Rating the Summer's SAP News Stories: One Blogger's View

Recently I asked a friend of mine, who is pretty plugged into the SAP market, what he thought of the Software AG acquisition of key SAP partner IDS Scheer. It was news to him, which reminded me: during the summer, lots of folks take the chance to catch some rays, and aren’t glued to their newsreader like I am. So for anyone who missed an SAP story this summer, I thought I would do a quick rehash of some of the notable developments, and make it a bit more interesting by rating SAP’s response to the story on a scale of 1 to 10, with 10 being a “brilliant move” by SAP and 1 being, “not so much.” I’m a pretty tough grader; anything 6 or higher would be a good grade.

For those who want a grading scale more like the one they contended with in college, I consider “6” equivalent to a B-, and you can use that to meter out the rest of the ratings. I’ll include at least one link to each story for those who want more context, and a rationale for each rating. Most of these stories are ongoing, so SAP has plenty of chances to improve (or decrease) their current rating I’ve assigned them based on how it all unfolds. These ratings are solely my own and reflect my own opinions on these developments.

Software AG acquires IDS Scheer – It was a shocker to many SAP observers to see IDS Scheer get acquired by a company not named SAP. IDS’ Aris application has long been considered the “state of the art” modeling tool for SAP environments, and with SAP’s increasing emphasis on BPM and process modeling, IDS’ products are getting an even closer tie-in to SAP’s own platform via Solution Manager integration. The idea that SAP can now set things right by simply acquiring Software AG is more complicated than it seems, and shouldn’t be expected in the near future.

I have yet to see a comment from the SAP side with SAP’s take on this news one way or the other. SAP’s own process modeling and execution environment, NetWeaver BPM, is not intended to do the same things that the IDS tool set does. Therefore, SAP will need to ensure that its relationship with Software AG is just as productive as the previous partnership with IDS. As far as speculation goes, one thing we do know: process modeling tools are far from number one on the budget-crunched IT manager’s wish list. SAP may have their eyes on more immediate gaps to fill, such as the acquisition of retail planning functionality from SAF AG.

Rating: 4. Rationale: SAP seemed out of step on this one, but with the market not focused on process modeling presently, there is time for SAP to make a product correction here if needed. This rating might seem a bit unfair given that there’s only so much SAP can do about acquisitions that don’t involve them, but without any enlightening response from SAP on how Software AG’s acquisition impacts their own BPM plans, a “4” is as high as I’m willing to go. As I have written, I believe the stakes of BPM are rather high for SAP, so I can only hope that this low rating will emphasize how seriously I think SAP needs to take their process modeling future.

SAP’s BBD Product not ready for prime time – To be fair to SAP, they have until Sapphire 2010 to sort out the Business By Design (BBD) business model before they may have to assign the word “failure” to this expensive project. In the meantime, however, every few weeks an intrepid reporter seems to pull out a bit more on this story. SAP is not currently setting the tone for how the BBD plot unfolds – savvy market observers are.

The biggest source of debate? Whether BBD is truly on a multi-tenant architecture or not. (Most believe that BBD must be multi-tenant in order to become a profitable product in general release). SAP now says that BBD is multi-tenant, but its own version of multi-tenant, meaning multiple BBD instances on the same blade. Confused? ZDNet’s Dennis Howlett has been breaking new information on BBD as well as anyone and his latest post sheds some light, though the information and quotes in his blog on BBD's multi-tenant capabilities conflicts with other recent quotes from SAP in the previous article link I've used. This kind of conflicing information, even amongst very reliable sources, is not very useful for SAP. SAP has another nine months to sort this out, right now, the news coming out is not especially optimistic.

Rating: 3. Rationale: SAP does not appear to be out in front on this story, and a successful BBD product would be a real asset to the SAP product line. Greater urgency is needed here, or a more convincing and clear marketing message, or both.

SAP issues "Social Media Participation Guidelines" for employees - Six weeks ago, I criticized SAP in this blog for not having a set of guidelines for its own employees on how (and when) to participate in blogs and social networks. Now SAP has its first set of published guidelines. The guidelines were developed on a wiki and were reviewed over 1,000 times with 20 major iterations. The final result shows the hard work invested: the participation guidelines are concise, clear, and well-thought. The guideline’s blogging tips are useful to anyone who must balance online participation with employers’ expectations. Of course, issuing guidelines does not mean that suddenly those inside SAP who were hesitant about blogging are now freely doing so. Cultural change within companies is complicated stuff, and I know that some inside SAP are still feeling out what may be acceptable and what is not. But a set of public participation guidelines is an important step.

Rating: 8. Rationale: This is a story SAP is showing industry leadership on. I don’t give them a 10 simply because I want to make clear that the work is not done yet. Transparency is a process and SAP, like virtually all companies, is still hashing through this.

SAP launches Learning on Demand web site – Taking many by surprise, myself included, SAP recently launched its Learning on Demand (LOD) web site. The LOD site implies a welcome shift inside SAP when it comes to making SAP training affordable, flexible, and better integrated into the day-to-day worklife of SAP customers. There is a long way to go: a lot more content is needed; better tie-ins between LOD courses and SAP certification exam preparation is important.

More good news: after keeping things under wraps and not involving the community prior to launch, the SAP LOD team is now in active engagement with community influencers (including the SAP Mentor Initiative that I am a part of) to further enhance its content and improve its features. One nifty feature: The single-sign-on capability for those who are already registered with SAP’s community network. The ability for consumers to rate the courses they’ve purchased, thereby providing a means for the best content to “rise to the top,” is another useful feature already built in.

Rating: 6. Rationale: I really like what SAP is doing with LOD; this rating could indeed go much higher if LOD becomes what it could be. Right now SAP knows that the LOD site is a “soft launch” and there is plenty of work still to be done, so the “6” writing is intended to keep the fire under SAP Education nice and hot. The “6” rating also includes an “it’s about time” point deduction, but now that the site is launched, I really like the collaborative approach the LOD team is taking.

The first of the SUGEN KPIs is now being measured by SAP users – For those who are following the long-running Enterprise Support story, the first of the KPIs jointly established by SAP and its user group representatives (SUGEN) is now being measured, and there should be more information on the progress of measuring this first KPI (for CPU utilization and storage performance) in the fall. This KPI is the first in a group of 11 that SAP and SUGEN have established that will eventually be measured. There is quite a lot riding on these KPIs: SAP has agreed not to raise its maintenance fees to 22% unless it meets the agreed-upon KPI measurements. More importantly, SAP needs its customers to have a much greater buy-in on the value of Enterprise Support. Whether meeting these KPIs will impress SAP’s customer base depends on how accurately these KPIs reflect real value and whether they are achievable for the typical SAP customer. Certainly the collaboration between SAP and its own user groups around what constitutes measurable value in SAP support is a very welcome one, strongly preferred to the original strong-arm stance SAP took on this issue.

Rating: 5. Rationale: For SAP’s overall handling of the Enterprise Support rollout, I would have awarded a 2, but SAP deserves a few points for greatly improving on the initial response, despite some kicking and screaming and more than a bit of posturing along the way. I can’t go higher than 5 because the story is unfolding like molasses and the lack of information coming out from both SAP and SUGEN on next steps in the dialogue is itself a news story. Transparency is not the word that comes to mind when it comes to SAP and SUGEN keeping the rest of the world posted on what they are talking about (thought about a webcast folks?).

If these KPIs are all being actively measured sometime in the next two quarters, and if SAP customers end up embracing them, this rating will go a bit higher. But I have personally been persuaded by arguments that not all SAP customers should pay the same level of support since they don't consume the same level of attention from SAP, so I probably won’t award the highest rating unless SAP and its user groups develop a well-thought tiered support offering, one that ideally should take into account which users are most actively contributing to SAP's own user groups and sharing knowledge on SAP's own online communities, which in turns reduces collective dependence on SAP support.

Conclusion
Ratings are fun but incredibly subjective; I hope this was an entertaining way of catching up on some of the SAP stories of the summer. Perhaps we can revisit these stories down the line and see if my assessments (or ratings) have changed. None of these stories are ready for a final verdict, so let’s see how SAP responds. In the meantime, it’s worth noting that I wrote this story right before SAP's release of its Second Quarter 2009 results on Wednesday, July 29th. Now that SAP's earnings results are out, I suspect that some of the stories I've rated are going to take a back burner for a while. But they will be back.