SAP CEO Resigns – Long Live The Co-CEOs

SAP changes its board structure to focus again on product and technology

2009 was a tough year for the whole IT industry but SAP’s performance (-8% in total revenue and -28% in software revenue) was somewhat below the results of many other leading IT companies. The product launch of Business ByDesign is years delayed and clients are still unhappy about the way the new Enterprise Support was introduced. No question, SAP is currently in a difficult situation. At this point SAP announced yesterday that CEO Léo Apotheker’s contract will not be renewed and his resignation is effective immediately. In his place, the company appointed the two board members Jim Hagemann Snabe, responsible for product development and Bill McDermott, in charge of field operations, as co-CEOs.

After 20 years of service with SAP it would not be fair to blame Apotheker, who was certainly instrumental for SAP’s tremendous growth in the past, for the challenges SAP is currently facing. Over several years the company shifted from its traditional strengths, such as products, technology, quality and reliability to a strongly sales driven entity. In fact the whole board of SAP was slowly replaced by a team of pure sales professionals. Product innovation and quality, or customer satisfaction was no longer in the center of corporate strategy, but replaced by sales performance and quotas. In a press and analyst call today Hasso Plattner, Co-Founder of SAP and Chairman of the Supervisory Board, acknowledged that mistakes e.g. with Enterprise Support, were made, but the whole SAP board was involved and it was not Apotheker’s fault.

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What’s The Price Of Software Tomorrow?

Traditional Software Licensing Comes To An End 

Cloud computing, on-demand solutions, subscription fees… software licensing is undergoing significant changes. Enforced by the current economic crises with tight IT budgets, companies don’t have the money to pay upfront licenses and are reluctant to take financial risks over many years when purchasing software. A key factor of the current growth of cloud computing is its financial benefits: no capital expenditures, no upfront financial risk, no depreciation and nothing on the balance sheet! But pay-by-use licensing models are not necessarily limited to cloud deployment models and can be applied to more traditional implementations as well.

Traditional software licensing with upfront payments has served vendors well over the last 40 years. However, over time vendors had to face significant disadvantages as well. The pressure to successfully close quarter by quarter and the fiscal year has led to a common practice by customers to push decisions until year end for a special deal. Discounts up to 80% became not uncommon in the software business. Another problem is the revenue volatility in difficult economic times. In 2009 many software companies had to face a decline in new license revenues of 10 to 25%. Without the constant stream of maintenance revenues many software companies would be facing severe financial problems today.

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SAP Is Skydiving Into The Clouds

A brief reflection from the SAP Influencer Summit on SAP’s On-Demand strategy

 

At the SAP Influencer Summit in Boston Dec 8/9, SAP put a lot of emphasis on its new roadmap into cloud computing and how serious the company is taking the topic for its future success. Well, to be true SAP actually avoided the term ‘cloud’ almost entirely and talked about ‘on-demand’ solutions instead. Maybe the company stayed away from the term ‘cloud’ because there is still a lot of confusion in the market (or inside SAP?) what cloud computing actually is, or to simply differentiate from the masses that currently go ‘crazy in the cloud’. Anyways, to offer pay-by-use software applications via self-service over the web indeed is pure cloud computing and SAP has declared it to be a future focus area for the company when Jim Snabe said “… significant [SAP] investment into on-demand will disrupt the market and SAP will regain leadership in this space”.

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What recent acquisitions mean to SAP?

Dali-elephantsHow Many Legs Does An Elephant Need?

 

While Oracle’s acquisition of Sun Microsystems is still pending there has been a lot of speculation about which IT giant will take the next big acquisition step in response.

 

Is there a rule of cause & effect that fuels the spiral of acquisitions?

 

·         Know your enemy and know yourself

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Predictive Analytics is for Experts only! - Really?

You don’t need to be a scientist to boost your business with applied mathematics

On 22/9/09 SPSS Inc. announced a new certification process to confirm an individual’s expertise with some of their statistical solutions. “Look at this”, I thought “sophisticated software still requires experts to unfold the value they can provide”. Being a physicist by background, I like it how applied mathematics can improve business. However, not everyone sees beauty in algorithms or is interested in statistics.

 

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The Rise Of The Collaborative Cloud

Salesforce.com announces Service Cloud 2

 

On 9/9/09 Salesforce.com announced the launch of Service Cloud 2, a new set of three collaborative offerings: Salesforce Knowledge, Salesforce Answers and Salesforce for Twitter.

 

With Salesforce Knowledge companies can share data in the Service Cloud, Salesforce Answers enables companies to create communities to capture knowledge and Salesforce for Twitter allows companies to screen and participate in the 45mio user Twitter community directly from the service cloud.

 

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IBM Looks Into The Crystal Ball

The IT mega vendor acquires the predictive analytics specialist SPSS

 

 

IBM-SPSS

On July 28th IBM announced the plan to acquire SPSS, a leading provider of predictive analytics solutions. The acquisition, which is subject to shareholder and regulatory approval, is expected to close later this year and will position IBM as a leading vendor of Business Intelligence in the market.

 

Please read this Forrester Report for more insights.

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Infrastructure, Software And Services – The Lines Are Blurring

CSC celebrates its 50th anniversary at Innoventure Europe 2009

 

At Innoventure Europe 2009 on June 22 & 23 in Paris CSC outlined their new strategic concept – increased industry focus and innovation.

After 2 years of transformation CSC has finally settled on their new vertical organization and strategy around the 6 industry clusters Public Sector, Financial Services, Manufacturing / Aerospace & Defense, Technology / Consumer, Health Services and Chemical, Energy & Natural Resources. With solid figures for FY09 including a net income of $1,115 million and strong sector growth in e.g. Healthcare (+30%) and Public (+4%) based on the new vertical strategy, CSC seems to be well positioned to navigate the stormy waters of the current economic crises. However, with the new vertical company orientation CSC will face some new fundamental challenges and questions that need to be addressed.

 

·        Technology Agnostic or Pre-packaged?

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Symantec Juggles the Channels

In an analyst event on Apr. 22nd in London, Symantec outlined their new Partner Management concept – increased focus on a decreased number of partners.

 

Channel partners are the lifeblood to Symantec’s sales and already contribute ~85% of the business in EMEA - which is expected to increase. This is split into segments; Small Business, which Symantec simply classifies by deal sizes below $5k, Commercial Business, which is above that threshold, and Enterprise Business with named accounts. To better execute on this segmentation Symantec has introduced a new dedicated SB (Small Business) organization and the cross-segment role of Business Development Managers to their ranks.

 

·        The Plan Is To Focus More On Fewer Partners

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Oracle Shakes the Eco-System

Since the announcement of Oracle to acquire Sun Microsystems you can find a lot of thoughts on the web about Oracle’s main motivation behind the deal, the portfolio mapping of the two giants and how Oracle would leverage pieces of the new assets or possibly sell-off some again.

Please read this Forrester Report for more insights.

 

Oracle continues to assure they are not planning to depart from any of their new assets. If we believe in this mantra the consequences to the whole IT eco-system are severe. It is the first time that a large application vendor expands into the hardware territory and forces us to redefine the traditional view of IT market segmentation – again.

 

·        Changing IT Markets Force Everyone to Rethink

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