With 25,000 of SAP’s best friends arriving in Orlando today for Sapphire, I’m hoping that among the many product launches and strategic alliances the company discloses this week will be detailed discussions of five issues essential for SAP to remain the world’s fastest-growing apps vendor.
Per my recent analysis headlined “SAP Once Again Scorches Salesforce, Oracle, and Workday with Q1 Growth of 27%,” SAP has consistently outperformed its major rivals over the past several quarters with a cloud growth rate that’s 3X higher than both Salesforce and Oracle.
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But, as we often note here in the Cloud Wars, nobody owns first place — it must be earned over and over and over. And for SAP to stay in that top spot, I believe it has to address these five issues clearly and compellingly at Sapphire.
1. AI Enhances the Franchise — Here’s How. For all of the great new products and related technologies SAP has developed recently — Business Technology Platform, Business Network, Signavio, Joule, Business Data Cloud, etc. — the franchise is still applications, now led by Business Suite. Big questions for SAP to answer:
- How will agents and applications work together for customers? Does Satya Nadella’s end-of-days prediction about the looming “SaaS apps collapse” apply to SAP? Christian Klein and company need to be incredibly clear on this.
- How will Joule and agents help drive not just efficiency but growth?
- How will agents extend the investments SAP customers have made in Business Suite?
2. Feeding the AI Beast: Make Business Data Cloud Promiscuous. Launched earlier this year, Business Data Cloud has huge implications for SAP’s overall business — and that all hinges on BDC’s ability to funnel mass quantities of high-value data into SAP’s rapidly expanding AI funnel. Big questions for SAP to answer:
- There are lots of data clouds out there — what makes SAP’s better for customers?
- The Databricks partnership is vital — but is SAP adding more partners for BDC to ensure it can offer customers all the data — both from SAP systems and from third-party systems — that they need?
- Snowflake seems like a perfect partner for BDC — will we see that at Sapphire?
3. Industry Clouds + Business Data Cloud = Customer Value. For almost half a century, SAP has been accumulating industry expertise and industry data. Interlaced supply chains and the relentless acceleration of global business are big challenges for customers. Big questions for SAP:
- As more and more customers are looking for high-impact industry-specific solutions, can Business Data Cloud unlock all that potential for SAP and its customers?
- SAP’s industry solutions have been a bit quiet lately — does the company still fully believe in the power of industry clouds enhanced with unique data and AI?
4. Business Network + Supply Chain = More Customer Value. Over the past year, SAP has greatly enhanced the capabilities and positioning of Business Network. Along the way, it has also pushed Business Network and Supply Chain closer together. Big questions for SAP:
- Do customers fully understand the enhanced relationship between what’s offered by Business Network and what’s offered by Supply Chain?
- Is it time to repackage those as a unified entity with a broader mandate reflecting the unique power of Business Network?
5. Hyperscaler Report Cards: References and Preferences. SAP has powerful relationships with AWS, Microsoft Azure, and Google Cloud. After working closely with each of them for several years, SAP should share some insights about the unique advantages each offers, in much the same way Signavio helps RISE customers map out their best roadmaps to the cloud. Big questions for SAP:
- Over the past year or two, which of the hyperscalers has been gaining traction and/or market share among SAP customers?
- Over the past year or two, which hyperscaler is taking share for financial-services customers? Industrial customers? Retail?
- Over the past year or two, which hyperscaler has been tied most frequently with big Business Suite deals? Or big AI deals?
Final Thought
As noted above, the Cloud Wars don’t permit any company to “own” first place — vendors in the #1 spot only get a temporary lease that can be revoked at any time.
SAP does a great job at using Sapphire to share its vision with the world, and no doubt SAP wants to convince the global Sapphire audiences that SAP deserves to be the enterprise-apps vendor of choice. And I think their chances of making that case will improve dramatically if they shed some light on the questions raised above.
