SAP shines at Sapphire as bold leadership changes pay off
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German software giant SAP has now produced quarter upon quarter of positive financial results, with the business appearing to go from strength to strength.
At the firm's annual customer event Sapphire this year SAP executives were clear on the direction the business was heading. In fact in this year's press and analyst briefing with SAP co-chief executive Jim Hagemann Snabe, there was not one question that appeared to falter him or SAP's delivery plans.
SAP's big data analytics database HANA, now has 600 customers. This is a big jump from the 10 HANA customers the firm had last year, especially considering the relative immaturity of the big data analytics market. The analyst scepticism that once accompanied the launch of HANA has dissipated.
Questions that analysts asked once on whether HANA really existed, and then whether it could be sold to customers at a reasonable price point, have filtered out.
According to the customers listed by SAP at Sapphire this year using HANA, including a small gaming start-up and a concrete mixing company, the product is a success.
These customers also demonstrate that it is not only the largest, most profitable companies in the world that can afford to use HANA (SAP has refused to reveal the price point at which it is selling the software).
It is possible that the scepticism that surrounded HANA's launch emerged because analysts were accustomed to doubting SAP. It was not long ago that the firm was struggling to make headway in the cloud computing market.
And these struggles were actually far from unusual. While many software firms seem to easily latch on to the mobile and social trends sweeping the market, the cloud has induced hiccups in SAP as well as many of its competitors.
Five years ago, no one commended SAP on its ambitious plans when it came to the cloud. SAP had accepted the new architecture of computing long before the likes of Oracle and Microsoft, who famously ignored the trend for as long as financially possible. However SAP's forward thinking backfired when it could not deliver on its cloud vision.
The launch of SAP Business ByDesign in 2007 was the firm's attempt to develop its own cloud enterprise resource planning business suite. However the great plans flopped and SAP was forced to acknowledge problems with the architecture of Business ByDesign, problems that meant SAP could not afford to host the suite.
In 2009, the firm still only had 40 customers running the platform. An SAP User Group survey of customers found them to be confused by SAP's cloud roadmap, while more than a quarter of SAP customers could not even able to identify SAP's cloud computing offerings.
The cloud became a bit of an embarrassing topic for SAP. And 2009 was an altogether disastrous year, with rounds of poor financial results, dwindling customer satisfaction due to increasing enterprise support costs, a lack of company direction. Even staff voiced their disappointed with SAP's leadership.
But then things suddenly changed. SAP announced new leaders following the departure of former executives, including chief executive Leo Apotheker, chief operating officer Erwin Gunst and board member John Schwarz. SAP also took out a loan and bought Sybase, which allowed the firm to ramp up its mobile offerings, and launch a new wave of competition against Oracle's database offerings.
While 2010 was SAP's year for mobile, the last couple of years have seen SAP take charge of the cloud. SAP has acquired two cloud businesses, talent management software firm SuccessFactors and e-commerce firm Ariba. This has allowed the firm to slowly extend its cloud portfolio.
This May, SAP launched a host of new cloud computing applications, and established a new cloud business unit, to comprise 5,000 staff, that will focus on designing and delivering cloud solutions.
At SAP Sapphire this year the message was clear, the firm plans to launch more of such cloud business applications, continue to support new mobile platforms, and slowly move all of its enterprises resource planning software to run on the HANA platform - the most difficult task of the three.
Meanwhile the firm announced its Jam social collaboration platform now has a whopping 85,000 users.
For the first time in the last five years, SAP seems fully in control of its message, and is leading the software market. Customers, partners and analysts appear to have faith in the firm to deliver and they clearly understand where it's heading. The question I ask now is, what next?