Fifty years after creating the enterprise-applications category, SAP is accelerating the sweeping transformation of that world-shaping sector by launching the Business Data Cloud and making apps part of a strategic food chain whose new purpose is to fuel and enrich agents and other AI initiatives.
I think this is a brilliant move by SAP and is definitely one that CEO Christian Klein is clearly making from a position of strength in a fast-changing market. As the world’s leading provider of end-to-end enterprise applications, SAP has unmatched insights into how businesses in every industry run, how their processes connect, and how the data coursing out of those processes and interactions can be used to drive optimal business outcomes.
So while business applications used to sit at the top of the software stack because they power processes across an enterprise and generate that high-value data, here in the AI Revolution that data is no longer the end in itself but instead has become the raw material of the new IT powerhouse: AI overall and agents in particular.
As I see it, this transformation will make enterprise applications even more strategic and valuable than ever before — after all, without their primary source of nutrition (the data generated by the apps), AI initiatives are doomed to fail regardless of how much money is thrown at them.
I believe SAP’s new Business Data Cloud should be thought of as its Fourth Horseman of Business Transformation, making good on the long-promised “intelligent enterprise” in a new approach centered on data, powered by AI, and enriched by applications.
SAP’s Four Horsemen of Business Transformation
In short form, here’s how I see the new Business Data Cloud fitting into the unique value proposition SAP offers for the AI Era:
Business Suite: SAP’s core applications that manage end-to-end processes via a single data model yielding data fully optimized for AI
Business Technology Platform: unifies data and analytics, AI, app dev, automation, integration
Business AI: SAP’s complete portfolio of AI solutions and technologies, from agents to machine learning. SAP is releasing a new fleet of agents orchestrated by Joule, and also an “agent builder” that offers full semantic context to enable these customer- or partner-built agents to instantly fit in with existing end-to-end processes.
Business Data Cloud: a more modern and more capable evolutionary step upward from Datasphere that accelerates time to value by harmonizing *all* enterprise data, whether inside or outside SAP systems
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Am I Saying Enterprise Apps Are Becoming Extinct?
No way! That is absolutely, positively *not* my point; instead, I’m strongly urging business customers to evaluate what we used to call “apps vendors” in an entirely different way with applications being only one element in the required table stakes. For business customers, the “apps vendors” must now be looked at and scrutinized and selected on the basis of being able to deliver a spectrum of services and technologies and capabilities that are no longer limited to apps plus some platform stuff and some head-nodding toward AI and agents.
Rather, the new model has to be centered on the vendor’s ability to power world-class business outcomes with AI: from the apps that generate the data to the platform that holds everything together to the data cloud that unifies and harmonizes the data that powers AI solutions and innovations.
Final Thought
So what do we call these new-fangled thingies that we’ve hereunto called “application vendors”? Well, I suppose that old name will endure for a while — and the name itself is not as important as a clear understanding of the value they need to be able to deliver.
I suspect we’ll see customers think about them more and more as “AI vendors” and/or “AI data vendors,” with the ultimate moniker perhaps being something more along the lines of “innovation engines.”
Whatever the new handle turns out to be, the key is this: Applications are still incredibly necessary but are no longer close to being sufficient. And the apps are no longer the end game — rather, they’re part of the food chain for the AI-powered innovation engine of AI.
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