SAP Watch

Feb 19 2008   5:53PM GMT

Looking Back at SAP

JackDanahy Jack Danahy Profile: JackDanahy

Resident SAP Careers Expert Jon Reed wants to know how I think SAP has changed since the late 1990s, when I began to cover the company. This is my attempt at a brief but hopefully meaningful answer isolating three key areas that I find important.

ERP Direction: Staying the Course

I remember how much pressure there was on SAP, from at least 1998 to early 2003, to change its DNA. In the early part of that period, a lot of people — including analysts, investors, and journalists — pressured SAP to make an accommodation for the e-marketplace model that was so hot at the time. Then, after 2000, SAP was increasingly browbeaten to put greater emphasis on CRM. SAP didn’t really listen. Sure, there were bones tossed to the crowd — remember SAPMarkets? — but on the whole, the company went forward on the strength of its own ERP suite-based convictions, not the voice of the multitude, which at one point considered both ERP and suites passé.

Not listening earned SAP a reputation for being stubborn and maladaptive. In retrospect, however, the company was justified in not betting the farm on marketplaces. As for CRM, SAP refused to hurry the decision to enter the domain. The jury’s still out on whether delaying the move into CRM was the right move — I for one believe that, if SAP was willing to buy a portals company like TopTier, it should also have been willing to invest in a leading CRM company — but it’s by no means an easy call.

The bottom line is that SAP did not succumb to the exhilarating atmosphere of the dot-com era; it remained unchanged in this important respect, at a time during which it could easily have gone in another direction.

More Globalization: The World Outside Walldorf

SAP started to get heavily involved in India towards the end of the 1990s, and since has demonstrated a deepening commitment to that country [editor’s note: I am working on an upcoming “SAP in India” feature that will explore this history and examine the future prospects for SAP in the Subcontinent]. India is now teeming with SAP developers, process experts, and customers. SAP engineers in India are responsible for much of the work on core SAP products that are used all over the world, representing a globalization of SAP’s German roots that began during the late 1990s and continues today.

In addition to India, SAP Labs sprung up all over the world. Israel, for example, became an important development center and was also the home of Shai Agassi, the CEO of portals company TopTier, which SAP acquired in 2001. Shai was a quiet but confident leader who came close to becoming SAP’s CEO in 2007. Had that happened, I think SAP would have altered perceptions that it is not so much global as German. But in any case, all the globalization that has taken place after the late 1990s has already moved SAP into closer contact with the world outside Walldorf.

CRM: A Taste of Things to Come?

I think that SAP moving into CRM is more important for what it might say about the future of SAP than for the CRM marketplace itself. That’s because, for the last couple of years, CRM has been the site of a great deal of e-business experimentation, collaboration, and user-generated functionality. B2B CRM is getting very close to consumer-flavored Web 2.0, and Web 2.0 is the last thing that comes to my mind when I think about SAP. So I feel that, by entering CRM, SAP is at least conceptually associating itself with the wild and woolly world of Web 2.0. I would never have imagined that SAP would even be adjacent to Web 2.0, and I am dying of curiosity to learn whether, through some back door, Web 2.0 will actually wend its way into the SAP vision. If it takes place, that would be one of the most momentous changes in SAP’s history!

Demir Barlas
Site Editor

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  • Sanjay
    Very interesting article. If the chatter among the SAP lab folks is any indication then it won't be surprising that web 2.0 in SAP becomes a reality soon, the debate is more focused on relevance of social networking in workplace e.g. whether or not tweeter adds to productivity or it acts more as distraction specially with limitations on filtering. From technology perspective I would imagine that SAP has already come to terms with the fact that core solution that was once confined to four walls will only go so far in the changed world and must openly communicate with rest of the industry products/platforms.
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