SAP retools research strategy; now focused on internal startups
The switch, phased in over recent months, aims to help SAP bring viable new products to market faster
IDG News Service - SAP has turned heads in recent years with a number of high-profile acquisitions, scooping up SuccessFactors, Sybase and Ariba for more than $13 billion collectively. But company executives also maintain they intend to increase revenues through aggressive organic growth.
That plan means SAP will need lots of commercially successful new products. Under the leadership of Jason Yotopoulos, executive vice president of global research and business incubation, SAP has created a system where new ideas can be tested and developed with a startup's entrepreneurial flair.
SAP is looking to create internal startups that could result in $200 million in revenue within three to five years, Yotopoulos said. These businesses are meant to pursue ideas that are either adjacent to a market SAP is already in, or things that typically "in a large company go against the grain," he added.
SAP is also hiring "the best entrepreneurs from inside and outside the company" to build teams in support of the ideas, he said. "In many cases, these people have learned the hard way on someone else's nickel what works and what doesn't."
Each effort is funded much like a typical startup, beginning with a seed round followed by additional stages, with the primary difference being that SAP is the sole investor. This provides an advantage, since the entrepreneurs SAP brings in to run the startups aren't as distracted by the need to raise funds.
Not every project makes it, according to Yotopoulos; some are killed "if the market opportunity does not manifest itself."
About 200 research and incubation projects are now underway at SAP, according to a spokesman.
Ideas that show initial promise end up moving on to iterative testing with SAP customers, gaining refinement and direction. Eventually, the most promising ones are turned into products.
""There are some research organizations that work in an ivory tower. That's not the case here," Yotopoulos said. "Our objective is to fuel SAP's organic growth engine, getting in early, validating [ideas] and handing them off."
One effort that made it through to commercial viability was led by Allen Bannon, who is now SAP's vice president of solution management for virtualization and cloud.
Bannon came to SAP after stints at JRockit and Symantec. He also founded an application performance management company called Acsera that was later renamed ClearApp and acquired by Oracle in 2008.
Bannon was planning to do another startup focused on virtualization when he met with Yotopoulos, who convinced him to take a job with SAP. Over the next few years, Bannon's project worked its way through the incubation process and this year became a commercial product called SAP NetWeaver Landscape Virtualization Management.
- The Brave New World of Customer-Centric Manufacturing The Unique Opportunity for Manufacturers to Better Understand their Consumers
- See the Possibilities Utilizing Data Visualization Do you simply want to collect data, or do you want to derive business insights from it? What if you could quickly and...
- The Future of IT: A Customer First Approach Explore how customer-first policies can make use of social, mobile and cloud technologies to give workers the freedom and flexibility they desire to...
- Aberdeen Group: Marketing Analytics for Manufacturing: Forging Customer Insights There are no recalls for poor marketing. Manufacturers need to get their customer intelligence and messaging right the first time. Learn how.
- Bringing software licenses into compliance A hospital group received a software license audit, so they called in CDW to help define and manage their software licensing status.
- Software license renewal solutions that insure compliance A large design group with a software license renewal challenge employs a software asset management (SAM) tool from CDW to insure compliance. All IT Industry White Papers | Webcasts