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2/9/2010
08:03 PM
Bob Evans
Bob Evans
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Global CIO: An Open Letter To SAP Chairman Hasso Plattner

Ten very candid suggestions on overhauling SAP's value proposition, corporate culture, commitment to the cloud, competitive outlook and more.

About a year ago, my colleague Mary Hayes Weier was interviewing now-departed CEO Leo Apotheker about BBD and other things and in the course of their discussion about BBD, Mary asked when the multitenant version will be finished. And Leo looked at Mary like she was a stark raving lunatic and indignantly shot back an answer along the lines of, "Who cares? What difference does that make?" Well, it makes a whole heckuva lotta difference unless you're willing to have a product whose price is an order of magnitude higher than that of your competitors'--but Apotheker dismissed it as unworthy of discussion, a trifling distraction from whatever spin SAP was applying that week to the BBD story. I think, Hasso, your customers and prospects would simply like to know when it will be available, how it will work, and how it will interact with SAP's on-premises workhorses. If BBD's vaporware status continues to reinforce the belief in more and more people that SAP can't do anything beyond on-premise, what does that mean for your future growth prospects?

Co-CEOs: Full Speed Ahead. You seemed kinda defensive in your comments about 'legal expression' of top-level titles and how Oracle and Microsoft had their best years with dual CEOs or 50-50 management responsibilities, and that didn't come off well. It is strange, at least in the U.S., but that's okay--your company needs to change a great deal and if the right approach to get that done is to have a re-energized chairman and two CEOs, then damn the torpedoes. But don't try to streeeetch the truth to fit your narrative by saying that Bill Gates and Steve Ballmer, as well as Larry Ellison and Ray Lane, were equal partners--no one in his right mind would ever believe that. Did Gates and Ellison both have strong leaders beside them during times of great success? Absolutely--and no one's disputing that. But to equate that to co-CEOs was, well, silly. And besides that, it's unimportant--you've got much bigger fish to fry--so in general, don't get caught up in that type of trivial pursuits. At the same time, it wouldn't hurt for them to make clear in their upcoming public appearances to talk briefly and simply about areas of unique involvement and areas of overlapping responsibility and decision-making.

Your Agenda Vs. The Marketplace's. In December, SAP held a meeting in Boston at which it rolled out some strategic visions. In discussions about attending the event, I was told that SAP holds these strategy rollouts only once every five years, so it shouldn't be missed. And I thought, now that is just plain nuts--we aren't in 1950 any more and business dynamics do seem to find a way to change over the course of 60 months. If I'm a customer or a key partner and I'm told that SAP does this every five years, will that reinforce in my head that this is a nimble, fast-paced sprinter that can run with me, or will it conjure up images of a woolly mammoth with a couple of feet starting to get sucked into the tar pit of oblivion? And in your public comments the other day: you had the attention of tons of analysts and reporters and you could've said "Let me give you a coming attraction of what you can expect at Sapphire," but instead you just said no, we'll talk about those things at Sapphire, and everybody just cool your jets until then. Ironically, you cited Apple in that comment and said you'd be doing your presentation on an iPad to emphasize the growth in mobile computing. But whereas Apple's relentless innovation and success and brilliant communications and marketing has earned it the right to dictate when it will or won't take the opportunity to talk to the world, you and your team at SAP are in a very different place: sagging stock price, declining revenue, a lack of trust from customers (a point you made), and employees who are not happy (another point you made). You pledged to do everything in your power to restore the growth and excitement of SAP and you had a chance to push that forward--but you fell back on a schedule that is optimized for your needs and convenience, rather than that of the marketplace. And that seems like part of that massive cultural overhaul you need to lead.

Read more about SAP's reorg here.
Who Is SAP's Primary Competitor? The easy answer is it's Oracle. But that would also be the wrong answer. Oh, sure, you guys will continue to slug it out and take shots at each other whenever possible (Leo's last one was that he saw Oracle "fading in the rearview mirror"--ouch!), but unless you plan to acquire Dell and become an integrated systems company, I don't see Oracle as your top competitor. Rather, SAP's top competitor is cloud computing and SaaS and rapid and lightweight deployment and automatic upgrades and low up-front expenses and shared risk and Salesforce.com and SuccessFactors and Workday and NetSuite and many many other small, nimble, and highly successful companies who are giving the market what you don't have: speed, simplicity, predictability, lower costs, and a deeper sense of partnership and shared commitments. Now you can, of course, scoff at that comparison and say their combined revenue is barely a rounding error in SAP's overall financials. You can say that Business ByDesign will destroy all of them. You can say that customers are wrong, narrow-minded, unfair, and fickle. You can say that SAP is a powerhouse in cloud computing already and will only increase its lead in 2010. But I hope you don't--because none of that is true, no matter how eagerly you want to believe that it is. No, Hasso, your big-dog competitor is the new wave of simpler and easier and faster and less expensive cloud-based whizkids, and if you don't address that reality quickly and aggressively, just try to imagine how hairy the situation's going to be a year from now. Because for them, the future is now.

Well, that's it for now. Would love to hear back from you and your team on some of these suggestions because the Global CIO audience remains very interested in and committed to SAP. But unless you address the concerns of that audience, that interest and commitment will disappear faster than you can imagine. And that would be a shame.

All the best,

Bob

GlobalCIO Bob Evans is senior VP and director of InformationWeek's Global CIO unit.

To find out more about Bob Evans, please visit his page.

For more Global CIO perspectives, check out Global CIO,
or write to Bob at bevans@techweb.com.

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