As SAP approaches its 51st birthday and faces relentless competition from cloud-native companies barely half or even one-third its age, the enterprise-software icon is not only refusing to go gentle into that good night but has indeed become a youthful cloud-centric unicorn in its own right.
This impression came through loudly and clearly at an event last week at SAP’s glittering New York City headquarters around the launch of the SAP “S.Fashion” Experience Center.
The event included a stroll through some prototypical retail stores showcasing SAP apps that unite demand chain and supply chain, customer experience (CX) solutions enabling new levels of customized shopping, artificial intelligence– (AI-) powered perfume distilleries, and more. I even found this YouTube video about S.Fashion, and if the intent of the video was to appeal to people half the age (or younger!) than bloomin’ boomers like me, then I want to confirm to SAP’s video team that I was totally and utterly baffled by it (which I suspect was the goal).
And while demos in a headquarters building do not always translate into marketplace impact, the overall event gave me the clear impression that while SAP is now closer in age to 100 than it is to 0, it has somehow found a way to channel Benjamin Button’s ability to look and act more youthful even as he gets chronologically older.
The main speaker at the event, SAP senior vice president and head of solution and innovation experience Andre Bechtold, said a key objective of the network of experience centers SAP is rolling out across the globe is to “make innovation tangible.”
Advocating enthusiastically for co-innovation and co-creation with partners and customers, Bechtold said the centers are designed to not only stimulate new thinking about what’s possible but also create and execute new business models.
Talking about the use of AI to enable consumers to create their own customized perfumes inside a store, Bechtold said, “It’s not enough to just create the new perfume, though — you also need to create a new business model to monetize that.
“And while it’s easy for SAP systems to handle those processes, it’s a totally new experience and approach for our customers.” The experience centers, he said, are aimed at showcasing what has to happen for ideas to become practical and successful — that is, profitable — products and services.
Now, again, these slick new facilities are compelling and have the potential to drive new possibilities for customers and for SAP. But what’s the ROI? Where’s the proof that they make a difference?
Well, I’d say that we need to view these experience centers and the S.Fashion theme as pieces of a much larger whole, which is SAP’s ongoing effort to become and to be seen as a company centered on innovation, speed, and great customer outcomes.
And certainly, their financial results throughout 2022 and their outlook for 2023 reflect that those efforts are quite successful. As I’ve analyzed in more detail in “The New SAP Crushes Q4: Cloud ERP Soars 101%, Cloud Now 40% of Total Revenue,” Christian Klein’s company has become the second-fastest-growing major cloud vendor in the world.
One other perspective on this, and I must admit I was not sure if I was going to include these points in this article because I could argue two ways about them: that they are important, and that they’re simultaneously meaningless. But I think their relevance wins out, so here we go.
Look at the ages of SAP’s executive board members:
- CEO Christian Klein: 43
- Chief People and Operating Officer Sabine Bendiek: 57
- (incoming) CFO Dominik Asam: 53
- CTO Juergen Mueller: 41
- Global Head of Customer Success Scott Russell: 49
- Head of Product Engineering Thomas Saueressig: 38
- Chief Marketing and Solutions Officer Julia White: 49
Now, while I’m surely not in my 30s anymore (or 40s or 50s), that strikes me as a very youthful leadership team and one that is not trapped in a mindset bounded by past success, past approaches, and the ideas that powered SAP for its first half-century.
SAP has lots more work to do, but the good thing about that is the company’s leadership is fully aware of that and are aggressively addressing those needs. And in that context, relatively small things such as the experience centers and the S.Fashion initiative and “making innovation tangible” matter.
And if the company stays focused on customers and innovation and speed, then those new trimmings will matter a lot.
