03 November, 2009

Mastermind Interview: Leo Apotheker, CEO, SAP

Leo Apotheker will be interviewed by Yvonne Genovese & Nigel Rayner.

Introduction

Enterprises have a love-hate relationship with major business application vendors. SAP is one of the 4 megavendors and makes the European success story in software. But new challenges are facing SAP and its competitors, with market saturation on ERP & CRM, customers are requesting more industry-specific features, companies need to optimize their budget (e.g. maintenance), cloud computing, These are the issues that will be discussed.

Interview


The future of enterprise computing is composed of 2 trends: a lot of innovation (beyond cloud computing) and companies being stuck in infrastructures from the past. The business vision of SAP is that the network and "people" are at the core of the solution.

And, to enable the collaboration, you need to embrace all the technologies (cloud and on-premise, with entire lifecycle management).

The next wave of technology is about patterns, analytics or "close-loop" that help the business run better. It will generate a new generation of "real-time". The transactions and analytics will merge toward true event-based systems.

Pattern-based strategy builds upon collaboration and huge datasets available.

SAP has built a simple GUI over its system that is looking like iTunes.

Oracle has announced Fusion, still a bit confusing.

SAP is building "timeless" software: the components of IT environnement as well as the business are evolving at different speeds. Therefore you need an architecture that allow for this (e.g. user interfaces need now to be "sexy").

The business suite should evolve (beyond its functionality) toward a platform with more capabilities, including on-demand and hybrid models. Example: BO is included in the business suite to analyze at the operational level and SAP will continue to provide the complete BO toolset.

Cloud computing or just virtuallization? SAP is running in the cloud: multi-tenant, delivered over the web, virtualized, centrally managed, elasticity... For both "Business by Design" and the "Business Suite" (wrapped in cloud capabilities). There is an example for eSourcing, with thousands of users.

In-memory analytics will revolutionize the way we do computing. You will not need to build datawarehous anymore (longer term). It scales in a linear fashion (just add memory and CPU). It will extend the business suite. And it will allow the "close-loop" (patterns).

The next version of "by Design" will run on in-memory database. A major release announcment should arrive early next year.

SAP tries to shift its business model: licenses, subscription, consumption-based... That should drive time-to-value and balance between CAPEX and OPEX for customers. The support model is an industry standard but it SAP wants to get it to a higher level (beyond software modules support), with higher prices but with independant KPIs (from Gartner) that assess the value delivered.

SAP has 93,000 customers. All the business models will eventually be available to all of them.

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