Last week SAP employees, partners and customers gathered in both Orlando and Frankfurt (as well in virtual locations around the globe) for the annual Sapphire conference, this year recast as SapphireNow. For the first time the conference was run simultaneously in both locations through the miracle of Internet collaborative technologies. If nothing else it was a showcase for global collaboration run by a host of new anchors and visited by celebrities including Sir Richard Branson, Al Gore and General Colin Powell. It was also a chance for a somewhat beleaguered SAP, given its less than stellar financial performance over the last year or so, to showcase its new co-CEO's and their strategy for reinvigorating SAP. There was in general a lot of energy and activity around the conference among employees and partners, and spilling over to customer attendees. In particular the design / layout of the conference focused around a single exhibition hall that incorporated meeting areas, exhibits, and studios for small, medium and main stage gatherings. I'd say that considering the number of conferences I attend every year I'm fairly experienced in this area and for me, this is a best practice that other vendors could incorporate in their conference planning. The design kept everyone focused in the same space and helped to raise the overall energy level quite a bit.
The strategy, which was initially laid out in the Co-CEO roadshow earlier this year (see this post) and summed up in three pillars:
1. On demand
2. Mobile
3. Orchestration
delivered in three models:
1. On premise
2. On demand
3. On device
On demand and cloud were front and center in every keynote and many of the sessions throughout the event. As reported in my previous post there are two distinct focus areas for on demand apps, Business by Design (ByD), the fully functional end-to-end ERP for the mod market and Enterprise, stand alone apps that are intended as a way for enterprise SAP customers to get new functionality along side their existing ERP systems. The 2.5 release of ByD, the first multi-tenant version and according to SAP the scaleable release that will finally be offered beyond the few initial beta customers, was on display in the exhibition hall and is slated for release this summer (end of July is the rumor). ByD is targeted against the current mid market SaaS ERP players, Netsuite and Workday, as well as the on premise vendors, MS Dynamics, Epicor, Lawson, Sage, etc. ByD also is taking advantage of SAP's in-memory technology to increase the amount of real-time information available to the user (more on in-memory later in the post). The mid market segment that SAP is targeting is buying full ERP systems in the cloud, you only have to look at Netsuite's financial performance last year to see that, so ByD does have the potential to offer a growth opportunity to SAP if it is stable and as feature rich as they claim.
In the enterprise SaaS offerings SAP seems to be focusing on markets that have already proven to be fertile like sales force automation (SFA), talent management, travel & expense, etc (see this post for more information). I suppose these markets have proven that they are interested in SaaS delivery as there are already some strong players in each like salesforce.com in SFA, Taleo and Successfactors in talent management and Concur in travel & expense, but one does wonder why SAP would go after markets that already have strong leaders when there are a lot of markets in which SAP is strong on premise that they could attack with a SaaS offering. From a platform perspective SAP has three SaaS platforms, ByD, Frictionless and Coghead. It is not clear which platform will the their SaaS platform of choice going forward and in several meetings it was verified that the decision has not yet been made. It appears that the enterprise offerings are currently being build on either Coghead or Frictionless. None of the platforms are currently available as a PaaS offering although in discussion around partner strategy it would appear that they plan to move in that direction in the future. For the next release of ByD (r2.5) SAP wants to encourage partners to extend the functionality, especially to meet needs of different verticals. In general the partner ecosystem is featured prominently in SAP's cloud story.
Mobile and the on device pillar were present in almost every session. There were Blackberry apps, iPhone apps and the iPad was particularly popular. I saw quite a few iPad demos and SAP founder and Chairman Hasso Plattner even used one as a part of his ByD / in-memory demo during his keynote.
We did get more information on the SAP in-memory database technology although the use is still limited. During Hasso's keynote he discussed the move to in-memory technology and how customers could apply it in the near future in limited ways, stepping through 6 stages to the ultimate goal of fully operating on an in-memory database. In step one customers would use an appliance as their data warehouse / analysis solution added to their current installation of SAP. The appliance could be built on an HP blade with the in-memory database, which has a columnar compression algorithm and a solid state drive as the back up data store. I'm no expert in database technologies but it seems functionally to resemble the Oracle Exadata database machine (and other data warehouse appliances) which has smart flash cache and hybrid columnar compression. The difference seems to be that the Exadata cache predicts what data the user needs and caches that data, not the whole database while the SAP machine would cache the entire database.
Hasso demo'ed some ByD features that use in-memory technology to provide fast data access and analysis. From his end the demo was done completely on the iPad. I was very impressed with the iPad as an enterprise tool, I believe that its use in this capacity is starting to explode as more people get exposure to the UI and see its potential for business use.
Sustainability was also a prominent topic of discussion during the conference. This topic was very visible last year at Sapphire and has continued to gain momentum. Last year sustainability was focused on data center and energy use but this year it was more of a business focus across areas of opportunity from carbon management to environmental compliance.
Social also continues to be a hot topic for SAP. During the conference their new ideasourcing site was announced, powered by Jive software. The recently released social collaboration tool StreamWork was also a frequent topic of discussion. The tool is designed to facilitate decision making by bringing together people, information and process / business methods. Unlike salesforce.com Chatter, Novell Pulse and SocialCast, StreamWork is more focused on process driven collaboration than on ad hoc collaboration.
In general SAP is clearly a company in transition. There is renewed energy and excitement among employees and a great deal of activity. A lot of what was discussed at SapphireNow this year is future but if the level of activity continues there's no reason to believe that there won't be a lot of new and interesting developments this year. The next big milestone, the release of ByD 2.5 is rapidly approaching and is particularly important to reach to sustain the current momentum. The icing on the cake was the customer event on Wed night where Carlos Santana was the featured performer. The concert was excellent (but I'm a fan so I guess I'm biased).
