Why SAP's Customers Don't Know Enough About the Enterprise Software Giant

Companies did $15 billion worth of business with SAP in 2007. And yet, once the contracts are signed, says AMR Research's Jim Shepherd, everyone seems to forget about SAP.

AMR Research's Jim Shepherd is continually amazed by just how little SAP's own customers know about the German software giant and its future product and growth strategies in the enterprise software market.

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"One of the things we find over and over again is that they are unaware of things that SAP has decided to do, and these things are publicly stated," says Shepherd, who's the senior vice president of research at AMR. "[The customers] aren't thinking about it from a long-term perspective of what this means to me."

The reasons why these IT executives and managers, who are clients of AMR and regularly consult with Shepherd, aren't on top of all things SAP are many, he says. "They've got businesses to run," Shepherd says, "so they don't spend time reading vendor press releases, going to [SAP's] website or wondering about their software vendors' business strategy."

Of course, SAP's customers should be following its executives' strategic announcements and new product releases with great interest. (For more on this, see "Five Things About SAP's Strategy That You Need to Know.")

Of the many reasons, there are two huge ones that can't be ignored: Typical engagement costs run into the millions or multimillions, and most companies believe that SAP will be a core system for 20 years or so, Shepherd says. So any major shift in SAP's product strategy, release schedule, target markets and partnership models, or license and maintenance fees can have a significant effect on a business's future.

"If anyone were honest with you, they certainly would say that they go into it with the hope that they'll never have to buy another one before they retire because it is a career risk and it's disruptive," Shepherd says. "You can argue, and I often do, it's a very healthy process for companies to go through but by no mean is it a painless one."

Copyright © 2008 IDG Communications, Inc.

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