I’ve said for years that criticism aside, it’s a bad idea to bet against SAP. That is (probably) more true in 2020 than in the past. Here’s why.
Bet against SAP- This is a long read so grab a beverage, sit back and get stuck in.
I’m going to start with a quote from Michael Doane in The Green Book, published in 2012:
In recent years, analysts and SAP competition have tried to give the impression that SAP is ‘so yesterday,’ as Software as a Service (SaaS), the cloud, and SOA are seen as the pivot points to the future…I cannot imagine a firm with 5,000 or more active users putting their data out to a cloud. I cannot imagine a firm with 5,000 or more users accepting that they have no way to change their applications software functions.
Nor can I imagine a firm that is already using SAP – and beyond implementation costs, has already invested million upon millions of dollars in deployment – to simply shrug and move to something else. In fact I haven’t seen it happen in many years around SAP.
Hold that thought. Now juxtapose this from Ben Thompson of Stratechery in a recent weekly email:
Integrated solutions will just about always be superior when it comes to the user experience: if you make the whole thing, you can ensure everything works well together, avoiding the inevitable rough spots and lack of optimization that comes with standards and interconnects. The key, though, is that this integration and experience be valued by the user. That is why — and this was the crux of my criticism of Christensen’s development of the theory — the user experience angle only matters when the buyer of a product is also the user. Users care about the user experience (surprise), but an isolated buyer — as is the case for most business-to-business products, and all of Christensen’s examples — does not.
Hold that thought too. We’ll repeatedly get back to those topics.
Almost since the first day that Christian Klein became SAP’s co-CEO I’ve been asked the same question or a variant thereof: “How will SAP thrive in the future?” As in the past, competitors and some analysts would like to think that SAP’s golden days are behind it. Others, and especially those whose livelihoods depend on commenting positively around SAP, take the opposite view. I’ve wavered from one extreme to another but in recent days I’ve come to the conclusion that the future is SAP’s to lose. Here’s why.
Doane was largely correct. If you look at the number of S/4HANA cloud implementations, they’re a small rounding error on the SAP balance sheet. Not even equivalent to the total of the petty cash count at BP. Does that matter?