaps in SAP’s market coverage. With 80% of SAP’s customers in the SME market segmentand with an expanding addressable Market (Mobile, Database & Technology, Cloud on top of Business Applicationsand Business Analytics), Duffaut’s role in core SAP strategy is clear. Co-Innovation, Expansion of Channel & Routeto Markets and Expansion of Partners Services Capacity are critical factors in SAP realizing its ambitions. TBRbelieves attention to the channel needs will be crucial in delivering SAP’s 40% revenue mix by 2015. By knowingwhen to hand off an opportunity to a new set of experts, opportunity and profit are expanded for all involved. TBRsees the executive attention at SAP to the needs and opportunities of the channel and overall Partner Ecosystemto be both high-profile (both Bill McDermott and Hasso Plattner highlighted the importance of the channel inkeynotes) and ongoing. In his keynote, Hasso Plattner remarked upon the need for “closer ties” with HANAhardware partners to remove “bottlenecks.” He also noted that the biggest HANA application opportunity centerson consumers. Judging from that insight alongside TBR’s meetings and briefings around opportunities for SAPpartners, TBR maintains that SAP’s commitment to transforming itself into an ecosystem-enabling partner willescalate in the near term, remaining tied to technology expertise.SAP is focusing investment on ensuring partners are supported in their mission to sell and support SAP products. Inthe co-CEO Q&A, executives noted the near-term opportunities for Services and Reselling partners centering onSAP’s core portfolio, while SAP focused on mobility and cloud. TBR sees this statement as signaling additionalecosystem support, as that positioning puts SAP in a place to bear the costs of innovation while openingopportunities for partners in proven, core solutions. In multiple conversations with ecosystem vendors atSAPPHIRE NOW 2012, TBR heard from partners of all sizes that they both see and are acting upon near-termopportunities to drive revenue and share gains through expanded relationships with SAP. These opportunitieslargely center on technology-focused next steps (such as Systech’s mobility-driven RDS solution or Accenture’sleading-edge work with and support of HANA) or on capability expansion (including SAP’s expanded Capgeminialliance, committed to delivering leading-edge mobility solutions over the next five years).Competitors should take note of SAP’s attention to its Partners Ecosystem. The company’s intention to remainsoftware-centric was clear during Plattner’s keynote, and IBM and Intel were among the partners highlighted asessential to delivering the HANA solution. IBM was even noted as the key enabler (through hardware) of thelargest HANA system currently in deployment (in excess of 100TB, demonstrated live during the keynote onWednesday morning). While SAP’s evolution to a more partner-centric company remains in progress, vendors aretaking notice. Continued momentum in this area will establish SAP as a software-channel partner to be reckonedwith.TBR views SAP’s ecosystem commitment as robust, particularly within the SME segment. Duffaut’s discussion ofchannel expansion across all market segments was unequivocal – the "time for one-dimensional go-to-market andleadership is over” and that SME territory belongs entirely to the channel. Moreover, SAP’s revenue mix withregards to the revenue from partners (approaching 33%) positions its 2015 goal of 40% as realistic. TBR believesongoing and active sales territory disaggregation (between direct and indirect sales) as well as focused engineeringto provide readily saleable channel solutions throughout 2012 and 2013 will prove critical in ensuring that SAPmeets its 2015 channel goals and that partners remain loyal and incented with clear opportunities to drive growth.Event Summary and AnalysisOn May 14 – 16, 2012 at the Orange County Convention Center in Orlando Fla., SAP’s SAPPHIRE NOW 2012gathered more than 75,000 onsite and online customers, partners and influencers to learn more about SAP’s visionfor long-term growth. That idea was exhibited across five campuses within, mirroring SAP’s broader growth pillars:Run Better (focused on industry and line of business solutions), Analytics, Database and Technology, Mobile and
  4. TBRCloud. SAP’s 40th anniversary was a recurring theme, and throughout the show the company positioned keynotenarratives to reflect on changes in technology as a backdrop for SAP’s executive mission and plans for growth.TBR believes SAP’s next transformational act is inextricably tied to the future of SAP HANA as well as to theevolution and integration of its cloud portfolios, as realized through the vision of SuccessFactors CEO LarsDalgaard. Chief Marketing Officer Jonathan Becher’s integrated messaging will prove critical in weaving SAP’sproducts, new markets and ambitious 2015 growth goals into an end-to-end, approachable story for customers,and SAPPHIRE NOW’s clear messaging was a successful first step.Transformation and the convergence of IT trends figured prominently at SAPPHIRE NOW, beginning with theAmericas SAP User Group (ASUG) keynote by outgoing ASUG Chairman Anthony J. Bosco, Jr. Bosco noted thattransformation lies at the heart of SAP’s brand – with ERP playing a critical role in SAP customers’ businessevolutions. Throughout the show, SAP executives focused their stories on the value customers are realizing fromSAP solutions. Customer panels were a prominent feature of SAPPHIRE NOW 2012, with co-CEO Bill McDermott’skeynote a high-profile example, and one of SAP’s most credible arguments in support of its own strategicevolution. More than 90% of theatre sessions featured SAP customer and partner stories, illustrating thatcustomers are the proof point behind SAP’s enthusiasm.At SAPPHIRE NOW 2012, multiple panels of customers told their stories,attesting to SAP’s role as a critical partner in their business transformationsSAP positions itself at the leading edge of the convergence of many trends, IT being only one of them. While SAP’smarketing message at SAPPHIRE NOW felt at times overly ambitious, positioning SAP as a company able to aid inaddressing climate change and curing cancer, the key takeaway of SAP’s ability to assist customers in transformingtheir businesses to address larger concerns was both clear and credibly supported by product features, partnersupport and customer testimonials.SAP co-CEO Bill McDermott’s keynote on Monday afternoon set the stage for SAP’s executive vision, described asutilizing innovation within its portfolio and the help of go-to-market allies in its ecosystem to assist customers insolving business problems. Joining McDermott on stage were the CEOs of Burberry and Ace Hardware, along withthe CFO of CoinStar, and each confirmed SAP’s role in delivering mission-critical solutions and acceleratingbusiness value. Technological capabilities and customer partnerships were highlighted as contributing to thebusiness growth SAP helped each company realize and execute. Burberry CEO Angela Ahrendts described how thecompany aligned and integrated what was originally a global network of disassociated units using SAP’s retailsolutions – and as stated by Burberry CTO John Douglas on Tuesday, they are now in the initial stages ofimplementing HANA. CoinStar CFO J. Scott DiValerio framed SAP as an essential partner in its reinvention of legacysystems, transforming its business to greater agility. Finally, Ace Hardware CEO Ray Griffith highlighted the roleSAP played in connecting its data to analytics functions, allowing Ace Hardware to gain new insights about itscustomers and evolve its business. The diversity of executives and companies represented in the panelunderscored the strategic messages Bill McDermott delivered as he closed his keynote – speed, simplicity andpersonalization as the end-user trends reshaping the consumption of IT and global market trends.Co-CEO Jim Hagemann Snabe led off SAPPHIRE NOW on Tuesday with a compelling keynote, rooting many of theoverarching trends previously highlighted by McDermott in the near-term capability of SAP’s portfolio to deliversolutions. Positioning SAP’s portfolio in the context of what Snabe framed as an ongoing "fundamental paradigmshift when it comes to technology," the co-CEO noted three driving principles behind SAP’s near-term mission:"everything mobile, everything cloud, everything in-memory." Snabe highlighted mobility and cloud as particularparadigm shifts SAP was embracing with its portfolio evolutions before welcoming the Executive Chairman of theMcLaren Group, Ron Dennis. Dennis discussed the benefits SAP delivers to his organization, noting that there’s"something quite different about SAP now," and highlighted the critical role SAP’s applications portfolio plays in
  5. underpinning his infrastructure from end-to-end as a major value driver from SAP to his organization. Dennis alsonoted the potential he sees for HANA to transform how the McLaren Group handles data – and in so doing, TBRbelieves he also indirectly validated SAP’s transformation vision.Jim Hagemann Snabe’s key takeaways took the consumer themes Bill McDermott outlined on Monday and marriedthem more tightly to SAP’s portfolio capabilities. Snabe noted the potential ahead of both SAP and its customers,and encouraged customers to “consolidate your core *solutions+, enable networks, and add intelligence” toinfrastructures to take best advantage of what SAP has coming by 2015 and in 2020 at the end of the currentsupport horizon.With SuccessFactors now an SAP company, Lars Dalgaard’s mission is underway:Grow SAP’s cloud reach to realize €2 billion in cloud business by 2015SAP has embraced a new beginning for its cloud business by innovating its own products and bringing in executivesand thought-leaders to reinvent and lead lagging business lines. Though Lars Dalgaard is certainly among the morehigh-profile external SAP executive hires, he is not the first. Other external hires include John Chen (with theSybase acquisition), Sanjay Poonen (in 2006 – now leading mobility strategy), as well as Sameer Patel in early 2012to spearhead SAP’s social strategy. With a team supporting cloud in excess of 5,000 personnel worldwide, SAP hasplaced its stake in the cloud market.Dalgaard has been given broad-based authority, as exemplified by his comments about having the authority toeliminate the ByDesign portfolio if he chooses. Though SAP has challenges ahead in reconciling diverse installbases, multiple sales forces and executive vision with SAP culture, the co-CEOs are united in their support of LarsDalgaard and SuccessFactors’ "fun, simple, quick" energy as the vision and vehicle to take SAP into the cloud –driving initial momentum and near-term credibility for a definitive change in strategy. Go-to-market execution willprove the deciding factor as to customers’ adoption of SAP’s new cloud vision.The second part of the Tuesday keynote featured Dalgaard in his SAPPHIRE NOW debut as SAP’s cloud leader. Hehighlighted SAP’s new cloud strategy to support “people, money, customers and suppliers.” Outlining a plan thatpromises to at least partially disaggregate SAP’s solution approach, Dalgaard noted the need for targeted pointsolutions to drive cloud growth around:  Human capital management: Integrating SAP global payroll software as a cloud offering within SuccessFactors’ Employee Central  Financial management: Pending launch of SAP’s Financials OnDemand solution with planned Employee Central integration, along with expanded mobile capabilities in SAP’s Travel OnDemand solution  Sales management: Expanded solution functionality in SAP’s Sales OnDemand solution as well as the general availability of SAP’s Social Customer Engagement OnDemand solution  Supplier management: Adding additional on-premise integrations and functionality to SAP’s Sourcing OnDemand solution, which will also be impacted by SAP’s pending acquisition of AribaDalgaard’s mission to drive growth was further highlighted by the announcement of the SAP NetWeaver Cloud(NEO) Platform as a Service (PaaS) offering and SAP’s commitment to expanded partnerships with VMware and itsCloud Foundry PaaS platform, Dell Boomi and its integration technologies and others. Finally, Dalgaard reaffirmedSAP’s ongoing support of and investment in Business ByDesign and BusinessOne – cloud-delivered business suitesremaining on SAP’s agenda, even in the face of point-product expansion. The products announced have clear valuepropositions and deliver real business benefits, but promise to rapidly scale the portfolio, which could complicatego-to-market plans in the near-term.The co-CEO Q&A session that followed the keynote, as well as an analyst session later that day, focused on SAP’scloud ambitions. Jim Hagemann Snabe noted that SAP was "going to commit to cloud like never before." Taken intandem with Snabe’s comments that it is a “fundamental mistake” to take applications designed for on-premise
  6. TBRand put them in the cloud, TBR sees an endorsement of the implied mandate given to Lars Dalgaard to reinventSAP’s cloud business. Business ByDesign was highlighted repeatedly as an ongoing growth opportunity.Dalgaard publicly reiterated his endorsement of the strength of the SAP brand and cloud-delivered products, butwas very emphatic about lost opportunities and his interest in changing that trajectory. In a clear signal of thesupport he delivers to SAP executives, approaching the market from a consumer-centric, cloud point of view,Dalgaard noted that “delivery methods don’t matter, user experience does.” TBR believes, however, that thedisconnect between a co-CEO expressing concern about on-premise applications going to the cloud and the cloudbusiness leader endorsing the parent company’s on-premise-to-cloud portfolio signals an ongoing negotiationbehind the scenes. We project that the full picture of determined portfolio placement, messaging, and long-termgrowth as one unit, rather than two distinct companies, is still coming into focus.Expectations for SAP’s High Performance Analytic Appliance (HANA) are basedon performance, even as HANA becomes “the foundation” for SAP applicationsProf. Dr. H.C. Hasso Plattner (SAP Founder and SAP Supervisory Board Chairman) and Dr. Vishal Sikka (SAP’s Headof Technology & Innovation and Member of SAP’s Executive Board) closed out the executive keynotes, focusing ontechnology experience, expertise, and innovation. TBR views SAP’s executive balance as critical to its execution;the diverse personalities create an end-to-end vision that the company has bought into and is following withenthusiasm. Wednesday morning’s keynote, delivered jointly by Plattner and Sikka, centered on the ongoingdevelopment of HANA and featured live demos to underscore the solution’s readiness and reliability. In anextension of their keynote from SAPPHIRE NOW 2011, which focused on the business-transforming vision of HANA,Plattner focused much of his discussion on HANA’s ability to actualize that vision. Insights previewed by JimHagemann Snabe the day before, including “put your business warehouse” on HANA, were demonstrated live onstage, including BusinessOne deployed on top of HANA as well as real-time offer incentives to online gamingaudiences. The largest HANA deployment to date – a 100 TB HANA machine running on IBM hardware – was alsodemonstrated via video feed, including proof of high availability configurations. Sikka also led the audiencethrough the generally available capabilities of Business Warehouses deployed atop HANA.While statements at SAPPHIRE NOW about HANA’s value and performance reflected SAP executives’ enthusiasmand the marquee nature of the keynote stage, the HANA demos along with SAP partner conversations TBR hadonsite illustrated that HANA does in fact have leading-edge performance in core use cases, with OLAP and OLTP asprime examples. One conversation TBR had with a HANA reselling partner outlined HANA “bake-offs” andoverviewed where the partner was able to win competitively with HANA, based on performance, in the marketwhen compared to leading competitors.Plattner’s keynote called out an interesting comparison, noting that there was “more” in the HANA solution’s toolsthan the core kernel system itself, stemming from assets within SAP that were either developed or acquired(highlighting Sybase and Syclo as being of particular value in application development). TBR sees that insight aspromising for SAP’s growth, when considering HANA’s long-term interoperability within SAP’s broader portfolio.During the keynote, IBM, Accenture and Deloitte were among highlighted partners that had developed and wereactively deploying applications powered by HANA. Plattner’s key takeaway focused on the development of HANA,both now and in the long term. With half of current projects on HANA dealing with non-SAP data, per Plattner, TBRsees an implied commitment to keep the architecture open for development. He encouraged the audience toreach out to him and Sikka via email, and committed to fulfill “all of your requirements regarding high availability”in the next three months. He also promised HANA will become “the premier cloud database” and thatSuccessFactors’ portfolio would run atop HANA.Sikka received an enthusiastic audience response when he announced that developer licenses for the SAPNetWeaver Cloud (NEO – announced by Lars Dalgaard a day earlier) and HANA would be available as “free, click-
  7. through licenses,” positioning SAP to capture mind-share in a passionate evangelist base of application developers.The developer support theme highlighted by Plattner and Sikka showed up throughout the show, perhaps mostclearly in Lars Dalgaard’s endorsement of open-source technologies during the co-CEO Q&A.TBR’s meetings at SAPPHIRE NOW indicate SAP is successfully implementing ways in which to engage applicationdevelopers – key purchase influencers in customer organizations. The company is accelerating applicationdevelopment through the SAP Partner Center – which was launched with mobile applications at SAPPHIRE NOW.The launch of SAP’s enterprise app store – demonstrated for TBR at the show – showed a compelling user interfaceusing the common capabilities of consumer application stores in conjunction with enterprise-ready featuresincluding online compatibility checks, corporate discounts and application certification for enterprise-grade usage.SAP is incenting partners to build applications with these new points of access to the SAP install base whilemonetizing its own investments in partner application development, as engaging with the SAP Store carries arequirement to sell the end-developed result.Technology Business Research, Inc. is a leading independent technology market research and consulting firmspecializing in the business and financial analyses of hardware, software, networking equipment, wireless, portaland professional services vendors. Serving a global clientele, TBR provides timely and accurate market research andbusiness intelligence in a format that is uniquely tailored to clients’ needs. TBR analysts are available to furtheraddress client-specific issues or information needs on an inquiry or proprietary consulting basis.TBR has been empowering corporate decision makers since 1996. For more information please visit©2012 Technology Business Research Inc. This report is based on information made available to the public by the vendor and other publicsources. No representation is made that this information is accurate or complete. Technology Business Research will not be held liable orresponsible for any decisions that are made based on this information. The information contained in this report and all other TBR products is notand should not be construed to be investment advice. TBR does not make any recommendations or provide any advice regarding the value,purchase, sale or retention of securities. This report is copyright-protected and supplied for the sole use of the recipient. Contact TechnologyBusiness Research, Inc. for permission to reproduce.