by Thomas Wailgum

SAP’s Most Recent “Big News” Teleconference, Translated for Mere Mortals

Feb 05, 200911 mins
Enterprise Applications

The highly personalized e-mail appeared in my inbox on Tuesday: “SAP’s Co-CEO Leo Apotheker formally invites you to attend—via Webcast—a Press Conference on Wednesday, February 4th, at 10 a.m. (EST).”

It continued: “SAP considers this announcement to be one of the most significant it will make this year, and we believe you will find the event extremely valuable.” What could this possibly be? A splashy acquisition? A new ERP version? A Microsoft merger? A settlement in the Oracle-TomorrowNow lawsuit?

All I knew was that Leo, Jim Hagemann Snabe (a member of SAP’s executive board with the Business Solutions & Technology group) and “prominent executives” from major Fortune 500 companies would be speaking. (Goosebumps.)

I don’t typically cover these types of vendor announcements, but Leo had me at “formally invites you.” How could I say no? And it also got me thinking: Just how interesting or boring are these events, especially when viewed via a Webcast? Is there value for SAP customers, IT managers as well as media types to attend and listen in? And would they be serving any food?

So I decided to keep a running diary, just like one noted sportswriter does for big-time events like the Super Bowl. Here we go:

9:55 a.m. EST: Got my Diet Coke and dry-roasted peanuts. Sugar and salt—you can’t beat it. Plus, Coke is a huge SAP customer, so I figured I’d get the SAP karma going.

9:57 “Ladies and gentlemen, if you could please make your way to your seats, our program will begin momentarily,” says an ominous voice over the Webcast. Uh, I’m seated.

9:58 The conference call music is pretty good: Kind of a driving, techno beat that makes you want to swing your shoulders. I’m rocking out. I wonder if Leo is too?

9:59 A photo of some really happy people in a conference room with the title “SAP Business Suite 7” appears on my Windows Media Player. Ah-ha! SAP PR’s Saswato Das welcomes everyone—especially those of us on the Webcast—to SAP’s NYC offices. And please silence your cellphones, everyone!

10:02 We are treated to a short film about a couple of SAP customers who couldn’t be in attendance today but presumably are really psyched about Business Suite 7 software: alcoholic beverage-maker Diageo and bed-maker Hastens. (No commentary is shared on the obvious synergy between those two customers.)

The movie’s message is eerily similar to the one I wrote about in previous blog posts: “SAP Tells Employees: ‘Do Not Order Any New IT Equipment at This Time'” and “Surprise, Surprise: SAP Promotes Enterprise Software Investment.” And here comes SAP’s hard sell again: “Economic turbulences are often good times for companies to think about how they can invest to gain market share … The key is to invest in IT solutions that help identify efficiencies and make use of them.”

I thought the key was to cut operational costs like it was the end of the world?

10:04 The Diageo CEO (Paul Walsh) says: “For me, SAP is kind of the glue around all our reporting systems, our operating methodologies….” Now that SAP is pushing this notion of “flexible” systems, glue isn’t the first word that comes to mind.

10:06 The Hastens CEO (Jan Ryde) just leapt (backwards) onto a bed and is now doing the SAP “interview” while lying down on a pillow. That was weird. He adds: “I get to sleep much more better with SAP.”

10:07 The ominous voice is back: “Ladies and gentlemen, please welcome Leo Apotheker.” Smattering of applause. Leo thanks everyone like he just won an Oscar. And the big news is…the launch of Business Suite 7!

Here’s the official word from SAP: Business Suite 7 software is “a next-generation software suite that helps businesses to optimize their performance and reduce IT cost. The new SAP Business Suite is designed to ease upgrades and help customers reduce IT costs with enhancement packages; gain stronger insights with select analytics capabilities from the SAP Business Objects portfolio; and achieve end-to-end process excellence through the modular deployment of industry best practices and service-oriented architecture (SOA).” Got that?

I’ll be calling it B.S. 7 for the remainder of the diary.

10:09 Leo says: “I would dare to say if banks would have had information systems as good as many of the companies represented here, we might not be in the situation we are in today. And you can quote me on that.” Oh, I will. I will.

10:12 “If you do not have flexibility in your system, you cannot adjust fast enough,” Leo says. “Not adjusting fast enough might be the kiss of death.”

10:13 “Leading analysts, some of which are here in the room today, rank SAP now consistently as the leading BI vendor, and thank you for giving us that credit. *And we will continue to ‘sponsor’ your research projects.” (*He didn’t actually say that last part.) I need more peanuts.

10:17: So why is B.S. 7 a big deal? It’s the next chapter of SAP’s success story, says Leo. “We are going to give upgrades the kiss of death.” (Again with the “kiss of death”?)

10:18 Alert! Alert! New buzzword: “We will be announcing ‘value scenarios’ today,” says Leo. I wish I were bi-lingual, like Leo. At Sapphire a couple years ago, he told me that the primary language at SAP’s HQ in Waldron Germany is English. German is second.

10:19 Great point by Leo: “We all like to talk about CRM, love to talk about ERP and all kinds of other three-letter acronyms…the only people who never understood those are businesspeople.” (Nodding head.) “We will want to talk the language of these people.” (Amen.)

Leo digresses a bit, and then says that he wants to stop talking so that he does not steal Jim Hagemann Snabe’s thunder.

10:20 So here’s comes Jim “The Thunder” Hagemann Snabe, who’s going to get into some technical details of B.S. 7. I met Jim H.S. two years ago, and I still have a problem correctly pronouncing Jim H.S.’s last names. (And this is coming from someone whose last name has been mutilated scores of times during the last 30 or so years, so I say that with a ton of empathy.)

10:21 Jim H.S. says, “I was flying in from Europe yesterday morning…and boy are my arms tired!” I wish he said the second part. He didn’t. Instead he talks about how depressing it is because of all the bad economic news. But he’s an optimistic guy. So we need to be optimistic. He’s got some positive news. (I’m guessing it’s going to involve B.S. 7.)

10:24 Jim H.S. going to the PowerPoint. All software vendors love to use the word “leader,” as in “we are the leader in business analytics,” as Jim H.S. just pointed out. SAP does have 82,000 customers worldwide. They need 18,000 more to get to the oft-stated 100,000 customer goal by 2010. Ouch.

10:25 For the sweet tooths out there (like me): 65 percent of all chocolate in this world is produced using SAP, Jim H.S. says. (SAP software makes chocolate?! Wow.) SAP systems process 2.5 billion utility bills per day. Guess what? My Diet Coke has also been “touched” by SAP systems!

10:27 In looking at Jim H.S.’s PowerPoint slides: Who are all those people in the stock-photography images: Average-looking models? Out of work actors? Friends of photographers?

I love the way Europeans rhetorically say, “no?” at the end of their statements, like it is impossible disagree with what they’re saying. It works on me every time.

10:32 Ian Kimbell, from SAP’s office of CEO, assists Jim H.S. with the new features demo. (What does that title specifically mean? Does Ian sit in the CEO’s office, on a comfortable leather couch, just waiting for the next assignment?) Ian’s a very happy guy. He alludes to Twitter functionality inside the new application. (SAP is quite Web 2.0, no?)

10:34 My Webcast connection just crashed! Attempting to reconnect….

10:35 I’m back. Ian’s still going strong with the demo. He’s talking and moving his part of the presentation along at a brisk pace: Can anyone really keep pace with the demo, as the demo screen shots keep flying by? Maybe it’s better if you’re in the audience.

10:38 “So, ladies and gentlemen, what have we seen here?” Ian asks. I’m not quite sure because my head is spinning.

10:42 Jim H.S. talks about SAP’s “enhancement packages.” (Wait a minute, isn’t that Viagra’s ad campaign?) The big message here is this: With B.S. 7, you can get all these “enhancements” to software without the pain of an upgrade and with reductions in TCO for customers. This all feels like an admonition of just how expensive and demanding SAP installs have been in the past and present, no?

10:45 This is all you need to know now: “Turn crisis into opportunity.” “It’s all about differentiation in tough times.” “Crisis often gives you a lot of opportunity.” (In case you’re not getting the theme.) Back to the demo. Ian is now showing how the SAP system can unite mapping and demographics data that can help retailers make decisions on opening new stores and getting customers into those stores via targeted marketing programs.

Cool stuff. But I’m thinking that in this climate, many retailers will be using this software to best determine which stores to close.

10:51 Jim H.S.’s wife (who’s not technically inclined) had asked him how he could sum up the B.S. 7 in a few words. “The Business Suite is a library of processes. It’s built on a consistent and modern IT architecture…” (and she probably stopped listening right about there).

10:53 Three of SAP’s Fortune 500 customers, those who have experience on the “front lines,” will now talk about their SAP usages. They are: Ed Toben, SVP of GIT & Business Services for Colgate-Palmolive; Jennifer Allerton, CIO of Roche (pharmaceuticals); and Jeanette Horan, VP of enterprise business transformation at IBM.

10:56 Watch the beginning of a theme here. Allerton says regarding upgrades: “The upgrades, themselves, tend to be not adding value to the business.” Ladies and gentlemen, enterprise software in 2009!

11:00 One hour and counting. Do CIOs get anything from participating in these chummy vendor panels? A fruit basket? Gift certificate to Best Buy? Discount on SAP maintenance fees?

11:03 For those of you still following along, this B.S. 7 launch has become a condemnation of SAP’s upgrade costs. Must be fun for SAP.

More from Roche’s Allerton on upgrades: “I wish I had [B.S. 7] about four years ago, it’s a little late, thank you,” and glances to Leo, sitting next to her. “We run multiple SAP systems, and that’s part of our challenge. We were running around 20 different SAP systems worldwide…. We then looked at cost of upgrading all of this, and said, ‘We’re going to get zero business benefit out of doing the upgrades on this. We’re going to start having to do things differently.” Which is why you’re here today? Just asking. She adds that she’s on a lower cost-basis now. Which is why she’s here.

11:06 Great point by IBM’s Horan on ease of use considerations for “casual” users. “As we are expanding our footprint more into the CRM capabilities,” she says, “now we’re extending out to the more casual users.” But the challenge for IBM now: making it work for back-office power users as well as casual front-line users. “So while we in the CIO office kind of love the fact that we’re running an SAP system, that is irrelevant to the salesperson out in the field.” Exactly!

11:08 This point by Colgate-Palmolive’s Toben gives you an indication both how much large companies rely on SAP these days and also how much large companies feel that packaged apps aren’t that unique: “We want SAP to be as, quite frankly, all inclusive as possible. Our strategy is first to go to SAP…. We think the differentiation is not just the software itself, it’s how you use it.”

11:15 The panel discussion is over. Now comes the Q&A.

11:17 A Maintenance question! Good. “Will B.S. 7.0 cut down on maintenance costs…” My connection just shut down again. Great. Can’t get back!

11:18 The only problem with Diet Coke is that it’s a diuretic.

11:23 I’m back. Colgate-Palmolive’s Toben is talking about PLM…guess I didn’t miss that much.

11:33 Vinnie Mirchandani, who is frequently mentioned in this blog, asks why the audience hasn’t heard the words “iPhone, SaaS or clouds” today? Roche’s Allerton says: “So, iPhones, we view them not as a business tool, but a nice to have.” Colgate-Palmolive’s Toben on cloud computing: “It’s probably not called cloud for no reason.” I see.

11:35 Leo’s next: “Let me give you insight into these buzzwords,” he says a little derisively to Vinnie’s question. “You know, enterprise application software is a very, very, very tricky thing. The amount of reliability and hardening and robustness that you need to build into a system is not to be compared to little toys you play with.” Quote of the day!

11:39 To the Great Buzzword Debate, Jim H.S. adds: “I believe it is our task in engineering to look at the various buzzwords out there and translate them into real customer benefit.”

11:49 a.m. EST: My connection just (thankfully) failed again.