Unveiling of Salesforce challenger C/4HANA and lingering indirect licensing issue give mixed message about SAP's willingness to integrate with popular products from competitors.
The 2018 edition of the SAP Sapphire conference saw the ERP heavyweight set off in a new direction by introducing C/4HANA, a CRM platform likely to compete with market leader Salesforce. New SAP Leonardo-branded AI development tools also shared the spotlight at the Sapphire conference as SAP continued its multiyear quest to position its ERP platform as a digital transformation vehicle, most of it powered by cloud computing.
TechTarget editors shared their observations and takeaways on the developments in a podcast recorded at the Sapphire conference in Orlando, Fla.
The newly announced C/4HANA is "fundamentally a complement to S/4HANA -- the branding's obviously quite important for them pulling together a lot of their customer experience technologies," including Hybris e-commerce software, said Brian McKenna, business applications editor at Computer Weekly. "It does seem like they've made a very definite, board-level decision to really go for CRM. [SAP CEO Bill] McDermott, for as long as I can remember now, has been saying Salesforce is just about sales automation. They have to find a new generation of CRM." McKenna added that SAP seems to be serious about joining front-office functions, like CRM, to the back office and ERP.
McKenna speculated that SAP's introduction of C/4HANA might be partly motivated by the indirect licensing controversy, in which SAP won a U.K. court case against a customer that had accessed SAP ERP data through Salesforce CRM.
SearchSAP News Editor Jim O'Donnell shared feedback on the digital transformation experiences of SAP users he spoke to at the Sapphire conference. He said IMAX, which makes film projection systems, implemented on-premises SAP ERP Central Component (ECC) to tie together separate ERP systems and business processes.
"It was like going from spreadsheets and sticky notes, even, to automated processes. You think of ECC as kind of old news, but that's where a lot of people still are in the SAP world," O'Donnell said. "They're still just being caught up to taking processes that were based in paper and automating them. And that's digital transformation."
O'Donnell said IMAX is bullish on its SAP experience and is considering moving to the next-generation ERP system, S/4HANA, but is not likely to consider the C/4HANA CRM product anytime soon.
SAP also used the Sapphire conference to unveil new AI development tools, including a "conversational AI" chatbot platform that works across SAP and non-SAP systems, and the embedding of Leonardo machine learning capabilities across the SAP product line.
Integration questions at Sapphire conference
But C/4HANA and other products introduced at the Sapphire conference raised questions about SAP's integration strategy for its own technology and that of third-party vendors.
Hasso Plattner, chair of the SAP supervisory board, admitted in his keynote that integration isn't perfect, even between SAP products, said SearchSAP contributor Christine Parizo. She noted the integration problem crops up in the indirect licensing issue because third-party tools need to work with SAP data, but the guidelines for doing so "raise a lot of questions in terms of how the data is used [and] who owns the data."
The editors noted the irony of Plattner's characterizing SAP as the "kings of integration" in his Sapphire conference keynote, while the vendor sends mixed messages about integrating with third-party software, such as Salesforce.
"Releasing a CRM product of their own is basically saying, 'We want you to use our CRM product,'" Parizo said. "Having SAP's cloud platform with that big hub-and-spoke model is saying, 'We want you on our platform.' But then admitting [their] integration isn't perfect. I think that's going to generate a little bit more confusion than it should."
Other topics discussed include the adoption rate of S/4HANA Cloud and the soundness of the argument for choosing the on-premises version of S/4HANA.