SAP's long history of naming and re-naming its myriad software applications has not only left customers and market observers confused, it’s taking money that could be better spent elsewhere, according to a new Gartner report.
In the report, titled SAP’s Shifting Product Names Can Mean Disruption without Innovation, analyst Thomas Otter calls SAP onto the carpet for frequently and unnecessarily changing the names of its products – even when the products haven’t changed. As a result, customers have a hard time telling the difference between the products they already have and what’s new, and that makes it hard for them to plan strategically.
“SAP has a well-earned reputation for complexity and inconsistency in product naming,” the report states. And it’s not just customers and consultants who are left dazed and confused, it says. SAP’s own employees and executives can’t always keep the names straight either.
The problem, the report says, has grown worse as SAP has acquired more companies and increased in size.
According to the report, SAP has renamed more than 200 products during the past two or three years. And given that SAP stands poised to purchase more companies in the future, the practice probably isn’t going to get much better.
The report cites several examples of product name changes that could have been handled better. In one line alone, Xcelsius Enterprise was renamed to SAP BusinessObjects Dashboard Design, and Xcelsius Engage became SAP Crystal Dashboard Design, personal edition.
Other products have gone through several changes during their life spans. SAP HR went through four name changes before becoming SAP ERP HCM, its current name.
In other cases, products skip version numbers and don’t always reflect any change in the application itself. Solution Manager 4.0, for example, was renamed Solution Manager 7.0 in 2008 in order to be aligned with the current version number for NetWeaver, even though the application itself didn’t change.
When reached for comment, SAP provided a document that says product names are chosen in a way that communicates their features and benefits. But the statement did not specifically address the report’s assertions that these names change frequently, inconsistently and without reason.
The same document stresses that the Release Strategy Brochure SAP gives to customers, salespeople, consultants and others gives them everything they need to keep their inventory straight. It includes a comprehensive look at SAP’s product portfolio, including relevant information on past names for products, as well as plans for future releases. The brochure, which is updated every year, is also posted on the company’s website in the SAP Support Portal.
Otter stressed in a phone interview that SAP is hardly alone in erratic naming conventions. After all, he said, it’s not as if other “mega-vendors” like Microsoft always use the same naming style throughout the lifecycle of a product. At the same time, he added, Microsoft never completely renames its products.
Otter said he believes the confusion is largely marketing driven but that it’s taken precedence over other concerns. One downside, he said, is that actual improvements to an application may get lost in the confusion over version names and numbers.
“Renaming a product for marketing purposes is not the way to go,” Otter said in the interview. “The costs outweigh the benefits of the new name.”
Those costs can range from the time and effort SAP spends to update all of its marketing and supporting collateral, to customers unnecessarily purchasing software they may not need or already have.
“It’s real money,” said Ray Wang, founding partner and analyst for Altimeter Group, referring to the amount of money customers can end up wasting on unused or unneeded licenses, which he said can easily add up to hundreds of thousands of dollars.
Wang attributed the problem to the different CEOs and other executives that have rotated through SAP over the years, each with different strategic visions. Then there’s the sheer number of applications SAP produces.
“SAP has so many products,” he added. “This is why it’s more confusing.”
To help manage and keep version numbers and names straight, the report makes the following recommendations:
• SAP customers should create their own SAP product “dictionary” as a part of their overall product inventory. Products should also be categorized as to “new,” “renovated” or “renamed.” The report encourages customers to use SAP’s Release Strategy Brochure PDF to help create that inventory.
• Make sure that technical teams, key executives and procurement teams all have the same information. The IT team may be aware of the changes, but those handling contracts may not. Organizations could end up buying something they already own unless everyone’s on the same page.
• Collaborate with other SAP users when maintaining the product dictionary.