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Keys for SAP customers on SAP's product strategy going forward

AMR Research's Jim Shepherd talks about what SAP customers need to know about SAP's product strategy and product roadmap in this podcast.



As Leo Apotheker takes over as sole CEO, some changes are afoot at SAP. At Sapphire this year, there was little mention of NetWeaver or service-oriented architecture (SOA) -- the "business network transformation" message that led the company for the last few years. Instead, it introduced something called the "clear enterprise," which centers less on selling strictly transactional applications and more on analytical ones.

What does this mean for SAP customers?

In this podcast, Jim Shepherd talks about what customers should know about SAP's product strategy going forward. He discusses what products and technologies will be important to the SAP product roadmap, the vendor's strategy for the cloud and whether it's worth paying attention to the new line of sustainability products.

Shepherd is senior vice president of research at Boston-based AMR Research. He has more than 30 years of manufacturing, operations and software industry experience.


  What should customers know about SAP's product strategy?  
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  Program highlights  


  • 0.53: What does 'clear enterprise' mean for customers?

  • 2:16: What products and technologies will be important to the SAP product roadmap?

  • 4:30: Should customers be paying attention to SAP's line of sustainability products?

  • 5:24: What's SAP's strategy for on-demand and the cloud?

  • 7:16: Will customers see changes with Leo Apotheker taking over as sole CEO?

  • 8:25: Will customers see more emphasis on software sales and less on software development?

  • 9:20: SAP vs. Oracle: Whose strategy is better?

      Read a full transcript of's interview with Shepherd What does clear enterprise mean for customers?

    Shepherd: Clear enterprise is the current marketing theme. It replaces "business network transformation," which was the marketing theme for the last several years.

    I think what it tries to convey for SAP is a focus that's different somewhat -- away from the transactional applications that SAP is famous for and more around some of the strategic planning and performance management applications that were a part of the BusinessObjects acquisition and others. There's much more emphasis around the importance of visibility in analytics.

    And, of course, it also brings up sustainability, which was a major theme. It is a new product area and new initiative for SAP, one we'll be hearing a lot about. Which products and technologies will be important to the SAP product roadmap?

    Shepherd: The star of the show from a product perspective had to be the SAP BusinessObjects Explorer. This is the marriage of the BusinessObjects Polestar product that gave customers an intuitive way to navigate through and understand large amounts of data, combined with SAP's very powerful TREX in-memory database.

    Sustainability is going to be a whole new suite of products … [with a] major emphasis on carbon footprint…. SAP is presenting it as a moral imperative, but they are trying to emphasize not so much the do-gooder aspect of sustainability as the economic benefit.... This is going to be a major area of investment for SAP. Should customers be paying attention to SAP's line of sustainability products?

    Shepherd: Well I think, yes. Certainly customers should look at sustainability because there's an opportunity to save a great deal of money. Customers should look at it because it makes good business sense and in many cases can enhance the value of the brand.… SAP is absolutely correct in saying sustainability is good business, and there has not been much support from an applications perspective for sustainability initiatives. What's SAP's strategy for on-demand and the cloud?

    Shepherd: SAP will be neutral with regard to the cloud. It is another infrastructure technology, and they tend to try to be agnostic about those. They're investing in making sure their products run effectively in either private clouds or public clouds.

    But their significant investments are around Software as a Service (SaaS) or on-demand. They have a couple more [products] that are in the pipeline that will be on-demand based. Part of the sustainability initiative is focused on carbon management, and [they're working on] a whole series of products in the business intelligence space, and then a couple more that are in the works … some of the HRM products and expense management. And then, of course, there's Business ByDesign … and we expect to see that go to volume release next year. Will customers see changes with Leo Apotheker taking over as sole CEO?

    Shepherd: Yes. I think we've been seeing changes. There's been a pretty substantial turnover in the executive board. There was a time ... a long period of time ... when all of the board members were multi-degreed German engineers with very strong software development backgrounds. That's less true today.

    There's more age diversity, there's more diversity in background. [CEO] Leo Apotheker, his background is really field operations and sales. [Development head] Jim Hagemann Snabe comes from a field background, [COO] Erwin Gunst comes from a field background, [global field operations head] Bill McDermott is a pure sales guy. Will customers see more emphasis on software sales and less on software development?

    Shepherd: Not so much on the sales force. I think a more … customer-focused emphasis than we might have seen in the past and perhaps more balance between engineering and the field organization. This is still very much a German engineering organization. I think one of the things Leo brings to it, and having Bill McDermott on the board as well -- at some level, SAP may become a bit more global and a bit less Germanic. SAP vs. Oracle: Whose strategy is better?

    Shepherd: They're very different companies, even though on one side of Oracle's business they compete directly. SAP is still very much focused on business applications. Oracle has a much broader focus [that] you can think of as the whole technology stack. Now that they're in the hardware business with the acquisition of Sun, applications for Oracle are just one piece of the puzzle.

    They have very different go-to-market [strategies]. SAP is very much about selling broad business solutions. They sell very high in the organization, generally at the senior management level. Oracle tends to sell much more transactionally. They sell deep in the IT organization. They tend to sell smaller transactions from a very large portfolio of products. SAP's portfolio is much smaller.

    SAP is all about business process; Oracle is all about information. SAP is heavily focused on small and medium enterprises; Oracle is much more focused on large enterprises.

    I think [that] in the application business, SAP is still the absolute, dominant market leader. Their application business is roughly twice the size of Oracle's. They've done a better job with vertical industries. They have a more complete solution. Their message around a single-vendor integrated solution, I think, is more compelling than Oracle's is.

    On the other hand, Oracle has many more ways to monetize its customer base.

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