The vendor must get ready to grow its developer community, harness the sensor data revolution, and bring together the consumer and enterprise worlds.
Once SAP reaches its base camp, it must get ready to scale three new peaks that will help Bill and Jim keep the company's shine alive.
The first is to grow a developer community worthy of the new harmonized platform and product strategy that SAP needs to create. It's clear that everything about SAP's aspirations as a cloud company, an analytics company, a database company, and a mobile company will depend on having a solid, unified, and highly focused developer community that can make SAP the App Store of the enterprise.
Developers will only show up if there's a clean, easy commercial environment--a la the Apple App Store--where they can sell their wares. This is a huge mountain to climb, and an expensive one. But everything on the enterprise side of SAP's future success, and on the consumer side as well, rests on the creation of this community and where it can sell its wares. And without the harmonization of product and direction, this community won't even know where to start, much less where SAP will be able to take it.
The second peak ahead for SAP is harnessing the sensor revolution, also known as the Internet of things. There will be billions of sensors sold in the next few years in phones, tablets, and smart appliances as well as in cars, factories, refineries, libraries, utility meters, and medical devices. Every one will have enough intelligence to act as a data source, if not a data consumption device.
These devices present SAP with two extraordinary opportunities. On the data analysis side: if ever there were an incredibly rich source of data for HANA to analyze, these sensors are it.
The second opportunity is on the business process side: The sensor-generated data streams, once analyzed, will present decision makers with opportunities to make much more intelligent decisions across the enterprise and in their customer interactions. And the richness of the data and decisions will provide new ways to improve existing business processes and create new ones. That will be particularly true when sensor-based data is married to internal ERP, supply chain, CRM, and HRMS data: If SAP can broker that marriage, then the gains of the last two quarters will look modest indeed.
The final mountain SAP must climb is the convergence of the consumer world and the IT/business process world. This will be huge, and hard to do credibly. Very few companies can actually do this – Microsoft and HP can, but that's mostly a back-end, not a go-to-market, convergence built on leveraging internal synergies. And despite the iPad's success in the enterprise, Apple still has to prove that it can change its DNA and get into the enterprise via the front door, instead of coming in the backdoor as it has with the iPad.
SAP will need to get its ducks in a row to be able to graft a real consumerization play on top of its enterprise play. Not doing this isn't an option: This is where technology is going, and it's where SAP needs to go, too.
Notice that I haven't mentioned mobility, in-memory, or on-demand once. That isn't a mistake: while the on-going focus on the big three initiatives at SAP has provided a much-needed coherence over the last two years, I think they've worn out their welcome. The reason is simple: all three represent enabling technologies, not business-ready or consumer-class solutions. Bill, Jim, CTO Vishal Sikka, and pretty much everyone at SAP has done their level best to ensure everyone knows that SAP can deliver on these three technologies.
But now's the time to talk about what SAP is going to do to synchronize these technologies with demonstrable business, and eventually consumer, value. HANA as a replacement technology for Oracle DBMS in the SAP Business Warehouse is an excellent example, and from a sales pipeline standpoint it's a big win. But SAP needs more examples like this one for mobility and on-demand, and this solutions dialogue is the one that it needs to have with the market, much more than the pure technology conversation it's been having of late.
Keeping the shine on SAP won't be easy, so don't be surprised if there's a new sense of urgency now that the company is at the top of its game. SAP must abandon the old battles--Walldorf vs. Palo Alto, marketing vs. development, my new thing vs. your new thing--to make room to engage new ones. And that's not just because the company must get ready to scale a few more peaks, but because its never-ending list of rivals--Oracle, IBM, Salesforce, Microsoft, Workday, Infor--will be trying to either climb the same mountains or find others from which they can challenge SAP.
Every one of the above rivals, and many others, will be dead set on putting a little tarnish on Bill and Jim's shiny new SAP as they climb down the mountain and get ready for the next peak. Nothing succeeds like success, but success makes SAP even more of a target. This year marks the 40th anniversary of the SAP's founding. With the benefit of 40 years of hindsight, it's safe to say that things have never been better for the company. And they've never been as precarious either.
Josh Greenbaum is principal of Enterprise Applications Consulting, a Berkeley, Calif., firm that consults with end-user companies and enterprise software vendors large and small. Clients have included Microsoft, Oracle, SAP, and other firms that are sometimes analyzed in his columns. Write him at email@example.com.
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