Posted on 11/15/2017 by Jiri Kram. 0 Comments.

I’ve received a lot of questions on this topic, so I decided to address them in a stand-alone article.

Executive summary

  1. Disrupting Salesforce in all core offerings is unrealistic
  2. I would advise SAP to focus on a defensive, not offensive, strategy
  3. SAP strengths lie in a very deep routed system that is essential for companies
  4. SAP shouldn’t play the marketing game against Salesforce because SAP is not a “cool” trendy platform and marketing will not change that
  5. SAP must understand that the power of Salesforce is in its developer community. If SAP does not open up to outside developers it will always be a closed ecosystem

 

What SAP did right

SAP HANA is a game changer

1) HANA

SAP understood the power of a well architected in-memory database and a new platform to work with data locked inside the SAP system. HANA provided a great defensive tool against Salesforce and SAP should continue to invest in it. 

2) SAP on Azure and AWS

Brilliant strategic move because SAP realized it’s too late try outspending Microsoft and Amazon on cloud infrastructure.

3) Concur

This was a very smart acquisition and getting Steve Singh and his team was very good idea. New SAP offerings like S4 finally captured what was missing – a focus on users not just on process.

4) SAPUI5

Yes, this is your very powerful weapon against Salesforce. Remember that the number one reason why companies adopted Salesforce was to create an overlay of ugly SAP screens that were not popular with users. Especially for the younger generation that doesn’t fancy grey screens with small font type and reading 700 page guide-books just to understand how to work with an app. The Facebook generation doesn’t read manuals.

 

What SAP needs to do better

SAP screen needs to improve

1) Don’t compete on marketing

The more you compete the more you lose. Why? Because SAP doesn’t have a “cult” status. SAP is a great legacy application but one without a team of fan boys and fan girls ready to defend its honour on internet forums, Twitter, LinkedIn, and elsewhere. Bill McDermott (with all due respect) is not a cult-like figure like Marc Benioff, able to rally a hundred thousand customers to his conference and make that conference seem like a rock concert. 

2) Focus on core

SAP is like a BMW. It may not be the coolest looking car in the world but it’s extremely reliable. So anyone who needs to ensure his company operates according to the right standards and that all costs are well monitored – SAP is the winner. You’ve known that for years. SAP core buyers are the CEO, CFO, and COO. Don’t lose this market because these ultimate decision makers are the ones with signing power.

3) Focus on user experience – NOW!

There are only two massively adopted applications with a totally awful user experience. One is called – Lotus Notes. Any victim, I am among them, who was “forced” to use this totally user hostile UI knows what I’m talking about. It’s designed against users not for users. Another anti-user system is SAP. Using zillions of complicated keyboard shortcuts is a nightmare for anyone who’s experienced Salesforce. So if you don’t do something about this Salesforce will continue to overlay SAP and you will become a data backend – one that can be replaced when something better comes along.

4) M&A

There is only one company that could tip the balance. I said this in June 2016 and reiterated my buy recommendation in August, you should buy Pega Systems before Oracle, Microsoft, or Salesforce. There is no one that has any chance at disrupting Salesforce. Any smaller M&A like Qlik, Tableau, Box, Dropbox, Marketo, Hubspot… etc. would have very little impact on the major Salesforce advantage over SAP – CRM. If you want to go back to CRM-wars you need to buy market share. There is only company – PEGA.

 

Conclusion

You may disagree with me or not - either way, please leave your comments below. So here is my answer as someone who spent the last 7 years competing and winning against SAP.

 


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Jiri Kram
Jiri is the founder and CEO of Silicon Wharf Consulting in London, UK. Silicon Wharf helps companies design, architect and deliver enterprise grade blockchain and Fintech solutions in the Cloud.