Sapphire '09: PAC Wrap-up

I've had the chance to attend most of the other significant application vendor events this year, and so far attendance, and more importantly, "vibe" has been pretty depressed... And actually I would say that while the mood was very low key, and at most gatherings (sans Don Henley) the population was scant. In comparison, Sapphire was maybe more active than others, even if it was much different from Sapphire 2007 or 2006 (2008 was kind of quiet too...).

This reflects SAP's recent results, as well as what we are hearing currently from SAP users and IT services suppliers. The cream of the market (Fortune 500) are still moving forward with projects, however they tend to be smaller and incremental for the most part, in order to keep moving forward with strategic goals but balance risks. While below this level, SAP projects are a lot shakier and most probably on hold. I also noticed this when speaking to various IT services suppliers available on the expo floor at Sapphire. The leading suppliers reported anywhere from high single-digit growth to low single-digit or flat... while the suppliers serving the upper mid-market, or those who have a larger exposure to the sub-contracting business are seeing -15%, -20% or even less! This correlates with PAC's new market forecasts, in particular in the U.S. where we are forecasting a -6% decline in the SAP SI market.

On the product side, Leo Apotheker kicked off the show on Tuesday, and as such took the first step as becoming the face of SAP for years to come (he is still co-CEO until the end of the month until Henning Kagermann formerly retires). Leo placed a focus on clarity, accountability and sustainability. Clarity has been a focus for SAP for a year now as the Business Objects acquisition has become a real part of the business, and Leo drew a few lessons learned from the economic crisis and how better visibility into data can help clients survive and thrive. As usual, Ian Kimball did his best "Billy Mays" up on stage and helped to demo BO Explorer and from the crowd reaction, I believe interest is really started to grow on this segment as expected in our recent report on the subject.

While clarity (which replaced "enterprise visibility" last year as one of the usual buzz words) as well as accountability (GRC, etc...) have been covered many times before, the issue of sustainability was never as front and center in an SAP keynote, and as I've commented before on this blog, this is not simple "green-washing" from SAP, but something much more concrete, covering its own activities, its solutions for customers and on-going leadership to help set direction and standards for a customer base that emits a sixth of the worlds CO2, with Peter Graf serving as one of the industries few Chief Sustainability Officers. Similar to BusinessObjects, this is also a solution area where SAP is delivering products today that in many cases tend to have a short-term impact, not only in a moral way but also for the bottom line, through better compliance and measurement of energy use throughout organizations. With Leo's smile/smirk I wasn't very sure if he was delivering a plug or a jab to Shai Agassi when speaking of sustainability, when he commented, "... and we don't have to wait for Better Places..." but it nonetheless made me laugh. Anyone else catch this??

This brings me to my final thought on the event. Given the current economy coupled with many customers issues surrounding pricing, I came into the event wondering if SAP would be able to patch things up? My feeling so far is that the revamped program for enterprise support has gone a long way to help improve things. Customers are still cautious since they would like to see what the SUGEN report in September will show. Will they start to realize some benefits? But for the time being, I think it will have a positive effect akin to "Applications Unlimited," when... let's remember, former PeopleSoft and JD Edwards customers were screaming like mad at Oracle and in many cases suing them! Credit has to be given to SAP that they've outlined very publicly what type of value they will try to achieve for their customers and over what time frame; something that is leading the market (at least on paper for now...). Having this pricing/maintenance hurdle removed (or at least lowered) towards the second half of this year may also go a long way to move customers forward with many of SAP's new products.

There's also a whole lot going on with the SAP Ecosystem... check back next week for a few posts on this and other Sapphire subjects!