SAP has some explaining to do at Sapphire

SAP needs to deliver more than hype about new products at the user conference, customers and analysts say

While SAP has spent the past year spinning a vision for on-premises, on-demand and on-device computing, its upcoming Sapphire conference is an opportunity for the vendor to lay out some important specifics on these plans for the thousands expected to attend.

SAP also needs to avoid giving short shrift to the concerns of customers still reeling from the effects of the economic downturn, who are more interested in getting greater value from their current SAP investment than shelling out cash they don't have for the latest and greatest.

Here's a look at some key topics to be broached and questions to be answered at Sapphire, which kicks off next week in Orlando.

The move to mobile apps

One of the biggest announcements expected at Sapphire concerns a converged mobile-application development platform composed of SAP technology and the tools and middleware it gained through the acquisition of Sybase last year.

There's no question SAP's customer base is clamoring for mobile applications, but the company needs to tell them the best way to plan their purchases and projects, said Kevin Benedict, CEO of Netcentric Strategies, a consulting firm focused on enterprise mobility.

"I believe they are attempting to do that," he said. "In the past it was challenging because they were a little bit unfamiliar with mobility."

There are a number of specific categories for enterprise mobile applications, each with their own technical demands, he said.

One includes more complex applications that can also run in offline scenarios, Benedict said.

The "container" approach sees applications written in HTML5 code that dynamically reorient themselves for various devices' screens.

And some companies might be satisfied with simply setting up a mobile website that users can access on any sort of smartphone.

"Each of those have [their] own product stack and methodology that goes along with it," Benedict said. "In the past [SAP] didn't even know what to say, so I hope they spent the last year learning that and developing these buying-decision learning trees, so people can decide what might be a prudent place to start."

SAP is not trying to do mobility on its own. The company is "very aggressively" recruiting partners to build applications for its mobile platform, according to Benedict. Sapphire showgoers should expect quite a few to be showcased, "because it shows things work, and shows platform acceptance and success," he said.

Making sense of SAP's SaaS (software-as-a-service) strategy

SAP is using a two-fold approach for on-demand ERP (enterprise resource planning) software, and has taken some time to figure out the strategy.

After some fits and starts, its Business ByDesign suite for midmarket companies and divisions of larger ones is ready to be sold at scale. SAP expects to have 1,000 customers on it by year's end.

SAP should and probably will deliver strong Business ByDesign customer stories at the show, said Jon Reed, an independent analyst who closely tracks the company. This will give attendees a better sense of the software's stability and potential benefit to their businesses.

But the big money remains in SAP's on-premises ERP systems, which run many of the world's largest companies and aren't going anywhere anytime soon. SAP has started rolling out a series of specialized SaaS applications, including the CRM (customer relationship management)-themed Sales on Demand, that it is positioning as extensions to on-premise implementations.

At Sapphire, SAP needs to offer customers more clarity on when and how the software should be adopted, and pricing information wouldn't be a bad thing either, said Forrester Research analyst China Martens.

But SAP shops might also wonder where the divide is between what these extensions do and the features gained through regular product upgrades, for which they already pay handsome annual fees. It will be up to SAP to start making that distinction.

Hullabaloo about HANA

If SAP CTO and executive board member Vishal Sikka has a favorite topic these days, it's the in-memory database technology that powers SAP's new HANA (High Performance Analytic Appliance).

Sikka and other SAP executives have exercised little restraint in touting HANA's performance and cost advantages over other databases. But the product remains in its infancy, and a series of specialized analytic applications that will run on top of it are only now starting to be released.

"I'm hoping they do a good job of forecasting the road map [for HANA], and take the hype out of it," said Bridgette Chambers, CEO of the Americas' SAP Users Group (ASUG), which is co-locating its conference at Sapphire. Chambers especially wants SAP to show how customers will be able to save money with the technology.

SAP may also use Sapphire to discuss its broader database plans, given the additional products it gained through the Sybase acquisition.

For one, the company is expected to eventually port the Business Suite to Sybase ASE (Adaptive Server Enterprise), a move that could potentially save significant money for customers now running Oracle. Sapphire show-goers might receive a sneak peek of this scenario as well as HANA running the Business Suite, although the latter seems less likely.

What about the installed base?

As with any software vendor, sometimes it seems like user event keynotes, with their emphasis on new and upcoming products and strategies, resonate most with the media, analysts and the customers who are the most aggressive about new product adoption.

"There are a lot of SAP customers who are a lot more cautious about what they're rolling out, and they're not even on the latest release," Reed said. "Will they have news that speaks to the installed base, and that doesn't involve opening their wallet to a lot of new initiatives?"

This group is "sensitive to having hype-y stuff foisted on them, especially stuff that's not included in their licenses," he added.

Chambers echoed the idea.

"There's a place for all that," she said. "You've got to have a platform, a stage for telling people why you're going to be relevant tomorrow. But they've got customers that invest millions of dollars in their software. It's important that they balance it with a connection to today."

For one, SAP would be wise to give some attention to its enhancement pack strategy for the Business Suite, Reed said.

The packs were intended as a way for customers to get new functionality without the pain of a full upgrade, but in reality the process hasn't been smooth, and the packs themselves have experienced delays. Therefore, good news about the enhancement pack would likely go over well with the Sapphire crowd.

Meanwhile, uproar over SAP's controversial move a few years ago to raise support fees has largely died down thanks to the passage of time and some eventual concessions by the company, including the restoration of a standard support option.

But the trade-off was that SAP scrapped an initial plan to produce KPIs (key performance indicators) proving the value of its upgraded, more expensive Enterprise Support.

In January 2010, an SAP executive told IDG News Service that the goal was to "evolve" the KPI program into something useful but less time-consuming for customers involved in it. Sapphire may be a good place for SAP to update the crowd on where those plans lie today.

ASUG is planning to focus on core issues at Sapphire. The group is launching a new initiative at Sapphire aimed at helping customers get continual return on investment for their implementations.

"Many customers go through technical upgrades and don't adopt everything," said Chairman Anthony Bosco, who is also CIO of the services firm Day & Zimmerman. "If you were to implement your system today based on what you know now, you probably would have a lot more turned on."

For companies with a mature SAP platform, "it's a good time to optimize," he said.

Wild cards

-- Some will be searching for signs of friction between co-CEOs Jim Hagemann Snabe and Bill McDermott. The two have split focuses, with Snabe closer to product development and McDermott overseeing sales. That hasn't stopped rumors of power-jockeying, although actual public evidence of such is pretty scant.

-- In a related note, the profile of CTO and executive board member Vishal Sikka at the conference will also be scrutinized.

Sikka, who has been referred to as SAP's "third CEO," recently told IDG News Service that while he is very close with the CEOs, he considers his boss to be company founder Hasso Plattner, and that Snabe and McDermott "basically leave [him] alone."

That kind of comment and the fact that Plattner and Sikka are scheduled to deliver a keynote address together at Sapphire will no doubt have speculative tongues wagging about the balance of power at SAP.

-- Oracle CEO Larry Ellison has made a tradition out of pulling a surprise guest onstage during his annual OpenWorld keynote. The list of luminaries has included Billy Joel and Arnold Schwarzenegger. SAP has booked rock icon Sting to entertain Sapphire-goers, but most likely he'll stick to the concert stage.

This leaves an opening for someone more aligned with SAP's core business, and who better than Hewlett-Packard CEO Leo Apotheker?

Sure, Apotheker was forced out as SAP CEO by the company's board last year, leading to the ascendance of McDermott and Snabe, so there might be some lingering tension there. But SAP and HP have always been tight partners -- a bond that is only closer now given Oracle's entrance into the hardware business -- so anything is possible.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is

Copyright © 2011 IDG Communications, Inc.

It’s time to break the ChatGPT habit
Shop Tech Products at Amazon