Earlier this year, a few days after attending SAP Sapphire reimagined, I asked Quo Vadis, SAP. At that time industry legend Bob Stutz led the CX group already for 8 months, with Esteban Kolsky being his chief of strategy. At this event there was hardly any mention of SAP CX. This is in spite of the CRM market being the fastest growing enterprise software market and in contrast to then CEO Bill McDermott’s bold statements that SAP will take Salesforce heads on. Esteban meanwhile changed his role and has become Head of Product, Customer Service and Sales for the SAP CX unit, which indicates that there is an emphasis on execution. And then, there was the announcement that Qualtrics, the company that basically defined the experience management market and that SAP acquired barely two years ago, will be brought public. So, something is happening. But still, there is no word about a strategy or a vision besides a few hints that Bob and Esteban gave during various webcasts or a blog post, in which Esteban gave a glimpse at what he sees as the next generation CRM. It should not surprise you that his thoughts have to do with platform, as the overall market for business applications, and especially the market for customer experience, has morphed into a platform market. This void of communicated strategy was supposed to be filled in early May. This communication was cancelled in the wake of Jennifer Morgan leaving SAP and Christian Klein becoming the sole CEO. This void shall be closed soon, after it lasted far too long. This indicates some alignment challenges about how CX fits into the story of the intelligent enterprise, which actually is a story about intelligent enterprise networks, and likely the wish to be able to show some results of the new strategy. October 14, 2020 and October 15, 2020 are two big days for the SAP CX community. On these dates the SAP Customer Experience LIVE will take place. This is the event that shall be used to showcase the latest SAP Customer Experience solutions as well as information about SAP’s CX strategy and roadmap, plus some “exciting innovations”. Not unexpectedly, the event covers all five pillars of SAP’s CX portfolio, namely Commerce, Customer Data Solutions, Marketing, Sales and Service. But hold on: ‘Customer Data Solutions’. This is a new term, indicating that SAP has something up the sleeve, as this pillar was formerly known as the Customer Data Cloud, which was the new name of the (enhanced) Gigya solution. This alone is reason enough to look into what we can observe and what we can derive from this.

What we know and can observe

The most obvious thing to see is that Bob Stutz is still with SAP. And he has made Esteban Kolsky his Head of Product for Customer Service and Sales. Why is this important? These two are very high profile in the CX industry, and very driven by getting things done. The thing to get done here is making SAP a significant player in the industry again. If those two wouldn’t see a chance doing that … they would be gone. Especially Bob doesn’t need to do this anymore. He does this because he wants to, simple as. What does this in turn tell us? It tells us that SAP is serious about its CX line of business, even though analysts, consultants, and customers might not readily see this for a lack of communicated strategy. So, besides this, let us gather some facts and observations in random order, so that we can derive some conclusions out of this.

• SAP is strong with B2B customers. Manufacturing, but also CPG companies are some of the biggest customers.
• In the CX area, SAP is not particularly strong in with its Marketing Cloud (although the software is underrated in my eyes)
• With SAP Commerce, SAP owns one of the leading E-Commerce solutions.
• The Sales- and Service Clouds are pretty strong and do not need to hide.
• Growth in the Sales Cloud seems to be declining.
• The Sales- and Service Clouds are functionally adjacent to SAP’s core business, which is the ERP aka Digital Core. Marketing is not.
• SAP is investing in the service area, especially in S/4. The customer service module in S/4 is also essentially the former CRM Service.
• One of the four core processes that SAP has defined is lead to cash, which includes a lot of Commerce Cloud and Sales Cloud, augmented by quite some ex Callidus (CPQ, Commissions) and some Marketing Cloud.
• SAP CPQ, the former Callidus CPQ has been moved organizationally towards the ERP group.
• A good part of the on premise SAP CRM Sales and Service have been made part of S/4HANA.
• SAP has invested a lot into integrating the acquired solutions into the own software; this to an extent that made customers worried about the further roadmap.
• SAP has created a number of microservices on the SAP Cloud Platform that resemble business objects, in particular the business partner and with SAP Graph has introduced a business object orientated access model for its solutions, which abstracts away from the actual data layer.
• The Commerce Cloud is undergoing some modularization and the storefront is getting disjoint with Spartacus; this essentially creates a headless commerce solution, which goes beyond E-Commerce but makes commerce channel agnostic.
• In a recent investor interview (to which I wasn’t invited, so I took the quotes from a cloudwars post by Bob Evans), SAP CFO Luka Mucic made a few interesting statements about the SAP CX stance:
  • So, first of all, customer experience is absolutely a key market in which we want to be a significant player but with a focus on those categories where we clearly see that there is potential for SAP to be a strong #1 or #2 player.
  • There is a very obvious one in which we are leading the market and that’s the whole area of experience management, where we have Qualtrics, which is the category leader and that we are truly excited about and we are obviously looking at a partial IPO of Qualtrics to even further exemplify and magnify our growth opportunities.
  • The other area as I mentioned before is e-commerce, where we have with Hybris a very strong cloud fit that is growing in the high double-digits and that is in huge demand these days in particular with the challenges introduced by COVID. We think this is one of the core investment priorities for many companies around the globe.
  • And then also areas like customer data cloud, for example, where we also have a leading solution that can help customers manage the GDPR and triggers a digital sales motion in a way that is conducive to consumer preferences.
  • In others that from our perspective more translate into commodity markets where the growth rates are coming down and admittedly there is clear market leadership by others, we might look also at one or the other partnership opportunities. And in the meantime of course we see that the rising tide lifts many boats in many of those areas and so we will continue to look practically at an opportunity to participate in this growth.
  • But we don’t necessarily see it as an area in which we would dramatically double down on our investments. But clearly, CX remains a critical pillar of our cloud strategy, just in a little bit more of a focused sense.

Then there are a few things that I learned talking with various people.

• Not surprisingly, the CX team is incredibly busy.
• There seems to be considerable effort spent into re-platforming the CX suite, moving it away from the underlying Netweaver, making it cloud native software.
• The team is building something that they are calling a Customer Data Platform ++. This CDP seems to be built around the Customer Data Cloud as part of its core.
• SAP has moved a few of its main business objects and engines into the SAP Cloud Platform and/or is breaking them down into micro services.
• A strategic partnership with Thunderhead seems to be evolving, which is not overly surprising after Thunderhead’s partnership with Salesforce cooled down sudden- and rapidly and with Bob Stutz being the one who initiated the partnership at Salesforce
• There is some B2B marketing functionality that currently makes its way into the Sales Cloud.

And now you surely ask yourself where all this does lead to?

This is a good question, that at this time only SAP folks can answer. But let me take a stab at it. These are my predictions that I of course will have to validate with what I will learn attending SAP Customer Experience LIVE. As a precursor: Knowing Bob Stutz, he does not keep people busy for sake of being busy. This means that the team follows a clear plan. This is also evidenced by Esteban Kolsky moving from a strategy role into an execution role. Just to be clear, this is an opportunity that one doesn’t get too often! Both know that they need to change the game in order to be successful against Salesforce. As indicated by Mr. Mucic, SAP will just charge the CX market all guns blazing. Instead the company will focus own efforts on areas where it can be a number one or two. This is clear by Mr. Music’s statements. It is also smart because it allows SAP to establish and strengthen footholds that it can use as beachheads to enable further growth. Looking at the Sales- and Service Clouds, I believe that these will stay part of the SAP’s investment portfolio, with the core SFA market clearly not being a main part of the investment as it is not a major growth market anymore. This is also confirmed by the Salesforce quarterly statements. That means, especially for the Sales Cloud, that the focus will lie on intelligent add-ons that make life easier for sales organizations, and everyone who is part of them. The basis for this will be the already announced refined and much sleeker user interface. Additionally, it is interesting to look at what Mr. Mucic did not mention. He mentioned three parts of the CX portofolio: Commerce, Qualtrics, and the Customer Data Cloud. In addition to not mentioning the Sales Cloud, the Service Cloud, there is a notable lack of the Marketing Cloud. Customer service is actually an investment topic for SAP, especially in the S/4HANA area. So, it will be interesting to look at what is happening there, and how this extends into the customer facing front end, where Salesforce is attacking. Looking at the Marketing Cloud, and combined with what I observe and hear, the Marketing Cloud will not make it into a top two solution anytime soon. It is also at the fringes of the Lead to Cash process, which is one of SAP’s four core processes. Which is a shame. Powerful as it is – and it really is – the reasons for this lie back in 2016 or even before when there wasn’t enough focus on marketeers’ immediate needs. Now, thinking about a budding partnership with Thunderhead, some of the weaknesses of the Marketing Cloud could be resolved, given that the integration will be out-of-the-box and at low cost. The Marketing Cloud is already strong in first data management and with adding Thunderhead into the mix, it can become leading in customer journey orchestration. One remaining missing piece then would be out-of-the-box integrations into leading content management systems. Looking into Mr. Mucic’s statements about the Customer Data Cloud and at the high level agenda of the SAP Customer Experience LIVE, SAP has built something that can be considered the central customer master data hub for all SAP solutions, which is something that is sorely missing for quite some time now. If what I hear is right, SAP finally put the $ 2.4 bn investment into Gigya to good use.

And finally, some suggestions

SAP migrates a good deal of SAP CRM into S/4HANA while Salesforce is digging into SAP’s CX lunch. It could be interesting to be more aggressive about informing especially new, but also migrating customers that S/4HANA has quite some of the CRM functionality that customers need. And that it comes for free. Playing this card would potentially help swinging some Salesforce vs. SAP Sales Cloud deals into the SAP direction. Not all of them, but some. And this would nicely tie into the story of the intelligent enterprise and strengthen it. Industry solutions is something that SAP lately focuses on again. Good. This should be continued as it was one of SAP’s strengths and as the current CX main competitor – Salesforce – invested into industry solutions. Thinking this a little further, removing the artificial boundaries between front office and back office by offering all business objects and processes as services would be a real game changer. Many of the necessary pieces are available. It would let the applications vanish and build upon SAP’s strengths. Properly done, it would also remove the need for a (visible) middleware to connect SAP to SAP. This may be a long shot, but SAP Graph points into this direction. And finally, as a partner, I would wish for more integrated, configurable, and affordable demo systems. Frankly, it feels like pricing for these is at least as high as it is for customers. List price, to be sure. Partners are helping SAP to make a lot of business. They are using demo systems for generating business for SAP, so it would be great to have a closer look at how partner solutions are offered and priced. A page or two out of the competition’s book might be helpful here.

The News

In the past month, Salesforce made announcements around some interesting topics. First, beginning of October, the company introduced Einstein’s Guide to AI Use Cases, a web tool that is targeted at helping businesses identify viable use cases and provide some information about what it takes to support it. It starts with information and videos that explain AI, terms around AI and give some examples how AI can help improve different aspects of a business.  According to Sarin Devraj, Associate Product Marketing Manager Salesforce Einstein, for time being the site covers some fifty use cases but will be updated regularly to increase the coverage of relevant and interesting use cases. The website is intended to be top-of-funnel. The second and more recent announcement was about introducing Lightning Order Management, which shall enable brands to deliver end-to-end commerce experiences from shopping to shipping. Lightning Order Management is currently in beta and will be made available later this year. Right now it focuses on B2C processes. Based upon Lightning and enabled by Salesforce’s vast partner network, Lightning Order Management offers a low code platform that helps companies to easily create order management flows, including some partner applications. Salesforce expects the number of partner applications to increase steadily. Lastly, in the beginning of November, Salesforce announced its own Salesforce CMS, a hybrid content management system designed to help easily create and deliver content across channels. Salesforce CMS is designed to be simple, fast yet flexible, and closely connected to the Salesforce infrastructure. For time being Salesforce CMS is geared towards the Salesforce B2C e-commerce solution, but shall be extended to support B2B e-commerce.

The Bigger Picture

The world of engagement management (or, as other people say, experience management), is tightly coupled and needs many different types of applications working tightly integrated, including the necessity to create and disseminate knowledge. In other words, it has turned to be a platform world. These three announcements that cover vastly different topics, but towards the same goal, demonstrate the value that lies in a strong technology platform which supports an ecosystem that creates a win-situation not only for the platform owner, but also for partners, customers, and their customers. There is a tremendous potential in implementing business applications that are supported by AI, both in terms of effectiveness and efficiency. However, the decision about the application of AI in businesses has a number of challenges, ranging from ethical questions, via compliance, security and strategic right down to operational questions. All of them need to be addressed to successfully implement AI in an organization on more than just a tactical level. Salesforce cites three:

1. Identification of a viable use case and having the right data to support it
2. Addressing change within the employee work force and embracing new technology
3. Trusting whether the AI is correct and aligns with company values

Out of these they tackled the most technology orientated – and the easiest to implement one, which is also the one Salesforce can help best with. The second one is also about culture and the third one is really hard to do as it also and especially includes the need for an AI to be able to explain itself. Covering the order management aspect of e-commerce is one of the most important capabilities a vendor of e-commerce software needs to be able to cover. This is by its very nature a capability that gives full suite vendors an edge over front office focused companies like Salesforce. And even for suite vendors some of the necessary capabilities are beyond their scope, like tracking and tracing of a delivery (which is covered by a logistics provider) or payment, which is covered by a payment provider, e.g. to be better able to ensure PCI compliance. Topics like a ticket management that is integrated into the e-commerce solution are table stakes. What really matters is the ability to easily set up and efficiently maintain a process that enables e-commerce customers to achieve their goal with minimum own effort from awareness through support phases of their individual journey. And a CMS is all about enabling the delivery of the good news in an effective, consistent, and efficient way. That’s why, while a good headless CMS does the job (and a good one to it), an own CMS that is tightly integrated into the platform, can offer even more value. It reduces the time to value for the customer by offering a tight integration into connected pieces of the suite, be them an e-commerce solution,

My Analysis and PoV

Let’s start with Einstein’s Guide to AI Use Cases. It certainly is a nifty site that provides interesting and helpful information. A corporate web site being what it is: a marketing instrument – Einstein’s Guide to AI Use Cases is of course geared around Salesforce products. While there is nothing wrong with this, by excluding partner solutions it restricts its usefulness, even within the Salesforce ecosystem. The site will be updated with new use cases from a bank of existing ones. This will happen twice a year. It still being a young tool, Salesforce can decide to extend its scope at any time to cover more solutions, including partner solutions. This would be a good idea, especially considering that Salesforce has a thriving partner ecosystem. Salesforce and the partner ecosystem could get promoted by a decision towards this. Lightning order management reduces a gap that Salesforce has qua mission: The company has its focus on front office processes and supports back office processes, like order management, by virtue of a strong ecosystem and by offering the glue to connect the different pieces of necessary software. This is exemplified here. Salesforce offers to connect a good number of delivery processes to support the e-commerce process. I think that the acquisition of Mulesoft had a major influence in making this possible, including the integration of the service functionality, which, to be frank, is table stakes in the current world. Still, Salesforce connected it into one competitive and seamless whole. This is also evidenced by Salesforce e-commerce solution being part of a tightly spaced leader group in Gartner’s recent magic quadrant on digital commerce solutions (along with Adobe’s Magento, Oracle and SAP Commerce). The addition of the CMS is the icing on the cake. To be sure, it is a new solution that still has a few gaps, including good support for responsive design. But given some time, it surely will not only support page fragments but might help in building complete sites with a tight integration into e-commerce, marketing, sales force automation and customer service. Not to mention analytics. Think Hubspot on steroids. Three separate announcements – one mission – showing the power of a platform. I can only guess that these developments happened in a harmonized way. If not, imagine what could happen if there was a harmonization.

The News

On June 13, 2018, during its annual Connections event, Salesforce announced a number of additions to their marketing cloud and their ecommerce and service clouds. The announcement goes into three main directions:

1. Based on the strategic alliance that Google and Salesforce entered into in November 2017, the Salesforce Marketing Cloud will get a deeper integration with Google Analytics 360. Starting now it will be possible to combine Google Analytics 360 data and Salesforce Marketing Cloud data in a single customer journey dashboard within Marketing Cloud. Conversely, Google Analytics 360 can now leverage Marketing Cloud campaign data to better deliver targeted content to consumers. Both integrations enable a deeper understanding of customers and their behaviours. Later, in Q3 this year, Salesforce plans to offer a beta release of an integration that enables marketers to create audiences in Analytics 360 and to activate these audiences for engagement within the Salesforce Marketing Cloud.
2. Marketing Cloud Einstein gets a segmentation and a split capability. The segmentation ability enables the uncovering of patterns in consumer behaviour and the discovery of new audiences that then can get reached with personalized messages. The split capability enables marketers to create unique personalized journeys for each customer with simple means, getting an optimized path for them, based on the marketing objective.
3. There are a number of innovations to enable engagement across touch points. First, Salesforce announces their B2B ecommerce ability, second the new interaction studio that enables the creation of contextually relevant engagements and experiences in real time and third, the broadened availability of Service Cloud LiveMessage in 17 more countries. Live Message enables companies to communicate with customers through bi-directional mobile messaging.

The Bigger Picture

Today’s customer is far more connected and certainly more digitally savvy than the customer of, say, 15 years ago. With that expectations have risen. Customers want to feel far more valued, which first and foremost, includes getting the information that they want, at the time they want, and via the channel they want to receive it through – without unnecessary friction. In parallel, trust in information that is distributed by businesses is still very low, as evidenced by the Edelman Trust Barometer. Being able to be a trustworthy voice is the main challenge that enterprise software vendors (and consultants) need to help organizations overcome. This can only be achieved by enabling a dialogue with customers using information that is relevant and accurate. Another interesting point that emerges is that Salesforce and SAP (and Microsoft, and Oracle, to be sure) are sending a similar message – a message about the value of integrated clouds. The suite is back. While the venerable and esteemed Esteban Kolsky declares the death of the suite the big five vendors – adding Adobe here that recently acquired Magento – seem to be of a different opinion. So am I. While Esteban is right saying that the preferred deployment choice is the platform it is also right that the platform is only a different way of integrating business functions – it is integration of a different layer: data- and process integration via micro services or similar, as opposed to immediate functional integration in one single monolith. According to the news release, for Salesforce the future of CRM lies in integrated cross-cloud experiences. Coincidently, SAP just announced the same with their recent C/4HANA announcement. Both companies including ecommerce into the CRM stack doesn’t make that addition any more right. Ecommerce is a channel for CRM, an important one, but still a channel, and not an integral part.

My PoV and Analysis

With some of these announcements Salesforce capitalizes on two topics: First the company is increasing the footprint of its Einstein brand. Einstein gets enhanced in two dimensions. For one there is the functional footprint that quotes the number of 2 billion predictions per day and the staggering number of 2 trillion transactions that went through Salesforce systems in its 2018 fiscal year (without the notion of transactions being defined). Both are a clear jab, if not a straight punch, delivered into SAP’s direction with SAP claiming that more than 70 per cent of all business transactions touch SAP systems. The message that Salesforce sends is clear: We do have more than enough data for serious machine learning. Second, the recent acquisitions and partnerships. B2B ecommerce resembles the recent acquisition of Cloudcraze and the Interaction Studio is a result of the recently announced strategic partnership with Thunderhead, one of the leading customer journey orchestration companies. The additional integrations between the marketing cloud and the commerce cloud are likely an early result of the Mulesoft acquisition with more integrations to come. While I regard the Mulesoft acquisition as a defensive one it is still an important addition to the Salesforce family, as it enables the access to the commodity that Salesforce needs most: data. The acquisition of CloudCraze was straight forward after Salesforce taking a stake in the company back in the early days of 2017 and then acquiring Demandware, a B2C commerce provider. The strategic partnership with Thunderhead is the icing on the cake. Thunderhead ONE is strongly able to connect marketing systems with listening- and execution channels and to enable an orchestrated customer journey. This is something that Salesforce lacked so far and that brings them into a credible position against SAP and Microsoft again. I wouldn’t be surprised if this partnership turns out to be more than just a partnership. Looking at it now, Thunderhead is a very good match for Salesforce from a functional point of view. With the released and announced functionalities, Salesforce gives companies a strong toolset to understand customer behaviours and interests, and to react accordingly by offering customers what they are interested in. A word of concern and advice, though. Thunderhead is all about the customer journey from a customer point of view, or in other words, the customer choosing her own individual journey. This is something I have written and talked about before. Companies are offering touch points. Customers are using the offered touch points of their choice, at their pace, in a sequence of their own in order to get the result/value that they are looking for. The narrative that I see in this series of otherwise good announcements suggests that customers are being subjected to journeys. Salesforce’s story could become even stronger when adjusting the narrative to reflect the idea of customer created journeys.

The News

On May 21, 2018 Adobe announced that it has entered a definitive agreement to acquire Magento Commerce. The obvious objective of Adobe is to integrate Magento’s commerce capabilities into their own experience capabilities. According to Brad Rencher, executive VP and general manger, Digital experience, with this acquisition Adobe is the “only company with leadership in content creation, marketing, advertising, and now commerce – enabling real-time experiences across the entire customer journey”. Magento Commerce (Magento) is a ”leading provider of cloud commerce” software to merchants and brands. Magento covers both, B2C and B2B vendors. The company is listed as a strong performer for both, b2b- and b2c ecommerce solutions in this year’s Forrester Waves on Commerce Suites.

The Bigger Picture

Adobe is all about ‘delivering experience’. You should read the second part of friend Paul Greenberg’s recent ZDNet article on Adobe where he explains customer experience, brand experience, and consumable experiences – and where he sees Adobe in this triple – in his uniquely great fashion. A marketing suite like Adobe’s Experience Cloud needs channels into which the insights, that the marketing solution generates, are pushed. The most important one being e-commerce. E-commerce is also the channel that offers most potential. The technology is no more bound to just a commerce web site. The site is just one possible interface. As is a chat bot in Facebook Messenger. As is Alexa. Or Siri. Or Google Assistant. You get the picture. Further, an e-commerce site is not only the foremost channel to send marketing communications to (and to deliver experiences), but also one of the most important input channels for information that enables the delivery of an experience. With this, Adobe can now offer a closed loop scenario using own means instead of relying on partnerships. While Magento has a reputation as an open source platform, which implies focusing on SMBs, it actually has quite some Enterprise Customers. The company seems to focus on the larger end of companies. After all, this is where the money lies. With Magento, one of the few remaining players with credible ambitions and a record in the enterprise market went off the plate. And this has some implications for all players, customers, as well as competitors (and strategic partners). The remaining ones seem to be Intershop, Apttus, Insite, maybe Digital River – and possibly Shopify.

My PoV and Advice

Brad Rencher is mostly right with his broad statement, insofar he maintains the complete enumeration of topics – and has an audience with the right notion of ‘experience’ (again, I strongly recommend reading Paul’s article). But Adobe is not exactly the company (yet) that is able to deliver a complete picture of customer experience. There is no serious marketing without at least one (preferably more) strong communications channels. With the capabilities of Magento, Adobe takes a big step out of the pure marketing area. This acquisition is a great move that surely heats up the competition in the enterprise market. Where analysts (including myself) added Adobe into the Clash of Titans as the .5 next to the big 4 Adobe now emphasizes on being treated as an eye-to-eye competitor in the wider CRM space. This is, because a CRM offering cannot be complete if there is no e-commerce channel part of it. And referring to partner solutions in this critical area just doesn’t cut the mustard, especially if one is competing in the high end (hello, Microsoft?). Additionally, this merger offers the possibility of reviving Adobe’s open source and community roots. There are three main pieces of advice.

One for Adobe and Magento customers

I do not think that there is a need to be concerned about ongoing Magento support. Look out for a Magento roadmap and an integration roadmap, and inquire about plans for CRM beyond e-commerce and marketing. Being able to support omni-channel marketing and omni-channel commerce is one thing. Becoming a full stack provider is a totally different ball game, especially if not only enterprises shall get addressed.

One for SAP, Salesforce, and Oracle

Observe and learn. Adobe has the leading experience suite and now owns a leading e-commerce solution along with a huge eco system. This also makes integration between different parts of the own solutions crucial. It must work seamlessly and be dead simple to achieve. Secondly, together with the customer service module of Magento the company is getting closer to offering a full featured CRM. Using the various Magento editions Adobe also can make a credible step into the SMB market. Scaling down is difficult, but this ability now becomes even more important.

One for Microsoft

Adobe is an important strategic partner for Microsoft, with Adobe being the preferred marketing service for Dynamics 365. With this acquisition Adobe becomes an even better fit, but gained some more independence from Microsoft. Microsoft itself only recently delivered an own marketing solution that is targeted towards SMBs, which may grow over time. Microsoft also does not own an e-commerce stack. Adobe now does. With a market capitalization of around $ 120B Adobe is probably too expensive to be acquired but the value that Adobe can offer to Microsoft is significant. So, keep this partnership as intensive as possible.

And a Bonus One for Adobe

The Adobe Experience Cloud is a great product, which can deliver a lot of value. It, however, has a pretty significant price tag, which causes a barrier, especially when looking at more and more saturation in the enterprise market and a MarTech landscape that lists almost 7,000 companies and growing (fast). The acquisition of Magento offers the possibility to strengthen the footprint in the mid sized business market, which still has tremendous potential, especially since the big 4 are struggling to penetrate this market, too. The risk of not extending the view to this market is being pushed upwards and then out of the market.

This year’s SAP Hybris Summit in Barcelona was attended by almost 3,000 paying participants, which is likely to make it the biggest ever, in spite of the recent unrest in Catalonia. It was packed with partners and presentations. The message all around was about subscription economy, how companies will need to transform themselves from product- to service companies, and how SAP supports this by delivering YaaS, networked solutions, IoT and machine learning, based upon the SAP Cloud platform. Owing not only to the topic of subscription economy GDPR was, of course, a topic, too. The key message here was: Our software helps you being compliant. With SAP Hybris standing not only for ecommerce but also for SAP’s new brand of CRM (oops, engagement) solutions, there was astonishingly little information about the Sales- and Service Clouds and only a few bits about the Marketing Cloud. The pending acquisition of Gigya was naturally out of scope, although Gigya as a partner featured in the show with a booth and presentations in the theaters.

Day One

Having said this, the first keynote, held by SAP Hybris president Carsten Thomas, was slightly underwhelming. It set the stage for the topic, but was essentially last year’s content. The narrative was all about how companies like Uber and Airbnb change the game for traditional companies, the impact of machine learning, and the importance of focusing on experiences (not even outcomes). In brief: nothing new, and only a fuzzy view on SAP Hybris’ strategy. It, however, was presented very well. The Q&A’s offered on day one added some more flesh to the topics, also on the delineation between SAP Hybris and SAP. Carsten Thoma: “We want to focus on all the products that are enablement products” and “if you talk about experience, this is actually what we are focused on”. In other words, the ‘traditional SAP’ concentrates on the transactional part of the software – the heavy lifting – whereas SAP Hybris focuses on customer- and employee facing software. However, being challenged about SAP Hybris Marketing both, Thoma and Marcus Ruebsam, SVP Global Head of Solution Management, SAP Hybris, admit that in spite of having a sizeable number of developers on the product, there is a need to balance new innovations for the ‘next wave’ with what “you have to do today”, but first priority remains the creation of a complete view on the customer. According to Macus Ruebsam the Marketing Data Management piece is crucial, including the combination of online and offline data. Optimization using Abakus drives results and the first party data abilities of Gigya will add further value. SAP sees the keys for being successful tomorrow as data management and enablement. The day’s second Q&A was about the Revenue Cloud, featuring Adobe as a customer. The message to be conveyed was that SAP’s revenue cloud helps a customer with a complex, heterogeneous systems architecture turning their products into services while having the ability to measure and monitor to offer the “best matching contract”. Quizzed here the Adobe representative more or less admitted that “best” means best for Adobe, not necessarily for the customer, which depicts how far companies still need to go in terms of customer centricity.

Day Two

Rob Enslin’s keynote on day two brought the audience closer to how SAP intends to address the challenges facing businesses. This keynote, substantiated by a demo that led the audience through the process of acquiring a drone through a service incident, and upselling showed in how far SAP sees IoT and Machine Learning permeating applications. The storyline showed the audience everything from intelligent recommendations through an IoT data driven service call with resolution and a profile driven upsell process. The bold statement made by Moritz Zimmerman was that SAP is the only company that can deliver this breadth of services, stretching from (customer) acquisition through sales, and service, to billing, and being powered on one platform – supported by IoT and Machine Learning (phew, what a monster of a sentence …). The keynote got closed with an appearance of fast speaking futurist Sophie Hackford who animatedly told the audience that “Minority Report” with all its continuous surveillance and advertising is already an exciting reality. To be honest, I found that more than slightly dystopian.

My PoV and Analysis

Overall I think that this was a good event for SAP Hybris, although in my eyes too much centered around ecommerce. The event could have benefited from more messaging around engagement and enablement. Also the number of press releases was surprisingly low. Still, a good event that gave a view on strategy. With a storyline that stretches from (customer) acquisition through service and revenue (Revenue Cloud) and that supports the vision of a networked and subscription based economy, SAP Hybris has a compelling and consistent vision of the future. I, however, would suspect that other companies will contradict the bold statement that SAP is the only player that can deliver on this functional breadth. Microsoft, Oracle, and even Salesforce do make the same claim. Where SAP is right, though, is that the vast majority of transactional data – 76 per cent – at one time or the other touches an SAP system. This in all likelihood is due to the Ariba network. This is a very good basis for machine learning, however one should not forget that SAP’s customers own this data, not SAP. Still, combining this data with the profiling possibilities that Gigya promises, there is a tremendous potential, even if it is on the leash of privacy regulations. It will be interesting to see how the repositioning of YaaS to become an enterprise repository of (not so) micro services pans out. The short term vision seems to be establishing it as the new basis for delivering added services to SAP solutions, which is not dramatically different from now. However, being based on and integrated into the SAP Cloud platform it has the potential to re-architect the way SAP builds and delivers software, as well as customers and partners. Integrated with the Revenue Cloud the new YaaS is a showcase of how the subscription economy could look like. On the downside, although SAP’s vision is compelling, I know some customers that complain about missing functionality, e.g. in the subscription area (Revenue Cloud) or (e-mail) campaign execution. They regard these functionalities as basic and essential. There consequently is a gap between narrative and reality or perception that needs to get closed. This either requires a different balancing between going for the ‘next thing’ and fulfilling current needs or more education. Regardless what it is, this gap needs to be closed.

Famous Last Words

One more word on the topic of subscription economy. SAP execs times and again used ‘sharing economy’ as synonymic to it, naming Uber and Airbnb as prime examples. There is nothing like a sharing economy! The term ‘sharing’ implies altruism. These companies, at best, are using peoples’ altruism to their benefit. These companies, as well as SAP’s vision are about a platform economy, and dominating markets (plural!) by scaling to become the strongest platform around. Part of it is using the data that customers willingly or reluctantly give. There is no altruism whatsoever involved. Acknowledging this more openly would be good for all involved parties. That builds trust. After all, lacking trust was cited as the number one reason for customers (consumers) to abandon a brand.

Finally, the much-anticipated Forrester Wave on CRM Suites for Mid-Sized Businesses Q4/2016 has been published by Kate Leggett and her team at Forrester Research. Besides the usual suspects Oracle, Microsoft, Salesforce, and SAP it covers 7 more vendors that fulfil Forrester’s definition of a CRM suite for mid-sized businesses. This definition roughly is

• To be considered a suite the software covers at least three of the CRM disciplines
  • Marketing
  • Sales Force Automation
  • Customer Service
  • Field Service
  • E-Commerce
  • Customer Analytics
• There needs to be prebuilt integration between the products, if they are not within the same system; integration shall be via open standards to allow for integrating other applications.
• The software needs to be targeted at organizations between 250 and 999 employees.
• Multiple industries need to be targeted.

Of course, the solutions need to be in active use and there need to be customer references. The Forrester Wave has some interesting results, some confirming what other people see, too, others somewhat surprising. Forrester-Scores Let me start with the confirmations, continue with bits that surprised me, and close with an SAP specific view.

The Confirmations

Of course, we are talking cloud – cloud and nothing else. As can be expected all vendors strive to deliver a toolset that helps their customers to deliver consistent customer experiences. Now I, and others, would argue that the experience is largely in the realm of the end customer and the users and that there is nothing like a ‘system of experience’. Delivering consistent experiences encompasses far more than a CRM suite. But then it is far easier (and sexier) to talk about delivering experiences than about systems of record and engagement that help in giving customers a great experience. The CRM landscape has just exploded, yet is quite mature – which sounds like a contradiction in itself, but just shows the power of the cloud and modern architectures – in particular micro services – to drive innovation. Despite lots of consolidation going on in parallel, too, there are suites targeting different sizes of organizations, different industries. All of them deliver different breadth and width of functionality. Then there are plenty of best-of-breed vendors that may or may not commit to one of the major platforms; some of them may or may not be viable, or might just get acquired. In essence, smaller vendors try to eat the bigger vendors’ lunches and to push the contenders upmarket by providing good point solutions with great user interfaces. The contenders are responding by increased modularization, with acquiring functionalities they need to close their functional gaps, and with an ecosystem/platform play. The ‘Triple I’ of Integration, Industry, Intelligence finally becomes key. To me it has been obvious for more than a decade but the concept now gets real traction. Integration and intelligence because of advances in technology, industry due to a realization that no one can be everything for everyone; this only bloats the systems and ultimately makes them clunky, expensive, and unmaintainable. Finally, it is no surprise that the big 4 show up as leaders. Oracle, Microsoft and Salesforce are currently a given, and SAP worked hard on their strategy, messaging and delivery. Since 2016 they in my opinion have a very competitive solution set with their Hybris branded products. Salesforce still leads the pack but will feel some real challenge by Microsoft if they get their marketing functionality sorted and finally offered an integrated e-commerce solution. The latter could be a real push. Ah, yes, an improved pricing engine couldn’t harm, either – but that holds true for Salesforce, too.

The Surprises

Yes, there are a few. Starting with bpm’online. I wouldn’t have expected to see them as a leader, but apparently, they have significant strength in SFA and their platform, combined with transparent pricing and very happy customers. Congratulations. Build on these strengths, work on some of the perceived ‘weaknesses’ – I’d recommend e-commerce, marketing, and customer service to start with. Pegasystems is not in. OK, looks like their client base is a bit too far on the Enterprise side. SAP has a low score in e-commerce. What? Given Hybris being one of the strongest e-commerce solutions around, this is a bit of a surprise. Let me resolve this conundrum in the SAP section.

What this means for SAP

Welcome back amongst the leaders! This is long overdue, but SAP’s absence as a leader was largely self-inflicted. Poor strategy, poor messaging, poor products. Finally, this changed. But why the low marks in the e-commerce section? The devil is in the detail. Forrester sees only a loose coupling of e-commerce to the rest of the suite. Hybris Commerce essentially is still seen as a standalone product that can be plugged into the CRM landscape. This, besides being a challenge for in-depth integration also leads to user experience challenges and a few product inconsistencies like having customer service functionality in Hybris Commerce as well as in Hybris Cloud for Service. But again, Hybris Commerce is one of the strongest e-commerce solutions around. Then there are some smaller tidbits, which are mainly around Field Service, platform, and pricing – with the latter being a recurring, eternal topic. Increased pricing transparency would be a real boon. Regarding field service and platform SAP seems to be on a good way with the release of SAP HANA 2 and ongoing work in what SAP calls the high touch service area. In closing, for SAP this Forrester Wave marks both, a success, and a little setback. The success lies in them having managed to make it back into the leaderboard, albeit barely, due to them now having resolved above three issues. The setback lies in the fact that they haven’t been able to fully sell the integration story between e-commerce and the rest of the Hybris branded products. While the cloud for customer and marketing products are built on SAP HANA, Hybris Commerce is not. This is clearly a platform gap. Furthermore, the integration between Hybris Commerce and the other products still is limited. On the other hand Hybris Commerce not being built on SAP HANA can help SAP to sell into non SAP customer bases. So, I personally would not see it as much of a problem as Forrester does. Still, some more work is clearly necessary on both ends, technically as well as from a messaging point of view. For more coverage on SAP, refer to below articles. https://socialmeetscrm.blogspot.co.nz/2016/11/sap-and-machine-learning-strong.htmlhttps://socialmeetscrm.blogspot.com/2016/11/sap-hana-2-revolution-or-evolution.htmlhttps://socialmeetscrm.blogspot.com/2016/10/clash-of-titans.htmlhttps://socialmeetscrm.blogspot.com/2016/09/how-to-get-sap-and-sap-customers-beyond.htmlhttps://socialmeetscrm.blogspot.com/2016/05/love-is-in-air-sap-and-ms-deepen-their.htmlhttps://socialmeetscrm.blogspot.com/2016/05/the-may-2016-version-of-gartners-magic.htmlhttps://socialmeetscrm.blogspot.com/2016/05/enterprise-meets-sexy-sap-apple.htmlhttps://socialmeetscrm.blogspot.com/2016/04/sap-crm-light-at-end-of-tunnel.htmlhttps://socialmeetscrm.blogspot.com/2016/02/sap-state-of-nation.html