The SAPphire Sensation

As just about everyone in the enterprise space knows, SAP‘s big annual conference, SAPPHIRE, was last week, and, especially since SAP took the progressive stance of again reaching out and inviting bloggers to cover the conference, it received quite a bit of press. Since I was not among the fortunate few invited to Atlanta to cover the conference, I’ve been keeping up with the postings of the bloggers who were in attendance to try and figure out what what SAP has been up to.

A number of leading bloggers, including Jason Busch of Spend Matters, Dennis Howlett of AccMan, Jerry Bowles of Enterprise Web 2.0, Craig Cmehil of Craig’s Rantings, Michael Cote of People Over Process, Dan Farber of Between the Lines, Thomas Otter of Vendorprisey, and Robin Fray Carey of Social Media Today were in attendance and together posted a considerable amount of coverage and insight (which can be augmented by a few thought pieces from AMR as well).

From these posts (which are direct-linked at the bottom of this post), one learns the following about SAP:

  • SAP has their work cut out for them if they ever want to reach a thought leadership position in the sourcing and procurement space.
  • SAP recognizes that their solution is quite expensive compared to other best-of-breed solutions and that users today want to try before they buy (even though what they have is not yet competitive with some of the other best-of-breed players).
  • SAP has recognized the need for proper spend analytics.
  • SAP’s Master Data Management Solution is not ready for prime-time.
  • SAP’s Duet offering (being jointly developed with Microsoft) is not ready for prime-time either (despite its sale to 250 customers), but 1.5, intended to have better integration between Microsoft Office and SAP business processes, is slated for later this year. However, it may be version 2.0 (slated for release in late 2008) before it lives up to initial expectations.
  • SAP is starting to understand the importance of community in sourcing, procurement, and the supply chain as a whole (and that SDN and BPK will be key to their innovation strategy), and is working on a social computing application called Harmony, currently under a controlled test, as well as doing a lot more development with partners.
  • SAP is still solid on Netweaver as the center of its platform
  • A1S, the upcoming on-demand mid-market platform built on a SOA architecture and pegged for a 2008 release, remains a mystery and source of confusion.
  • No more MySAP, it’s now SAP ERP 6.0.
  • SAP wants 100,000 customers by 2010 (as compared to the 39,000 it has today).
  • SAP will embed the Adobe Acrobat Connect Professional Web conference system in its workforce development product.

The following news is quite interesting:

  • SAP is now offering a 90-day E-Sourcing trial consisting of 3 pre-configured events for only $10,000 that comes with (limited) training and support
  • Their forthcoming spend analytics xAPP solution should have a much better UI than old-school SAP products
  • Most customers only use 30% of SAP functionality

The E-Sourcing offering is likely to get them a lot of traction, but is it likely to win them a lot of business. I expect that many customers who do not have an E-Sourcing solution at present will try it, say “that’s great”, but then start looking elsewhere when they get the quote, since I believe Iasta and Procuri will offer considerably more on-demand functionality at a considerably smaller price-tag for some time to come. As Jason Busch said, once users sip the Kool-Aid, they’ll want to buy their own refrigerator, blender, mixers, and booze to tailor it just to their liking and although some may have the budget to afford SAPs full offering, I’m betting many won’t.

The xAPP solution is interesting since it sounds like it will compete fairly well with solutions offered by Emptoris, Ketera, Procuri, and Zycus and since it sounds like they have integrated Macromedia UI capabilities, and maybe even Flex, into the application.

The 30% statistic, although something I more-or-less knew as a technology expert, is interesting nonetheless as it comes straight from the source and hammers on the need to carefully evaluate what you are buying, whether you truly need it, and how many seats you really need if you do before you sign the contract. Otherwise, you might end up paying millions more than you need to. And although every large corporation needs a solid ERP system for their master data store, it forces you to think about whether you will get solid value for the price, especially since there are much more affordable enterprise open-source alternatives, such as Compiere, out there. For some companies, a properly configured SAP instance with the appropriate number of licenses will be worth (much more than) the cost, but for others, it may not be.

I’d like to leave you with a paragraph from Brian Sommers, whose long blog entry of yesterday drives the point home.

The users that should be showcased at these events are the ones who spent a pittance and got a ton of value. Morever, the focus should be on highlighting the customers who were able to figure out a lot of the change management challenges on their own and actually solved them without the use of consultants or a strait-jacketing piece of technology.

The Links:

Spend Matters or
Enterprise Irregulars by Jason Busch
  SAP: 3 Sourcing Events for $10K?
  SAP Gets Serious about Spend Analytics
  SAP SRM Users: Don’t Feel Compelled to Upgrade to MDM
  Waiting for Duet
  SAP’s E-Sourcing Transformation: Part 1 — Setting the Stage
  SAP’s E-Sourcing Transformation: Part 2 — The Services Ecosystem
  SAP’s E-Sourcing Transformation: Part 3 — Just the Product Facts
  Procurement Goes Main Stage at Sapphire
  Making the Sapphire Procurement Scenario Real
  SAP needs to Realize that Procurement Extends Beyond the Four Walls

AccMan by Dennis Howlett
  SAPPHIRE 07 – Day 1, the wrap
  Hasso Plattner’s blackboard
  On not seeing A1S
  Will You Trust SAP With Your Business?
  Harmonising inside SAP
  SAPs A1S go to market strategy – the addressable market
  SAPs A1S go to market strategy – potential hurdles
  AMR sees A1S, confusion reigns
  Flashing Open the A1S Kimono

Craig’s Rantings by Craig Cmehil
  Oracle invades SAP SAPPHIRE
  SDN and SAPedias
   Emerging Solutions brings “Harmony” to the Enterprise

People Over Process by Michael Cote
  Sapphire 07: Support, Enterprise 2.0
  Sapphire 07: Stable Agility, Web 2.0 Everywhere

Between the Lines by Dan Farber
  SAP Sapphire gets underway
  SAP internalizes social networking for business
  MySAP fades into history
  SAP aims A1S on demand solution for 2008
  Hasso Plattner outlines SAP’s software vision
  SAP and Microsoft lay out Duet roadmap
  SAP gets on the Enterprise 2.0 bandwagon
  SAP CEO: We are not arrogant, we are the market leader

Social Media Today by Robin Fray Carey
  Meanwhile, at Virtual SAPPHIRE
  Dennis Moore at SAPPHIRE: “No More Waterfalls”
  Hasso Plattner: “Virtual is Real”

Vendorprisey by Thomas Otter
  Live blogging Leo’s keynote
  The name game. My My.
  The future of HR systems and thinking?
  Henning’s Kagermann’s Keynote
  Rio Tinto, SAP, talent management and Youtube
  Talking GRC and the office of the CFO gang at Sapphire
  Dinner with SAP customers and an old friend
  Co-innovation is a strength not a weakness

Enterprise Web 2.0 or
Enterprise Irregulars by Jerry Bowles
  SAP Shows the Love for Bloggers
  SAP to Enterprise 2.0 Community: We Get It

Services Safari or
Enterprise Irregulars by Brian Sommer
  Getting to know the SAP Customer

SAPPHIRE 2007: Usability and Flexibility Take Center Stage by AMR Research Staff
SAPPHIRE: SAP Widens Its Embrace to the Extended Value Chain by Stephen Hochman, Mark Hillman of AMR
SAPPHIRE 2007: SAP Lets the A1S “Secret” Out of the Bag by Simon Jacobson, Jim Shepherd
SAP is Starting to Take a Leadership Role with SRM by Mickey North Rizza, Jane Barrett

Sapphire 2007: An SAP SRM Gem? by Aberdeen

P.S. David Bush of eSourcing Forum offered his opinion of Spend Matters’ ERP week yesterday.

P.P.S. I also hear Jason Wood of Ponderings of Woodrow and Mike Masnick of TechDirt were present for at least part of the conference, so you might want to check their blogs in the coming days as well to see if they posted their thoughts.