SAP: ‘We Are Way Too Complex’

BillMcDermottThe underlying theme of SAP’s massive annual show SapphireNow in Orlando, Fla. this week was simplicity, or SAP’s lack thereof.

CEO Bill McDermott heralded the dream of enabling the enterprise software company to “Run Simple,” while acknowledging the company’s skeptics.

“Yes, I do realize there will be some of you, especially the pundits, who say we can’t,” he said. McDermott is now sole CEO of the 67,000-person-strong German enterprise software company following May’s co-CEO phase-out and the departure of the company’s executive board member and product guru Vishal Sikka.

McDermott, however, acknowledged that those criticizing SAP’s complexity had “a fair point.”

“A big company should not be structured like an onion,” he explained. “This is what creates the gap between strategy and execution.” SAP now finds itself in an environment that’s more competitive than ever. Within marketing tech, SAP finds itself against powerhouses like Adobe,, Oracle and IBM.

Additionally, Google and AOL with their respective acquisitions of attribution vendors Adometry and Convertro, are pushing into the enterprise analytics space that SAP once owned. It’s obvious the stakes are high for a company with a supply chain and process-heavy past.

To show its readiness to engage in data-driven marketing tech, SAP paraded a number of brands from Porsche to Italian eyewear house Luxottica onstage at the user show. Each shared stories of enterprise commerce, customer engagement and marketing transformation within their respective organizations.

“Five years ago, our IT and marketing teams were not collaborating and our customer engagement and marketing campaigns were mass mail,” said Stephen McKinnon, CIO of Luxottica Retail Asia Pacific. “We now measure business back to the store level, which draws a line right back to marketing and sales.”

Although Luxottica had built what McKinnon described as a “huge customer database,” it contained mostly transactional data, with very little behavioral data. Luxottica used to “market to a budget,” but now that the brand is looking to do far more targeted campaigns, “our budget is actually increasing.” Notably, SAP acquired behavioral marketing technology company SeeWhy, which helps ecommerce companies get a handle on behavioral signals.

“We want to build that consistent data capability around ‘customer data management,’” said Brian Walker, chief strategy officer for SAP hybris, SAP’s commerce platform, which will be the first SeeWhy integration point. “We are taking a much more strategic view of what an enterprise needs and what a marketer needs.”

SAP seemed to step away from its positioning in the CRM space, instead pushing its new Customer Engagement and Commerce platform, consisting of hybris, SeeWhy, its partner integration to Adobe Marketing Cloud and customer intelligence tools such as Audience Discovery and Targeting. “E-commerce” is too narrow a term to describe the in-store and mobile features the company is building and “CRM” doesn’t adequately depict all SAP is doing with data-driven marketing and commerce, Walker noted.

But is all of this enough to make SAP competitive? Ray Wang, chairman and principal analyst for Constellation Research, is wary.

While the company didn’t reveal any plans to build, acquire, or partner to strengthen its stack, “many believe that SAP has not successfully rolled out enough applications or platforms that customers want to purchase,” noted Wang. “SAP will have no choice but to make more acquisitions in areas where customers have been pursuing a surround SAP strategy.”


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