Tag Archives: SAP

SAP Concur Acquisition Illustrates the New Digital Business Enterprise Model 

SAP has agreed to acquire Cloud-based travel and expense management provider Concur Technologies.  When completed, the deal will be the most expensive acquisition ever for SAP, ranking above SAP’s 2010 $7.1 billion acquisition of Sybase Inc. It will also be a Top 10 all-time software or Cloud / SaaS acquisition in terms of total price paid. Concur shareholders will receive $129 per share, a 20 percent premium over Wednesday’s closing price of $107.80. The 21-year-old, Bellevue, WA-based Concur had been known to be shopping for a buyer, with most rumors indicating SAP or Oracle as the most likely acquirers. The publicly-traded firm posted fiscal-year 2013 losses of $24.4 million on revenue of $546 million.

Saugatuck’s first take is that, while buying Concur may not improve bottom-line profits immediately, SAP does get another significant stream of Cloud-driven revenue; Cloud-based providers’ revenues are growing increasingly faster than traditional software providers. SAP also adds more Cloud expertise and presence overall, especially expertise in marketing and supporting Cloud-based financial software. With 23,000 clients and 25 million users through 150 countries, SAP also gains a business transaction network similar to its 2012 acquisition of Ariba. According to SAP CEO Bill McDermott, the addition of Concur would mean Continue reading

HR, HCM, Millennials, and Red Herrings

This year’s SuccessConnect event in Las Vegas brought the release of Workforce 2020, a summary of two global research studies by Oxford Economics and sponsored by SuccessFactors parent firm SAP. Oxford Economics surveyed more than 5,400 employees and executives, and interviewed 29 executives, in 27 countries, regarding key workplace/workforce management challenges, the factors driving or enabling these, and how all would affect the composition of the typical workforce by 2020.

The Oxford study confirms that the workforce is changing rapidly and dramatically – but not in ways that most have expected. What’s most important, and challenging to managing HR – and HR systems/solutions – is not that there’s a younger workforce with different ideas coming in. In fact, the research indicates that Millennials are very much like the rest of the workforce when it comes to motivation, attitudes, compensation expectations, and more. So much has been written – and believed – about how Millennials are so different from previous generations, that such preconceptions have become a red herring, pulling our attention away from what’s really changing – and what’s really challenging HR and HCM management, solutions, and providers. Continue reading

SuccessConnect 2014: View to the Future of Digital Business

What is Happening?

At the SuccessConnect event in Las Vegas this week, Saugatuck was able to speak with more than a dozen customer attendees along with key executives from SuccessFactors and SAP, including SFSF co-founder and CTO Aaron Au, Chief Marketing Officer / SAP Cloud and Line of Business Tim Minahan, and Sven Denecken, Global VP Cloud Solutions and Co-Innovation at SAP.

Throughout all of our conversations, three key threads emerged regarding Cloud, HR solutions and strategy, and SAP itself as follows:

  • Concerns: We found it fascinating that none of our customer conversations touched on Cloud concerns – including security. No mentions were made about data security and privacy in the Cloud. Instead, discussions tended to focus on the specific, tactical concerns relative to any new software deployments, namely integration, data migration, and time to completion. This is another powerful sign that the “Cloud experiment” truly is over.
  • Strategy and Modularity: We found no one with an actual “Cloud strategy” in regards to their Cloud procurement approach. Instead, businesses are building on, enhancing and extending business processes and management with a variety of solutions. In our conversations there was no hint of a broad enterprise movement toward Cloud-based solutions exclusively. Consistent with the broader Cloud HCM segment, many customers are retaining existing systems in certain areas such Learning, Payroll, or Performance Management, while others are using the modularity to extend their on-premises core HR solutions with additional SuccessFactors Modules like Recruiting, Talent Management, and Workforce Analytics. All indications are that current SFSF customers are planning on embracing fully hybrid deployments in their HR systems, and that while complex integrations are far from being a solved problem, SFSF’s implementation partners and 3rd party integration vendors like Dell Boomi, and Informatica are able to make the complexity manageable.
  • Maturity: Our conversations with customers here at SuccessConnect, and with enterprise IT and LOB leaders globally, continue to indicate that, while nowhere near its final form and capabilities, Cloud has matured enough that its perceived and real risks are equivalent to those of most other mainstream forms of IT. That means that Cloud can be acquired and managed as would most other forms of Business IT, even as it enables and catalyzes business transformations.

In short, we’re learning to manage Cloud as it should be – a key Business IT component and catalyst. Next, and soon, we must learn to manage business change, as our Business IT continues to transform. Continue reading

The Business Problem with Big Data Analytics

What is Happening?          

Recent software analyst and IT media reports, including insights from a recent SAP Americas User Group (ASUG) survey, suggest that SAP’s HANA Big Data service / platform is not yet seen by a majority of ASUG members as benefiting their business (relative to the implementation cost of implementing), or driving enough revenue growth for SAP. SAP has, very smartly, issued a careful rebuttal explaining how, where, and why customers see value in HANA – and more importantly, offering to work with any customer to help them understand and realize business benefits from the offering and its associated apps.

We believe that, through at least 2016, this type of approach is the most effective way of getting user enterprises to understand the value of any Big Data analytics capability; i.e., develop company-specific and operationally-specific business cases in order to enable and develop business value. This is because, in most companies, Big Data analytics just can’t be widely used to deliver broad-based business benefits across the full portfolio – because user enterprises have huge challenges finding and managing their own data, let alone analyzing it. Continue reading

2014 Cloud Business Summit – The Journey to Digital Business

I am pleased to announce some of the details surrounding our fourth annual Cloud Business Summit, which will be held November 12, 2014 at The Yale Club in New York City.

Our conference theme this year is “Innovation, Opportunity, Risk and Reward,” with the event focusing on the journey that large enterprise CIOs, CTOs, and senior marketing and finance executives are on as they optimize their Cloud investments, and begin to remake their companies as Digital Businesses. For a short overview of the event, go to: http://cloudbusinesssummit.com/about-the-event.html.

We’ve moved the Summit to a new venue this year. The Yale Club of New York has a spectacular Grand Ballroom that we will be using, along with its elegant Rooftop Dining Room. Both will provide an optimal setting for the peer-level learning and interaction that are hallmarks of our events, fostering an intimate, C-level setting.

Our program / agenda is coming together nicely, with our keynotes and panels offering unique first-person experiences, insights, and best practices Continue reading

SAP SAPPHIRE NOW 2014 – 3 Takeaways

What is Happening?

Earlier this week, Saugatuck attended the SAP Sapphire NOW conference in Orlando, Florida. We value coming to the conference each year as it, like several others that we attend, provides great signposts as to the current state of business computing. This year more than 20,000 attended the event live, with thousands more accessing the keynotes remotely. In this Research Alert, we emphasize three key takeaway threads from the event: “Simplicity”, “HANA Front and Center”, and “Ariba: Key to SAP’s Future.”

Why is it Happening?

With many of the key technological foundations having already been laid, SAP is at an important juncture to begin to significantly monetize on the vision it has built over the past few years. We see the company pursuing that in the following ways: Continue reading

Look for Suites to Continue to Dominate Cloud Business Software Through 2017

Ahead of SAP’s annual SAPPHIRE event, we took a look at our research regarding buyer preferences for Cloud-based business software over the past few years. We’ve looked at this several times previously, including in our past Cloud Business Summit events, and after our 2013 global Cloud survey (1243RA, Survey Says: Single-vendor Suites Winning over Best-of-Breed and Multi-vendor (Loosely-Coupled) Cloud Solutions, 24July2013).

Given buyer and user statements and positions over the past few years about embracing “digital business,” enabling greater business flexibility and adaptability, and enabling greater business innovation, one would expect that their preferences to shift more and more toward loosely-coupled solutions that utilize Cloud platform-based middleware and other forms of integration – especially, and increasingly, APIs – to provide “good enough” interoperability that enables greater flexibility in solution and provider choice.

As this buyer/user movement grows, as the paces of business and Cloud change increase, and as more and more business software providers embrace API-driven interoperability and other forms of technological and functional integration capabilities, one would expect to see significant moves toward more diversity in the types of Cloud-based business software desired and acquired. Continue reading

SAPs Acquisition of Ariba Visibly on Track

Last night and today, Saugatuck has participated in a series of analyst briefings and one-on-one sessions (with customers and Ariba execs), as well as attending the keynote presentations at Ariba LIVE 2014. What is clear from all of the experiences is that the acquisition of Ariba by SAP appears to be paying huge dividends across many dimensions of the business.

While the 80% + bookings growth that Ariba achieved last year is a tangible signpost demonstrating solid demand for its Cloud-based procurement / sourcing / collaborative commerce solutions (and the amazing power of cross selling across the SAP client base) – in many ways, Saugatuck sees the bigger impact of this acquisition yet to come. SAP clearly views Ariba strategically, and is investing with a longer-term view – especially in regards to power of “the network.”

The range of investments is truly impressive, including functional and UX enhancements, new mobile capabilities, integration with key SAP ERP solutions, globalization and localization capabilities, and the re-platforming / leveraging of HANA across the fully array of Ariba solution Continue reading

From the Show Floor – SAP TechEd 2013

I’m lucky enough to be at my third consecutive SAP TechEd event this week, living and working among ERP providers, developers and associated geeks to gather insight and intelligence that allows me to develop reasonable vision into the hot topics and expected next steps in the SAP and ERP universe – especially as they relate to Cloud-based IT and its associated technologies: Social IT, Mobility, and Data analytics.

While the event is held in Las Vegas, what happens at TechEd never stays at TechEd. That’s because what we see here in terms of technology, interest, and activity, tends to be the leading edge of emergent enterprise business management technologies, solutions and services. Because of its SAP ERP roots, TechEd is one of several early warning systems for developments in mainstream, large enterprise IT. Continue reading

Research Alert: Cloud, Mobile, Social, Analytics – Greater Than the Sum of Its Parts

What is Happening? 

There is little doubt that the technologies and capabilities of Cloud, Mobility, Social IT and Advanced Analytics (CMSA) promise great value to user enterprises. Few enterprises of any type or size are not actively pursuing each.

And according to the latest research from Saugatuck, enterprise executives expect significant competitive value from each as well. In our Q1 global Cloud IT survey this year, we asked participants to “please indicate how important each of the following technologies are to your company’s competitiveness over the next 24 months.” Figure 1 aggregates the percentages of survey responses ranking each as “Very Important” or “Extremely Important” – rankings that have, over the years, been reliable indicators of imminent investment.

Figure 1: Ranking CMSA Competitive Value

Cloud Mobile Social and Analytics for Business Value

Source: Saugatuck Technology Inc., 1Q2013 global web survey; n = 218

CMSA is truly a simultaneously evolving set of services and capabilities, helping to change enterprise IT from a monolithic entity into sets of loosely-coupled, complementary services.

But as much value as each of these provides (or is expected to provide), even greater value is seen from combining them with each other, and with business management applications software and processes in key enterprise systems. Figure 2 summarizes our survey data regarding how business and IT leaders see combinations of Mobile, Social and Advanced Analytics with enterprise business systems as adding the greatest business value to the enterprise. The higher the percentage, the more survey participants see business value.

Figure 2: The Integrated Value of CMSA with Enterprise Business Systems

The Value of Mobile, Social, and Analytics on Business Apps

Source: Saugatuck Technology Inc., 1Q2013 global web survey; n = 218

Clearly, Cloud-based Mobile, Social, and Advanced Analytics are seen as relatively less beneficial to business when used individually (in most cases) than when used in combination with each other, and as part of enterprise business systems. In short, while Mobility, Social IT and Advanced Analytics each have intrinsic value, that value is typically multiplied with coordinated use.

Why is it Happening? 

With past IT architectures, single or serial evolutionary trends tended to define the evolution, and IT became more and more focused on (obsessed with?) tightly-integrated technologies and systems. This grew through the almost manic progression of 1990s-era distributed and client-server architectures, which brought increased scrutiny on IT costs, resulting in edicts to standardize and integrate, which in turn led to a renewed emphasis on tightly-coupled architectures and technologies.

What makes the combination of CMSA different is that buyers, users, and increasingly some IT leaders are starting to see the potential value and utility of systems, technologies, and business operations that are only loosely-coupled and not tightly integrated. Integration is readily available and reasonably affordable in the form of Cloud-delivered services that alleviate many requirements for tightly-coupled technologies and systems. Cloud Integration services also expand the choice for building out certain capabilities beyond the traditional vendors of complicated, pre-built solutions and heavy customization, toward building a functional alternative from a variety of better suited products from different vendors without the tight coupling at their core.

The high value of Analytics, both alone and when combined with other capabilities and systems, is easy to understand, as the ability to better analyze and then utilize business data has long been a goal of IT and business leaders. In short Analytics almost intrinsically adds value everywhere. Mobility enables greater reach and utility of most business systems; and Social IT enables improved collaboration, which in turn adds value by improving group and resource communication and coordination. And with Cloud, they can often be added, used, and removed as needed –an additional value from the inherent flexibility of loosely-coupled, Cloud-based services.

Finally, more CMSA offerings are being architected with multiple, often open, standards-based interfaces that enable them to work with a wider array of business systems and data. They are enabling Mobile, Social and Analytics capabilities that recently cost significant amounts of additional money when included with traditional software (and didn’t always work as well as needed or expected). Buyers have wanted some combinations of these capabilities for years; making them available cheaply via Cloud has accelerated and expanded their adoption and use.

Market Impact 

By YE 2017, the inclusion of Cloud-based Mobile, Social and Analytics capabilities will be considered de rigueur and required by the majority of IT buyers and users. SaaS and BPaaS provider understand this, and are scrambling to engineer, integrate or embed an increasing range of such capabilities with their offerings.

Most will utilize capabilities from such providers as Dell Boomi, IBM CastIron, Informatica, MuleSoft, Pentaho, etc. These and other Cloud-based integration-as-a-service platform providers (“iPaaS”) are already, rapidly, pursuing BPaaS, SaaS, and other PaaS providers to embed a wide range of integration capabilities into business process services and solutions. So we believe that the loosely-coupled advantages of CMSA will only continue to grow. There will be no shortage of established and upstart providers serving enterprises and Cloud-based business solution providers alike.

Large-scale business management solution providers (e.g., Microsoft, Oracle, SAP) will be pressured to add more data and workflow integration capabilities and APIs to their core Cloud platforms; their traditional preferences for in-house “standards” will decrease as more buyers and users come to accept, then expect, the loosely-coupled IT and business reality of the Boundary-free Enterprise™.

This loosely-coupled future also helps to bring clarity and certainty to the roles of traditional SIs and enterprise IT departments. The proliferation of services and providers will mean increased roles, and increased need for skills, as enterprise users force the growth of a variety of hybridized IT and business environments, utilizing a changing array of Cloud-based offerings that need to work with other Cloud-based and on-premises systems. There will be new, different, and more skills required, and roles will continue to adapt, but there will be no shortage of need for skilled and experienced IT professionals in a world replete with ever-changing, dynamically-utilized IT.

More detailed analysis of this and much more data from Saugatuck’s 2013 Cloud IT survey will be published for Saugatuck CRS clients beginning the last week of June, including a series of research analyses and data reports.