Posts Tagged ‘SAP’

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News Analysis: SAP Buys SuccessFactors for $3.4B Signals SAP’s Commitment To Cloud, HCM, and Social

Published on December 3, 2011 by R "Ray" Wang

SuccessFactors Acquisition Puts SAP In Direct Competition With Workday And Taleo

SAP (NYSE:SAP) announced its $3.4B acquisition of SuccessFactors (NYSE: SFSF) as it seeks to bolster its position in the Cloud and more importantly in the rapidly growing strategic HCM market.  Based in San Mateo, CA, USA, SuccessFactors brings over 15 million subscription users from 3,500 customers in 168 countries.  The company has 1450 employees and has been one of the SaaS/Cloud darlings of the industry.  When completed, SuccessFactors will remain an independent entity renamed, SuccessFactors, an SAP company.  Lars Dalgaard, Founder and CEO, SuccessFactors will lead the cloud business for SAP.  A quick analysis of the news reveals:

  • SAP seeking a comprehensive and complementary HCM solution. SAP believes the combination of SuccessFactors and SAP will create a comprehensive HCM solution, marrying strength in enterprise applications with people-focused cloud applications. Today, SAP serves the market with a comprehensive and international Core HR and payroll.  Other on-premise offerings include talent management, workforce analytics, and shared services delivery. Key offerings from SuccessFactors include areas such as talent management, recruiting management, goal management, performance reviews, and business execution.  Further, SAP believes the core SFSF offerings will be an attractive to more than 500 million employees of SAP customers .  SAP has 15,000 HCM deployments (not customers) that could benefit from one-stop shopping.

    Point of View (POV):     While the core offerings provided a solid approach, these applications remained in the systems of transaction world and lacked many of the newer requirements for systems of engagement.  In fact, many customers left SAP to go to SuccessFactors to accelerate innovation in the talent space. The rise of Taleo, Workday, and Ultimate Software comes from the lack of general innovation in the HCM space by legacy vendors such as Oracle, PeopleSoft, and SAP.  Cloud computing provided the opportunity to deliver rapid innovation to customers.  Consequently, existing customers will welcome the move while best of breed purists will have to overcome the surprise and determine how innovative they expect SAP to become in HCM.
  • SuccessFactors’ provides SAP with massive cross-sell opportunities. SAP believes the core SFSF offerings will be an attractive to more than 500 million employees of SAP customers .  SAP has 15,000 HCM deployments (not customers) that could potentially go for one-stop shopping from SAP.

    Point of View (POV):     SAP sees the acquisition as a great cross-sell opportunity for other cloud apps and analytics.  Other opportunities include CRM, Collaboration, Travel, and Procurement in the cloud.  In the past two years, Success Factors has made the shift to focus on business performance execution and provides a real time decision making platform.  While customers can acquire a solution from one vendor, the integration of the various cloud platforms may prove to be a challenge.  However, from a financial play, Co-CEO, Bill McDermott sees this as an easy way to meet his 2015 target of €20billion and move towards the 35% margin he seeks to bring shareholders.

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Monday’s Musings: A Working Vendor Landscape For Social Business

Published on August 15, 2011 by R "Ray" Wang

Confusion Persists In The Social Business Market

As with any new disruptive technology, the social business solution landscape faces a dynamic, confusing, and converging market. As vendors seek to grab mind share and market share, customers and prospects remain confused as to what are the right business problems to address with social business. However, rampant confusion among users hampers efforts to solve business issues. Three key factors accelerate this level of confusion:

  1. Early adopter market. Constantly changing conditions force customers to alter original plans as executive sponsorship fluctuates from intense to pensive and back to intense in short cycles. Projects remain secretive for competitive advantage reasons. Consequently, prospects lack strong case studies to build off of despite peer groups, adoption networks. Prospects seek metrics that matter and relevant use cases.
  2. Consumerization of IT. With increased social media penetration, success in consumer grade products highlight the potential for enterprise adoption. However, most enterprise class products remain one to two generations behind in achieving similar capabilities. As business users gravitate towards simple, scalable, and sexy attributes; IT departments seek to rein in shadow IT efforts with safety, security, and sustainability requirements.
  3. Marketing mayhem. Fast paced markets always generate hype in marketing messages. Hence, legacy collaboration, community platform, CRM, unified communications, integration platform, and office productivity vendors seek to reposition themselves and address the emerging and trendy social business use cases customers seek.

Social Business Vendors Converge Towards Business Value Sweet Spot

The vendor landscape for social business market represents a diverse and broad collection of solutions.  Vendors approach the market from multiple heritage points, technologies, and markets.  Four key criteria cut across two axes (see Figure 1):

  1. External facing vs internal facing.  External facing includes customers, partners, and suppliers.  Internal facing include employees and trusted networks within the corporate firewall.
  2. Platforms and infrastructure vs purpose built solutions.  Platforms and infrastructure referred to core technology solutions.  Purpose built solutions address specific applications.

Figure 1. Social Business Vendors Converge Towards Business Value Sweet Spot (Working Draft)

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Event Report: SAUG Summit 2011 Attendees Show A Shift From SAP Centricity To Purpose Built

Published on August 3, 2011 by R "Ray" Wang

Summit Brings A Cadre Of Thought Leaders To User Group Attendees


The SAP Australian User’s Group held their annual summit once again at the Sydney Convention Centre in Darling Harbour from August 2nd to August 4th.  With around 600 attendees, the keynotes covered many of the hot topics about SAP ownership, road maps, and best practices. Some highlights include:

  • Christian Thompson, Director of Information Services at CITIC Pacific Mining discussed their experiences with growth and to go cloud or not.
  • Jeff Word, Vice President of Product Strategy at SAP shared the latest SAP Technology strategy in his keynote and delivered a standing room only, four hour deep dive, on HANA that was a must attend event.
  • John Kelvie, IS Director at Fonterra outlined how their company replaced legacy systems with SAP for a future SAP road map. John provided detailed examples of what worked and what didn’t.
  • Bridgette Chambers, CEO of the America’s SAP User Group (ASUG) introduced the concept of Infinite ROI. She expressed how to take advantage of timeless software.
  • Malcolm Humphries, BI Solutions Architect at Fonterra; and Keith Murray, Global Product Manager for SAP In-memory computing at IBM shared real-world experiences of how BWA can be deployed and the realities of the SAP’s new HANA in-memory product. This session blew away most marketing fluff presentations at Sapphire 2011 this year.

In addition, breakout sessions focused on industries, solutions, business/analytics, and IT organization/Technology, and BOBJ.  Of particular interest was the excellent session put on by Peter Dee, Head of Upgrade Centre, SAP Asia Pacific Japan. He provided some pragmatic approaches to managing cost effective upgrades.

Meanwhile, the mobile sessions, BI sessions, and solution manager sessions received a lot of attention.  Of note, Australian SAP Mentors Matt Harding, Paul Hawking, Ingo Hilgefort, Nigel James, John Moy, Graham Robinson, and Tony de Thomasi were in attendance providing their wisdom and insights throughout the event.

Australian SAP Users Upgrading But Moving Away From SAP Centric Strategy

Traditionally an SAP only and SAP centric market, conversations with attendees confirmed a significant shift in approach.  Cloud computing, mobile enablement, business pressures, and the need to align with business strategy have driven many Australian SAP customers to stray away from a single vendor approach.  For instance, on the mobile side, SkyTech’s offerings show good penetration.  For collaboration solutions SharePoint and Yammer appear to have gained mind share.  CRM remains dominated by Salesforce.com and Microsoft CRM.  Analytics discussions include Business Objects but IBM Cognos, Oracle Hyperion, QlikTech, and other cloud based solutions show significant presence in conversations.

During the Future of Enterprise Software and SAP keynote, an informal poll of the 650+ attendees revealed the following SAP strategies (see Figure 1):

  • Stay with status quo: 15%
  • Move to shiny new SAP: 20%
  • Stabilize SAP and augment: 25%
  • Modernize SAP and surround with best of breed: 40%

Figure 1. Four Paths To SAP Optimization

With 65% of the respondents considering solutions outside the SAP sphere, SAP HQ should take note that the Fortress SAP approach no longer holds true in ANZ.  The good news – 60% of respondents have made the decision to upgrade to the latest SAP products and remain interested in having SAP as part of their long term strategy. SAP remains in good relationships with its key customers. While customers do see SAP as a core part of their strategy, it is not the only strategy.

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Executive Profiles: Disruptive Tech Leaders In Cloud Computing – Peter Lorenz, SAP AG

Published on June 7, 2011 by R "Ray" Wang

Welcome to an on-going series of interviews with the people behind the technologies in Social Business.  The interviews  provide insightful points of view from a customer, industry, and vendor perspective.  A full list of interviewees can be found here.

Peter Lorenz – Executive Vice President OnDemand, Corporate Officer, SAP AG

Biography
Peter Lorenz is SAP’s executive vice president of on-demand. He is also a corporate officer, reporting to Jim Hagemann Snabe, Co-CEO of SAP and leading the Business Solutions and Technology organization. As head of OnDemand,  he is responsible for all aspects of SAP’s on-demand solutions – SAP® Business ByDesign™ and SAP Line of Business OnDemand including development, solution management, delivery, and deployment, as well as service and support.

In his previous role, Lorenz was chief technology officer of SAP Business ByDesign. He also drove the enterprise service-oriented architecture for the solution. In addition, he was in charge of the enterprise services architecture modeling, product management within the application platform, and the application platform Supplier Relationship Management (SRM) development organization.

Peter Lorenz joined SAP in 1993.

The Interview

1. Tell me in 2 minutes or less why Cloud Computing is changing the world for your customers.

Peter Lorenz (PL): We impact two types of customers.  For our existing customers, we’re delivering a new level of flexibility, elasticity, and TCO (Total Cost of Onwership).  They get a new feeling.  They don’t (have to) wait to get on.  (A) new breed of applications now emerge that wouldn’t have been available to customers in the past.   They can access mobility in the cloud, experience different applications, consume new breeds of applications.

For new customers, especially in small-medium-enterprises (SME), they get something you never could have gotten before for that price.  Also they require minimal IT staff (i.e. 1 person) for  this cost and price/value point.   They also gain lower hurdles of adoption.

What’s the “ah hah” moment?  We’re delivering a co-innovation model and we have open conversations creating the experience part.  It’s non-transactional between us and not the data store.  Take Sales On Demand, it’s formless, not structured.

In Business by Design (ByD) – we deliver a more seamless process deep integration.   This experience is brought forward in a relaxed way.  This is the” ah hah” moment. I can really operate this with ease.  Another thing we hear, when we see mobility with the on-demand applications, these (components) all comes together.

2. What makes cloud computing disruptive?

PL: A key thing – cloud computing changes the speed of adoption.  Customers gain faster time to market and value.  We don’t get on these super large projects and wait for ages and people really do hate to wait for the system to come on line.

Most people associate cloud application with a like factor. There is something here.

Another positive disruption – guaranteed service for a defined price.  At the end of the day, we have a defined cost. We have the price of adoption. Price per user per month. All these things are fixed.

This is a much more defined world than on-premise where you run the whole thing by yourself.

3. What is the next big thing in Cloud Computing?

PL: We’ll need to connect the cloud to the on-premise world.  This is the first thing that has to happen.  This is important.  The fluidity of applications.  The private parts of the network. This has to improve a lot.  We have to take services that run on-premises and combine them with the data in the cloud.  Outsource, in-0source, this is something that will have to come.  This is not a raw technology problem.  How can applications be run that takes advantage of outsourced HR with SaaS CRM, with on premise finance?  We have to be able to monitor how its working.

Also, the hybrid world of SAP products need to work with each other.  We can bring them together in a defined way.  Stick it together.  These things can happen.  What I would think would happen is a private private cloud.

What you get easily ask, I’m’ a big IT dept getting beaten up.  I’m threatened by on-demand all the time.  The interesting thing in cases where they sell the operations infrastructure, we’ll be the internal cloud service provider.  The idea is to use all the scalability advantages internally.

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Executive Profiles: Disruptive Tech Leaders In Social Business And Cloud Computing

Published on May 29, 2011 by R "Ray" Wang

Executive Profile Series Delivers The Inside View On Disruptive Technologies

Starting this week, we’ll be kicking off an on-going series of interviews with the people behind the technologies in Cloud Computing and Social Business.  The interviews should provide insightful points of view from a customer, industry, and vendor perspective.  The transcript of the 30 minute Q&A’s will follow a common format:

Cloud Computing

  1. Tell me in 2 minutes or less why Cloud Computing is changing the world for your customers
  2. What makes cloud computing disruptive?
  3. What is the next big thing in Cloud Computing?
  4. What are you doing that’s disruptive for Cloud Computing?
  5. Where do you see technology convergence with Cloud?
  6. If you weren’t focused on Cloud Computing what other disruptive technology would you have pursued?
  7. What’s your favorite science fiction gadget of all time?

Social Business

  1. Tell me in 2 minutes or less why Social Computing is changing the world for your customers
  2. What makes social computing disruptive?
  3. What is the next big thing in Social Business software?
  4. What are you doing that’s disruptive for Social Computing?
  5. Where do you see technology convergence with Social?
  6. If you weren’t focused on Social Computing what other disruptive technology would you have pursued?
  7. What’s your favorite science fiction gadget of all time?

Scheduled Interviews Include A Who’s Who List Of Industry Thought Leaders And Market Makers

Cloud Computing

Social Business More…

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Research Summary: Market Overview – The Market For SAP Optimization Options

Published on May 15, 2011 by R "Ray" Wang

Forward And Commentary

This market overview provides a starting point to SAP customers seeking optimization solutions.  The document delivers actionable advice and insights into a proven collection of software solutions.  As part of the full series, best practices documents will follow with in- depth case studies and a critical product evaluation of this growing market of SAP optimization solutions. 

A. Introduction

With the average Global 2000 ERP deployment nearing 11.5 years in service, ERP customers face a significant challenge with updating their existing investments. Installed pre-Y2K, users have attempted to work around the best practices of the ‘90s while seeking innovation and application agility. Subsequently, SAP users face three main challenges:

  1. Higher cost of ownership that reduces overall ROI.
  2. An aging and brittle infrastructure that hampers innovation.
  3. Increasing complexity that hampers greater adoption.

B. Research Findings

As SAP customers choose their go- forward apps strategy, interviews from 100′s of clients show that four paths emerge (see Figure 1):
  1. Stay with status quo;
  2. Move to shiny new SAP.;
  3. Stabilize SAP and augment; and
  4. Modernize SAP and surround with best-of-breed.
Figure 1. The Four Paths Of SAP Optimization

 

Consequently, an $80.1 billion third-party SAP ecosystem has emerged to address nine key areas (details on each vendor in the official report):

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Tuesday’s Tip: Dealing With Pesky Software Licensing Audits

Published on April 19, 2011 by R "Ray" Wang

Organizations Report Increase In Software Licensing Audits

Across the board, the largest complaints about software vendors and their business practices have come from increasingly aggressive software auditing practices.  Once thought to be a small possibility, the software vendors now wield this big stick to drive up sales and of course ensure compliance.  Given the 32 percentage gain since Q1 2008 in the percentage of respondents faced with a software audits, procurement managers, CIOs, and CEOs have paid attention (see Figure 1).   Even the recent Gartner report from star analyst Jane Disbrow et al. shows that 61% of their customers have been audited by at least one software vendor.

Figure 1.  Software Vendors Ramp Up Software Audits

Software Licensing Audits Masquerade As Sales Tactics In Disguise

Is this shocking?  Should customers be concerned?    Given the relatively strong compliance rates in the high 80′s, customers should be livid that vendors are willing to jeopardize a relationship to shake down for cash (see Figure 2.).  Here are some key reasons for the audit:

  • Check for compliance
  • Identify installed base competitors
  • Drive incremental license sales
  • Prospect for up-sell/cross-sell

After speaking with 13 major software vendors, most admitted that software audit served two purposes.  The first – keep customers in compliance.  The second – shaking the bushes for new deals during the recession.

Figure 2.  Most Organizations Were In Compliance Post Software Audit

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