“SAP reshapes strategy for online software”

Written June 15th, 2009 by
Categories: CEO's Blog
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This article by Richard Waters appeared in yesterday's Financial Times.

I guess the bottom line is that SAP's John Wookey (who they stole from Oracle last year) seems to be signaling the end of offering "ERP on-demand" and will focus SAP on delivering "Fringe solutions (my term) on-demand".

Now I think SAP is on to something!

Here is what Mr. Wookey is purveying:

the "…new approach will be to integrate its online
services far more closely with its traditional business software, in a
hybrid model that tries to take advantage of the big installed base of
SAP’s business applications."

Based on our success over the past year, I can guarantee that there is a pent up need in the SAP marketplace for hosted solutions that extend the investment that companies have made in their SAP systems. 

"Customers will be able to mix online services and traditional software
without running into the sort of problems that currently bedevil the
software-as-a-service business, such as balkanising a company’s data by
holding it in different systems"
, said Mr Wookey.

Amen!

AMR's Bruce Richardson seconded this more cooperative SAP SaaS strategy by saying:

"The simplicity of this hybrid approach is likely to have a big appeal to corporate technology departments"

The key word here is "simplicity", which quickly translates into cost on projects.  No one has buckets of money to spend frivolously nowadays.  No capital up front, and expensing the solution over time, is a definite winner.

Mr. Wookey's final words were fascinating.  He outlined a vision:

"…that would eventually see SAP open
up its technology to allow other developers to build on-demand services
that would tie into its software.

This more open approach represented “a bit of a cultural shift at SAP”, he added."

I guess this "vision" brings new meaning to the phrase "hindsight is 20-20".  SAP's technology is already quite open to outside developers and we currently process over 4000 SAP transactions per month to prove it 🙂

I think I'll give Mssrs Wookey and Richardson a buzz and let them know that the future is here today.

Sam