SAP co-CEO Bill McDermott explains its five-market focus

Mobility, analytics, Big Data, applications and the cloud

If you think SAP equals ERP, Bill McDermott would like a few minutes to set you straight about the 2012 version of the software giant, which he claims is in the midst of "an intellectual renewal." McDermott has been co-CEO -- along with Jim Hagemann Snabe -- of SAP since 2010 and has helped broaden the company's strategy beyond traditional applications and analytics to the cloud, mobile, Big Data and a bet-the-business focus on real-time computing with the HANA in-memory database at the forefront.

In this installment of the IDG Enterprise CEO Interview Series, McDermott spoke to Computerworld Senior Editor Patrick Thibodeau and IDG Enterprise Chief Content Officer John Gallant about SAP's slow start in the cloud market -- which ramped up dramatically with the $3.4 billion acquisition of SuccessFactors -- its efforts to take database share from rival Oracle and how HANA changes everything. McDermott also discussed why having two CEOs -- which has sometimes been a recipe for disaster in the business world -- works uniquely well for SAP.

One of the key goals of the CEO Interview Series is to ensure that IT leaders understand in depth the strategies of key tech companies. So let's begin with your perspective on SAP's strategy, where SAP is going and how that differs from some of the major competitors that you face.

We see a five-market focus for SAP. When we put together the strategy in February 2010, we looked at the areas that were going to grow the fastest and were going to matter the most to the world, and we formed a vision to make the world run better and improve people's lives. We saw mobility as being an unstoppable force, [so] giving the customer a platform where they can run their applications in a secure environment, where you can manage the devices, but also manage processes -- people to people, company to company -- using mobility.

The second one was analytics. There are the day-to-day applications with embedded analytics and nice visuals -- and obviously that ties into the mobile -- but analytics keeps growing because people want insight into the business. Whether it's a department leader or a CEO, everybody wants to know what's happening. We continue to be the leader in analytics and to invest in analytics. We just released a new platform for analytics and we're excited about that.

The third thing is this idea of Big Data. Everybody talks about Big Data because it's doubling every 18 months -- the 'Internet of things', the sensors that are out there, the various structured and unstructured ways that data is being captured. It's just an explosion. There are also regulatory issues around data that are going to create even more significant demands for managing data the right way, which is in real time. Our alternative out there in the marketplace has a lot of legacy databases, a lot of complex infrastructure. They rely on hardware, they rely on services and they rely on these "disk-based database systems" to support their business model, which is the business model they're stuck with. We're not stuck there, so we could go for main memory or in-memory computing, and that was the idea and the innovation behind HANA. We decided to double down on our invention called HANA and now we're ratcheting up the focus because it's running 100,000 times faster. Not 10 times or 20 times, 100,000 times faster than any alternative in the market. That's a combination between the way the data is compressed and how the data is processed in columns versus rows.

The other piece is applications. Our core business is still business applications. We want to get even better at that, writing extreme applications, meaning we're solving really difficult problems with HANA applications, mobile, etc. We call these extreme applications. For example, we have several thousand business warehouse customers that will transition now to HANA. That is one example of changing the game from a business warehouse and a lot of database infrastructure around it to putting it all on HANA, increasing the clock speed and giving the customer a better value back. There'll be other applications. For example, a sales leader might want to recast their coverage strategy, maybe go more indirect or Internet-based direct sales and they want to factor in -- in real time -- what would it mean if I made those changes to my geographic coverage model, my market segmentation, with real analytics? No other company in the world can do that. We can.

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