Wang assesses SAP’s current strategy

By Nathan Luck

In a recent interview with ISAP, Ray Wang, principal analyst and CEO at Constellation Research Group and author of the popular enterprise software blog A software insiders point of view, discussed the current status and short-term future for SAP.

Wang believes SAP is better positioned to compete in the new market than it was 12 months ago, due to its performance “innovating on the edges”, especially in the five key areas defining “the consumerisation of IT” – social, mobile, cloud, analytics and unified communications.

“SAP has been spending a lot of time talking about HANA, talking about their on-demand strategy and focusing on what’s happening with a lot of the BusinessObjects assets,” Wang said.

“Mobility is an undercurrent, which is another part of the story. [SAP has] gotten rid of mobile BI, and they’ve been focused now on delivering key capabilities in the Sybase Unwired platform. Mobility is all about Sybase, so how do you get the full information out of your old SAP system and build an application in Sybase so that you can secure it and manage it on a global device.”

Wang said SAP is also very active in advanced analytics, showing the reporting capabilities of BusinessObjects, as well as how these can be supported by HANA’s in-memory capabilities.

“The whole point is having these real-time in-memory databases which give you the ability to access information quickly to get to these ‘right time’ or ‘near time’ applications. These are key because things are moving so quickly and we have so much data, what we now have to do is figure out how to make that data work,” he said.

The fifth key area – unified communications – is an area SAP isn’t really concentrating on at this time, according to Wang.

“What’s happening in the social business, that’s not one that SAP is completely addressing. They are doing some level of collaboration in sales on demand – that’s a big hot topic at the moment – and so for them it’s about maximising people’s attention on the web 2.0 qualities of the new UI.”

What does Wang see as the short-term future for SAP?

“We are trying to understand how they are improving their development capabilities outside of Waldorf, because the future is sitting in China, India and the Israeli developments. So a big part of what they are also learning how to do is take advantage of that talent.”

Wang said across the board, established software companies are discovering that the core developers and individuals aren’t as innovative as they need to be because they’ve been managing the core, and so they are also trying to find ways to revitalise what’s happening at the company’s headquarters.

As far as SAP is concerned, he believes the company has evolved significantly in recent times: “It’s not your old SAP,” he said. “They are doing better than they were before. In general things have improved. Financially, they’ve got research and development teams more into line, so they have done a good job with that. We are starting to see better alignment of who they are in terms of the product and where they want to go.”

Wang suggested SAP’s innovation strategy is on the money, with a general market recognition that the core ERP base is pretty solid at the moment. He said that while the market indicates companies aren’t performing major upgrades right at this time, they are still seeking innovation around the edges.

“Basically for SAP, they are trying to pitch-sell more business analytics and they are trying to get everyone to start thinking about HANA – they are just setting the stage,” he said.

Ray Wang will be speaking at Powerful Connections: SAUG Summit 2011 in Sydney, to be held 2-4 August. Visit for more information and to register.

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