The not-so-surprising allure of SAP

It's funny how much Silicon Valley so unabashedly loves a winner. While SAP was never a pariah, it wasn't exactly known as the company everyone wanted to sign on to. The SAP of old engendered its share of fear and loathing, and accusations of Germanic rigidity and tight-fistedness, not to mention being thought of as boring and a little too far from the leading edge.

Now SAP is the company everyone wants to be part of. SAP's recent announcement that a veritable gaggle of seasoned software executives has come to roost at SAP only confirms what has become increasingly obvious in the last few months.

Part of the reason so many industry execs want to end up at SAP is that so many of them are aching for the chance to play on a winning team. Behind the resumes of many of the new faces at SAP is a roller-coaster ride of misfortune and hard-times that characterized most of the software sector for the last four years. Despite their individual talents, many of SAP's new hires have been on the losing side of the software wars for the last few years.

The other reason is that SAP's culture has changed dramatically since the ascendancy of Shai Agassi and the in-gathering of talent to SAP's bustling Palo Alto office. SAP always had Silicon Valley-class talent, but it never had a place where that talent could truly feel at home. But sit in SAP's Palo Alto cafeteria today as you would anywhere in Silicon Valley – the only difference is that they serve good German rye bread in

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addition to the croissants and whole wheat.

This shift of talent and culture cannot be underestimated. For better or worse, success in Silicon Valley requires an insider's game, one that companies like Oracle have known how to play for years. SAP has always been successful, but its NetWeaver and service architecture strategy require a genuinely unprecedented degree of success that is dependent on being an insider in a software industry that has traditionally viewed SAP as its most successful outsider. No more: like the "Japanese" cars made at the NUMMI plant in nearby Fremont, SAP is becoming as local a player as any of its dyed-in-the-wool competitors. The name may still hearken back to its German roots, but more and more the strategy and execution say "Made in Silicon Valley."

This was first published in August 2005

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