SAP Torn Between the Old World and the New

Let’s look at a “day in the life” of enterprise software juggernaut SAP: Tuesday, September 28, 2010.

SAP and its newly acquired subsidiary Sybase proudly announced a tongue-twister of a new product: The Sybase Mobile Sales “Super App” for SAP CRM for BlackBerry smartphones.

SAP and Sybase promised that the mobile app will not only deliver “comprehensive access to up-to-the-minute SAP customer and business analytics data, [but] users will have the ability to seamlessly conduct workflow processes anytime, anywhere.”

Now, whether the new app can actually be considered a “Super App” (doesn’t Gartner have some type of chart on this topic?) is up to the mobile workers who will use it.

It’s refreshing, however, to see SAP innovating (and I use that word lightly) for the legions of business users yearning for more mobile applications. According to the Yankee Group, for instance, mobile CRM solutions have a more than 70 percent adoption rate among enterprise users, surpassing even traditional CRM options, which SAP and Sybase noted in the “Super App” release.

That’s the New World for SAP.

Then there’s the Old World. Contrast the “Super App” unveiling with SAP’s hushed announcement, also on Tuesday, that it was extending the “maintenance duration” for SAP R/3 4.6C from Dec. 31, 2010, to March 31, 2013.

For those SAP R/3 users not ready (or unwilling or unable) to upgrade to ECC 6.0, it was a reprieve. They’ll get the extended support from SAP, of course at an increased price: Those customers on SAP Standard Support will be offered support at an additional fee of 6% per year. (Those customers already on SAP Enterprise Support customers won’t have to pay any increase.)

Look, I know ERP maintenance and support is unsexy as it gets. It’s the polar opposite of new mobile computing apps. But SAP’s got too many legacy ERP customers. TechTarget’s Courtney Bjorlin, who first reported the news, noted that nearly 15 percent of customers are still running R/3 4.6c.

SAP can’t force them upgrade. But SAP can’t ditch them, especially when there’s serious maintenance dollars to be made off the laggards. (Just ask third-party support providers.)

The complicated dilemma facing SAP is no different than Oracle’s or any other ERP or CRM vendors’ current task: bringing enough of the base forward on lucrative upgrades while mollifying (and milking) the legion of legacy customers who like what they already have.

This can give any vendor a bit of an identity crisis.

Further adding to the unease: SAP’s Web-based Business ByDesign suite of ERP apps is not exactly of the New World, since competitors have been at this for a decade, and definitely not of the Old ERP World. (Middle Earth?) SAP is targeting the SMB segment with ByD, which it historically embraced with about as much affection as the proverbial red-haired step-child.

An unflattering profile of ByDesign in The Wall Street Journal, which I also saw on Tuesday, illustrated the challenges that SAP faces, particularly in Europe, as SAP tries to catch up to cloud-based competitors.

Said one small company CEO, in the article: “It was a tough decision to believe in SAP.” That sentiment is easy to understand, since SAP must make many different promises these days.

The lingering question, then, is whether both the old and new customers still believe in SAP. Its future depends on it.

Thomas Wailgum covers Enterprise Software, Data Management and Personal Productivity Apps for CIO.com. Follow him on Twitter @twailgum. Follow everything from CIO.com on Twitter @CIOonline. E-mail Thomas at twailgum@cio.com.