The third quarter at ERP software giant SAP may have made the finance guys want to call the local priest and exorcise the demons from the general ledgers. A sampling of news surrounding the Walldorf, Germany-based enterprise software provider reveals the extent of the financial misery.
“SAP Scraps Outlook But CEO Confident on Margins.” That one explains the financial carnage that SAP experienced in Q3 and why the future looked even worse.
“SAP’s Forecast Goes M.I.A.” Things got so bad, SAP execs said they would stop providing “a specific outlook for Non-GAAP software and software-related service revenues for the full-year 2008” to analysts. Never a good sign.
“SAP Co-CEO Grilled on Maintenance Increase.” SAP took heat on its new maintenance plan, which new and old customers are being required to partake of—at a higher fee than before. Many SAP customers have been rather upset.
“SAP Tells Employees: ‘Do Not Order Any New IT Equipment at This Time.'” SAP shut down internal IT spending, including software purchases. Hmmmm, wonder if that’s a message SAP’s customers should hear, too?
“Salesforce.com and Google Execs Blast Oracle, SAP and Microsoft.” And recently, the new kids on the block, lead by Salesforce’s Marc Benioff, called SAP’s traditional approach to on-premise software either dying or already dead.
The lone shred of positive and intriguing news for SAP, however, came in the form of a new hire: John Wookey, an applications development guru who spent 12 years at SAP’s archrival Oracle.
Like a major-league baseball player going from the Red Sox to the Yankees, this was big news in the enterprise apps space. SAP was relatively quiet about the hire (there was no formal announcement), but execs were seemingly giddy with their catch, calling him “one of the most respected and renowned software applications experts in the world,” noted SAP spokesman Scott Behles, in an e-mail.
But here’s my question: With all that’s going wrong at SAP right now, can a former Oracle ERP honcho, who left behind some unfinished business at Oracle in the form of the yet-to-be-delivered Fusion Applications suite, change SAP’s fortunes that much?
Wookey has been brought in for one big reason: As executive vice president of “Large Enterprise On Demand,” as SAP terms it, Wookey “will be helping organize SAP’s on-demand product roadmap under a single strategy solely for large enterprise customers.”
Solely for large enterprise customers? Really?
Pulling off an enterprise-level, on-demand (or SaaS or cloud computing, whatever you choose) initiative is not going to be easy for SAP and Wookey.
In fact, it’s going to be ridiculously hard.
You’ll remember that SAP’s efforts with its Business ByDesign on-demand ERP app for the mid-market ran into troubles and had to be scaled back this year. That was after years of development on its multitenant SaaS infrastructure and an unspecified but surely gargantuan investment.
When asked if Wookey would be available for an interview soon, SAP’s Behles wrote in an e-mail that “John will not be doing interviews at this early stage.” Judging by the task that lies ahead of him, I wasn’t surprised.