SAP Watch

Mar 18 2008   10:28AM GMT SAP hasn’t innovated

JackDanahy Jack Danahy Profile: JackDanahy

According to Marc Benioff, CEO of, SAP has “not seen innovation in the last 10 years.” Those comments were made in a recent interview with ZDNet, in which Benioff twice claimed that SAP has not been responsible for creating anything “unique to the industry or value-added technology.” This comment was particularly provocative because Benioff seems to believe that has been responsible for e-business innovation in a way that SAP has not. The logical response to that assertion is that, whatever the case with SAP may be, is not an innovator either. Siebel tried hosted CRM before, and the AppExchange is manifestly indebted to the iTunes and eBay B2C models.’s key innovation has actually been its marketing strategy, which has caused to become the company most commonly associated with the hosted/on demand paradigms despite the fact that other companies got there first. Sure, got the execution and marketing right, but this still doesn’t constitute the kind of disruptive innovation that Benioff wants to claim for himself and deny to SAP.

SAP, meanwhile, pursues innovation through not only its regional labs, which may commit as much of 10-15 percent of their resources to investigating emergent technologies, but also through the SAP Innovation Institute, which reaches out to universities and executives to collaborate on emerging technology and business trends. Much of SAP’s innovation is on the business process front, as the company assimilates process flows into the core platform. Business process change is not as sexy as the debut of a fancy Web 2.0 tool, and the daily grind of development represents more of an incremental than a game-changing innovation, but it’s none the less important for all that.

Benioff states, “I have a hard time thinking about what SAP is going to be known for at the end of the day.” This comment demonstrates the guerrilla marketing culture in action; it signals the importance Benioff places on an e-business company to be “known” for something rather than, for example, to do something quietly well.

To read what SAP thinks about’s model, read our interview with SAP’s Zia Yusuf.

Demir Barlas, Site Editor

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  • Ken
    Demir, While I do understand your position (or rather SAP's) relative to and Web 2.0, I think you are missing one very key point: the end game for companies is how much more easier can they sell their products. REVENUE IS KING. If a sales or channel manager can go out to SFDC and (with a credit card) get an application that helps him close deals sooner, why would he attempt to venture down the traditionally long process of bringing in another enterprise system? That isn't to say that the virtues of a completely integrated system like SAP should be overlooked. It's just that I don't see SAP making a real commitment of providing Mash-Up capabilities with other applications like SFDC. Oh yeah, there's Netweaver, but it is my experience, and the opinions of others (Seeberger, iWay, Microsoft), that NW is good for SAP to SAP NOT SAP to Non-SAP. I think the best example came at last year's 2007 Configuration Workgroup conference in Salzburg. An SAP user was confounded on how to get his indirect channel partners to get opportunities and customer order needs into their SAP system. The unanimous response was to make the channel partners use SAP CRM. Now here is the question: Who's going to pay for that? The moral of the story is get SAP to open itself up so developers in other systems can drop in an SAP web part as easy as any other VB object. Just my thoughts Ken Noll Cincom Systems, Inc. (SAP ISV partner)
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  • Demir Barlas
    Hi Ken, Thanks for this conscientious and thought-provoking comment. This is an ongoing debate, and I really welcome your perspective. Everyone else following this discussion should feel free to chime in. Best, Demir Barlas, Site Editor
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