SAP Launches "Business Suite 7" - Are Customers Buying it?

Yesterday… in case you hadn’t heard was SAP’s “Business Suite 7” launch event in NYC, which I attended along with what looked like about 70-80 analysts, bloggers, reporters and SAPer's at their global marketing office.

Leo Apotheker started things off by making perhaps his most aggressive case on why customers should consider investing in a new suite during what might be the largest economic crisis of our lifetimes. And on several fronts, he did a commendable job and echoed many trends PAC has been seeing and writing about, including:

• During this quickly changing business environment, companies require more facts, faster and more reliable data… ahem, cue Business Objects BI
• With a clear “ceiling” placed on revenue growth for many industries (retail…), companies will need to look at ways to be more profitable and more efficient… cue a technical (and maybe, functional) upgrade
• Companies need more flexibility to support actually business and process changes… okay, that clearly plays into Netweaver very neatly!

So what is new about Business Suite 7?

Well to start off, I see Business Suite 7 as an evolution of some SOA topics (that have been talked to death!), including eSOA and xApps, evolving now into something more easily consumable (at least in concept) by the end-user. This has evolved into the “Value Scenario,” where the integration of a full process runs not only across industry and horizontal applications, but also outside of the organization. One example shown was for “Integrated Product Development,” which is not simply supporting time-to-market, but also measuring scalability of a product, quality and market information. For market information, one portion of the solution collects external “product impressions” and tag cloud from twitter and other sources, in order to understand how a product is perceived against how the product has performed against sales and other metrics. These “Value Scenarios” will be offered mainly as industry-specific solutions (I see them more as overlays then solutions), through the enhancement package system.

SAP trotted out three of its best customers to pledge their support, including Colgate-Palmolive, Roche and IBM. Although none have used these “Value Scenarios” as of yet, all did state their intentions to move forward with their SAP system investments. And this isn’t surprising; they are Colgate-Palmolive, Roche and IBM! They can afford to always invest at a higher level in IT, in order to prepare themselves for better days. However, clearly this is a very select group and not indicative of average SAP customers, which as SAP likes to point out often is dominated by SME’s (over 70% if you take SAP’s word on this!).

While there’s much more to the contents of this release and other benefits I’ve skipped over, I would like to get to the main point now: will customers be interested in Business Suite 7… today?

Well to start off, according to our own research, slightly less than 4,000 SAP customers have done an upgrade beyond technical-only to ECC 6.0. This PAC figure is somewhat confirmed by SAP’s own statement that there are “more than 1,000 live customers” using the enhancement packs. Being generous, let’s just say that 2% of SAP’s customer base is using enhancement packs today, even if it may just be piloting.

SAP’s approach now to SOA, focused around providing integrated solutions across and outside of their modules is quite similar in many ways to Oracle’s AIA and process orchestration. SAP may have the upper hand in that all of its own applications (besides Business Objects) have been consistently designed on the same platform, and are not integrations between different acquisitions, architected differently, etc. As well, the ability for customers to pick and choose which new functionality to switch on/off within the framework of enhancement packs is again a very forward-looking move by SAP compared to its competitors.

However, will this all be enough to entice customers to adopt, when the bulk of them must go through an upgrade to 7? While “Value Scenarios” could be very efficient and hard-hitting solutions if the customer base had already moved to ECC 6.0, I believe customers are in way too much of a “wait and see” mode this year to consider such a move.