In the past three posts of this series I have covered the definition of a platform, followed by a brief analysis of the big four players in the customer experience world, namely Microsoft, and SAP, followed by Salesforce and Oracle.

And then there are the IaaS Platform Providers

Of which there are mainly four, although Gartner Group lists six of them in their 2018 Magic Quadrant for Cloud Infrastructure as a Service, Worldwide! And this drop from 14 vendors in 2017 to just six in 2018 already shows how much consolidation is going on in this market. But why even mention them here? After all this text originated as an analysis of the big business software vendors. Cloud infrastructure provides are important for two reasons:

1. They do provide the raw computing power, the storage, networking resources, etc. for business workloads in a highly elastic way – including the ability to scale up and down in (near) real time.
2. IaaS platforms also more and more contain and offer the PaaS portion that is necessary to offer value added services.

In essence, the big six of the IaaS providers that are covered by the Gartner Group offer a technology platform, an ecosystem, insight, and productivity tools. The only thing that they are not really doing – yet – is offering rich, integrated business applications. But back to why I do see only four main IaaS providers going forward. These famous four are AWS, Microsoft, Google, and Alibaba. Of course with AWS having a tremendous lead for now, with Google and Microsoft struggling for the second spot, and with new kid on the block Alibaba growing bigger in their rear view mirrors. IBM and Oracle, similarly to venerable names like Rackspace, Fujitsu, NTT, and the other ones that dropped off the quadrant, will become niche players. Oracle, already one of the Titans, concentrates on Oracle database and Oracle application workloads. While the Oracle DB arguably runs best on Oracle hardware this will not prove to be a winning value proposition for companies that have the choice between highly performing databases. And even when running an Oracle DBMS they might opt for somebody else’s cloud. Similarly IBM. Although they are moving away from a hardware company towards being a services company there is a lot of legacy around them. This legacy will be hard to shed off and this will diminish IBM’s ability to fully compete as an IaaS vendor on a global scale. Both of them will survive – but they will not get anywhere near the market presence of the IaaS titans. So, let’s have a look at them.

Starting with the new kid on the block: Alibaba.

Alibaba’s home turf is China. The company, however, is very actively enlarging its footprint and reach. By now it is offering more and more services that are available in China worldwide. Still, not everything that is possible in China, is possible elsewhere. However, with its protected homeland the company is able to mature offerings in a ‘safe’ environment before offering them in the highly competitive ‘rest of the world’. Partnerships like the recently renewed one with SAP show an increased credibility. Additionally we should not forget that Alibaba with its retail business is similarly capable of providing data services that only Amazon or Google could possibly compete with. And then there are services that are common place in China but virtually unknown hereabouts: How about paying directly from your phone? No credit card needed … Alibaba is a (distant) number four in this quartet but certainly a force to be reckoned with.

Which brings me to number three: Google.

Google is providing an integrated offering that basically commercializes the technologies that the company needs itself. In this it is similar to Alibaba and AWS. In contrast to the other vendors it, however, is dealing more with open source software and is open sourcing its software. It shows that open source can be a very successful model. While the overall offering is less broad than the one of AWS its AI and ML capabilities are very high, based upon the unrivalled amount of data that the company ‘owns’. A challenge that Google has – and will continue to have – is the ability to attact large business workloads. Although SAP partners with Google (as well as with Microsoft and AWS) I do not think that they will get a strong foothold in this area, especially competing against Microsoft and Azure. On the other hand GCS is the ideal ‘entry drug’ for smaller and aggressively growing businesses.

The Runner-Up

Microsoft does not only have a strong application stack, but with Azure additionally also offers a competitive IaaS stack. Microsoft’s real advantage is the ability to completely use the own stack to generate work loads as well as extending the own cloud into their customers data centers with the Azure stack. Azure not only has a worldwide availability but also security certifications covering most important regions. Add partnerships with Enterprise vendors like SAP and Adobe and the strong partner ecosystem that works with SMBs there is a very strong position: Azure is attractive for large businesses as it arguably can run very large workloads. Azure is attractive for SMBs as it is easy to integrate various pieces of the platform (remember: technology platform, insight, ecosystem, productivity). All pieces are available and tie well into each other. This is one major reason why other enterprise software vendors should be wary of who they hunt. Instead they should sometimes have a look into the rear mirror to cover their back.

And the 800-Pound Gorilla

AWS is still leading the pack with quite a margin. Since its invention the company shapes the market by a seemingly neverending array of new services, supported by price cuts that are made possible by the sheer scale to which the platform grew. Amazon’s offering is probably the most complete around. Apart of being a very strong in SMB and new economy businesses the company has partnerships for example with SAP and with Salesforce, or with Workday, to name just some, that help it getting enterprise workloads. Still, from its very origins AWS is still less attractive for traditional enterprises but more for the maturing kids of what was called the ‘sharing economy’. On the data frontier it is powerful, but lacks a few of the capabilities that Microsoft has. On the other hand AWS has its hand on behavioural consumer data that can easily get commercialized.

IaaS Summary

Amazon’s AWS is still the power that no one can ignore. However, there are now three competitors that cannot be ignored, either. Especially not by AWS itself. Right now it is probably too early to do any forecast but one thing is for sure: Things will get exciting. Amazon AWS is vulnerable. Vulnerable on the data frontier and on the enterprise workload frontier. It is not a given that AWS stays the undisputed leader. In fact, I’d wager (sorry, no forecast) that AWS gets attacked from multiple angles. Microsoft will get more of the enterprise type workloads that AWS needs. Google has a good chance to tackle Amazon from the small business side of the house, while Alibaba has the potential of becoming a full blown tsunami, covering small biz to enterprise workloads, just like AWS does. One thing is for sure in this part of the clash of the titans: A competition of more than three players keeps the heat on by enforcing customer facing innovations and price models. May the games continue!

More Food for Thought

In the last article Clash of Titans – Microsoft and SAP weigh in of this little series, I discussed the strategy of two of the big four and how they are positioned in the platform play of the business software titans – and others. This article covers the other two: Oracle and Salesforce. These business software vendors are competing in a market that is changing – commoditizing – at a fast rate towards an experience market, and probably beyond, if I follow the argumentation and thoughs of CRM godfather and friend Paul Greenberg. Business application vendors can stay really successful only if they morph into platform players. And this platform is more than just a technology platform, but encompasses four dimensions. The four dimensions that are paramount to be able to deliver great engagements that result in lasting positive experiences are

• Platform (IaaS/PaaS)
• Ecosystem
• Insight
• Productivity

In this article I look at Oracle and Salesforce and how they position themselves in this game of thrones. But now, without further ado, let’s dig into the topic.

Oracle

Since the launch of what originally was project Fusion and now is Oracle CX, the company has done a remarkable pivot from being an on premise company to becoming a cloud company. The company has its strength in being a full stack provider with a full range of business applications. However, its main strenght is owning the gold standard database engine that runs the majority of business workloads worldwide. From its overall technological profile one could position Oracle somewhere between SAP and Microsoft as it with Open Office also owns a full fledged office suite that helps on the productivity side. However, Oracle is not a public cloud IaaS player although, at its core, it is rather a technology company than a business software company. The main purpose of the Oracle cloud is running Oracle applications, and running them efficiently. And to further reduce the resulting risk of customers defecting to other vendors Oracle introduced its Cloud at Customer back in 2016, which was actually a pretty good idea. This is also evidenced by Microsoft copying it with the Azure Stack. Ecosystem-wise, Oracle appears to be trailing Microsoft, Salesforce, and SAP. While the company owns significant assets that have their roots in the open source community, like Java, or Open Office, Oracle does not have the reputation of being much of an ecosystem player, but more of a kind of bully. Still, Oracle has a good number of implementation partners. Insight is one thing where Oracle has strengths. For one there is a full stack of business applications that are capable of delivering a lot of important data into Oracle’s machine learning algorithms. But there is more. The database. Especially since the introduction of the Autonomous Oracle Database Service. This service promises to bring down cost, while increasing performance and delivering unprecedented scalability and security. And it delivers data that can be used for improving one of the most worrisome challenges: It delivers the insight on security problems and is capable of acting on it. This is a value proposition that currently none of the other vendors can claim to have. Although it is only a temporary advantage, as so frequently in this business. Oracle owns a good number of productivity tools, namely the above mentioned Open Office. It has also intelligence built into the business applications – and the administration layers – that increase staff productivity. So, they are playing fairly well in this dimension, too. In my eyes Oracle should work on becoming more approachable, and getting rid of the image of being a bully. Improving on the ecosystem frontier while using the great database asset that the company has could make it an even more formidable player than it already is. Oh, yeah, and do not set your sights too much on AWS. Microsoft is your real opponent.

Salesforce

Salesforce surely is the current synonym for CRM software, and this not only because the company wisely chose this acronym as its stock ticker symbol. Evolving from its origins the company has evolved its portfolio into a wide variety of customer facing applications. The company also has realized long ago that business applications will get commoditized and that there consequently is a need for a platform, which can get used by its vast ecosystem of ISV’s and implementation partners. The platform that helped Salesforce starting their ecosystem is Force.com and, in combination with being an ecosystem player at its heart it was able to create one that is probably rivalled only by Microsoft’s. Salesforce’s Trailhead education platform is even better than what Microsoft offers. While the technical platform is (mostly) limited to customer facing applications, which also has a challenge on the data side, discussed below, the thriving ecosystem is Salesforce’s biggest asset. The combination of ecosystem and relentless focus on customer facing applications resulted in Salesforce taking an undisputed leadership position in the wider CRM market. Well, a strong sales strategy and execution helped to get there, too; still helps. However, as mentioned above, the company’s focus on CRM-like applications and then e-commerce results in limited access to data. And data is the raw material for insight – which is actionable information. From an insight angle, Salesforce has created its Einstein layer, which is embedded into the applications. Embedded intelligence is what can create immediate value for business users. It provides predictive analytics and recommendations, sometimes even prescriptions to users and/or takes away tedious tasks. And this is exactly where Salesforce’s data challenge lies. Salesforce has a lot of customer and order data, but none of supply chains or relations outside a company realm. This is where Oracle, SAP, and especially Microsoft have an edge. This was also an important reason for Salesforce attempting to acquire LinkedIn and looking at acquiring Twitter. The company finally acquired Mulesoft, which can alleviate the data weakness to some extent, while also serving as an improved glue between Salesforce owned applications and Salesforce to non Salesforce integrations. Mulesoft connects processes and therefore gives access to business data which it can also feed into Einstein’s machine learning capabilities. The main productivity tools that Salesforce offers, are Chatter, the embedded analytics applications including the Salesforce Inbox and the Lightning UI. With these the company covers business productivity but still trails the ability that e.g. Microsoft can offer with the office suite of products. In summary, Salesforce is a formidable player. Right now, no competitor can afford ignoring them in the wider CRM area. It, however, is not all hunkydory in downtown San Francisco. The company is in need of getting more access to data and better access to the supply side of businesses instead of focusing on the demand side, where it is undoubtedly very strong. Another facet is the need to staying perceived as the innovator of the industry. This one is particularly important as it helps Salesforce command premium prices, which keep it profitable. While, from a customer experience point of view one cannot go around Salesforce, the company’s low profitabilty is an achilles heel that the competition does attack and will continue to do to. In order to not run into the risk of getting sidelined, Salesforce needs to continue playing its strength in innovation while improving on its profitability – without increasing prices.

In Summary

Salesforce is sitting on the throne that the other three companies are after. However, it is not a stable position. Salesforce owns the definition of CX, but it is dangerously limited in its scope. Looking at the big four, Salesforce for SAP and Microsoft is the enemy’s enemy, that keeps them in a carefully balanced alliance … which probably gets instable if Salesforce shows signs of being dethroned – by either Microsoft or SAP. Having said this, I do not see Oracle as being one of the top three vendors, rather a number four. This is in spite of its tremendous database force, which already is attacked, too. Oracle is lashing out at Amazon, both Microsoft and SAP have Salesforce in their sights, for time being. The company that should get into the sights of everyone else is Microsoft. Microsoft has all it takes to become the number one, including the most compelling strategy for small and emerging companies. Then we see some smaller players like e.g. Freshworks or Zoho that have the chance of disrupting the big players from below. But is this a fixed outcome? Not by far. All these companies are playing their strengths. And then we have the big infrastructure players, too. Amazon, Google, and Alibaba. And then there is Apple. These companies, plus the likes of Facebook and Netflix, sit on the one commodity that becomes more valuable by the minute: Data. Alea iacta est! Non tacitus!

A little recap

As it has been some time since I published Clash of Titans – Platform Play, the first part of this little series, let me start with a little recap. The business applications market, especially the CRM market, is evolving fast. CRM has morphed from concentrating on transactions to become an enabler of engagements. Engagements in turn result in experiences. And positive experiences are what companies want to achieve. In a digital world this is possible only if companies rely on a foundation, a (technical) platform. Becoming the provider of the dominant technical platform therefore has become the main goal of of the big business software vendors. However, even governing a great technical platform is not enough. Software vendors that want to be successful platform players need to be able to deliver on four areas to succeed:

• Platform (IaaS/PaaS)
• Ecosystem
• Insight
• Productivity

Only if they deliver on all four aspects are ‘platform players’ able to provide their customers with what they need to involve themselves in digital engagements that result in sustainably positive experiences. I will look at how the big four are measuring up in this and the next article of this little series. Microsoft and SAP will be the starters. Then I will look at Oracle and Salesforce. I might conclude with some surprise additions. But let the games begin!

Microsoft

Microsoft is the (not so, if you look sharply) hidden champion of this game. Actually, I think that Microsoft is the 800 pound gorilla in this game. It is Microsoft’s objective to become the fabric that connects enterprises of all sizes with their stakeholders, including the customers’ personal lives. And, as I have written earlier, they have all the ingredients they need to achieve this objective. With Azure there is one of the strongest IaaS and PaaS games in the play. Including Azure Stack, Microsoft is capable of offering hybrid deployments. And in all seriousness, hybrid clouds are here to stay for quite a while. The Power* series of tools and applications helps extending the business applications and the development environments are very powerful. Microsoft is the clear leader when it comes to productivity applications outside the core business applications, which are also tightly integrated into the business applications for further impact. On the insight side the company has few equals, being able to leverage the power of both, LinkedIn and Bing, their own search engine, and the wealth of data that comes from a plethora of different devices. This is combined with strong analytics and machine learning capabilities, which can create insight out of all the data. Last but not least, Microsoft has one of the strongest ecosystems on this planet. What they do not have themselves, someone else is developing. Microsoft then embraces the partnership angle. A very visible example for this is the current strategic partnership with Adobe. Microsoft till recently did not have an enterprise grade multichannel marketing engine. Nor an ecommerce system. Adobe has both. Microsoft is reselling Adobe as part of their strategic partnership. Finally, there is something else that needs to be considered. As stated above, the enterprise market is saturated. All big vendors, and many more small ones, are tackling the SMB market. Microsoft Dynamics is not as high end as the competition but very suitable for the higher end of the SMB market. This makes Microsoft interesting for companies that would not look at SAP, Salesforce, or Oracle. Microsoft also runs a very strong partnership with Nimble, which opens up the Microsoft Dynamics world for small, but growing businesses. On the flip side: Microsoft is not (yet) universally perceived as a business applications company. Still, the company is in a position that none of the other vendors can take (yet): None of them is able to combine the enterprise value chain with a productivity suite as powerful as Microsoft’s and a reach to the end customer. Add some tremendous data assets and a strong ecosystem to the mix. Exactly this breadth and width of the offering is Microsoft’s biggest strength, which covers for functional weaknesses in some areas like supply chain, ecommerce or marketing. If Microsoft is able to mitigate these weaknesses while continuing to play to its strengths, the company should be able to gain considerable market share on cost of one or more of the other three.

SAP

Using Microsoft’s objective as a guideline, SAP is currently the business vendor that is closest to being the fabric of enterprises. The reason for this is the access to data in combination with the ability to support the whole value chain of companies across a wide range of industries and sizes. Looking at the enterprise software market, SAP is the clear leader in ERP software. On top of this, SAP has Ariba. Ariba, or the SAP Business Network is one of the largest, if not the largest, business market places around. In combination, SAP can say that nearly 80 per cent of all business transactions touch an SAP system, one time or another. On top of this, with Gigya SAP owns one of the strongest Customer Identity and Access Management platforms around. Via this platform SAP manages more than 1.3 billion identities, along with their consents, across hundreds of sites. The smart progressive profiling methodology that is built into this software also helps with building valuable profiles out of these mere identities. In combination with SAP’s strong analytics capabilities, the company is able to generate extremely valuable insight to businesses. In addition SAP, like Microsoft and Oracle, covers the complete value chain of businesses, just that SAP’s offering is probably stronger than that of the competition. This, again, gives SAP customers vast amounts of consistent data that can be utilized to offer more value to their customers. This application strength in what SAP calls the ‘digital core’ is also a good part of its platform. Add to it an SAP Cloud Platform (SCP) that offers the majority of services that an agile business needs and that gets increasingly stronger we have a very strong (PaaS) platform play. This platform, along with one of the strongest partner ecosystems around can open up the SMB market, and hence strong growth, for SAP. Talking about its ecosystem, SAP has a wide variety of implementation and consulting partners, that support each other and get support via platforms like the SAP Community Network SCN, or the SAP Partner Edge. SAP positions itself as an enterprise software player, as opposed to a full stack player like, e.g. Microsoft. Consequently, the company’s IaaS capabilities are limited. Instead, SAP is pursuing a multi cloud approach by being able to have its software run on all major infrastructures. This is a smart move as it keeps the company’s independence while offering choice to clients. One of the company’s better kept secrets – SAP Business by Design – is a central element of its strategy to address midmarket companies. Apart from the prevailing (but increasingly wrong) opinion that SAP is difficult to deal with, SAP’s weakest spot is productivity in the sense of office products. The company covers this topic via integrations with Microsoft’s suite of applications, and probably Google apps soon. But, to be sure, efficient, and automated execution of business processes is at the heart of SAP’s value proposition. If SAP continues to play on its ERP strength while pursuing the newly established focus on its Customer Experience unit it has a good chance to stay one of the dominant players.

In Summary

Here we have two companies that are greatly positioned in a platform market. With different starting points and strenghts they share similar visions. And they work hard towards it. Exciting times. But let us see how Oracle and Salesforce are playing their cards – or should be. A bientot!

The News

On March 20, 2018 Salesforce announced the signature of a definitive agreement to acquire Mulesoft for a whopping 6.5 billion USD – whopping because the 2017 Mulesoft revenues have been at just $296.5 Million, albeit with a $1 billion target for 2021. The press release states that “together, Salesforce and MuleSoft will accelerate customers’ digital transformations, enabling them to unlock data across legacy systems, cloud apps, and devices to make smarter, faster decisions and create highly differentiated, connected, customer experiences.” Mulesoft is recognized by Gartner as a leader in the 2017 Enterprise Integration Platform as a Service Quadrant.

The Bigger Picture

As I have stated repeatedly before, most recently here, the enterprise software market is engaged in something that can be called a platform war. There are a few big players and some emergent players in the enterprise software market, and then we have a number of companies that come from the infrastructure side of the house. Business applications get commoditized. Therefore the platform becomes crucial in a battle for dominance. And it is not a given that there will be a dominance. Looking at the 4 big software vendors, Microsoft, Oracle, Salesforce, and SAP, they all have different legacies, strengths and weaknesses. They share one weakness, which is that their core business is in a mainly saturated enterprise market. All of them want and need to play their strengths, while mitigating their weaknesses in order to become the dominant player. Looking at Salesforce, one of its key strengths is the brand. Right or wrong, pretty much the first name that comes to mind when thinking CRM is … Salesforce. And sure, Salesforce builds good, sometimes even great, software, based on a strong business model. And where there is a need, the company is strong enough to buy leading players, like ten days ago Cloudcraze and now Mulesoft. There are some weaknesses or risks, though:

• Salesforce focuses on CRM, which might end up being a corner
• It is hard for enterprise level companies to scale down to become more attractive to SMBs. Salesforce addresses this e.g. with Salesforce Essentials. Mulesoft can play a role here, too.
• While Salesforce is profitable, it is not that profitable with an EPS of $0.26 according to the FY 2017 annual report. With a relatively high price point this is a risk factor. Salesforce battles this by staying a thought leader, delivering best-of-breed applications, and now strengthening its integration ability.
• The many acquisitions need integration, so do seamlessly connected processes that digitally transforming companies require and demand. Here Mulesoft comes into the picture.
• Last but not least, Salesforce is challenged getting at sufficient data to feed advanced machine learning models. Here Mulesoft will again play a role

My PoV and Analysis

This acquisition is a defensive move – a strong one, but still a defensive one. It fortifies the position while enabling Salesforce to address some of its challenges that I laid out above. For Salesforce it is necessary, even mandatory, to be able to seamlessly integrate into the application systems of other vendors. CRM and the plethora of applications around, is not and never will be the core application any company on this planet runs. It is important, yes, but an ERP is more important. Salesforce is not an ERP company. Salesforce is closer to the saturated enterprise end of the market than to the underserved SMB end of the market. Salesforce does not have the wide and powerful access to data that the core competition has. And data nowadays is truly King. Salesforce has strong, very strong, competition. Salesforce is clearly aware of all this. And then it cannot be denied that currently there is a need to connect applications that live in different clouds. Besides becoming the default plumbing between applications that are built on the Salesforce platform(s) and acquired applications that are not, Mulesoft can become the foundation for a platform of platforms that bolsters the claim of ease of integration. The first three challenges above can clearly get addressed by Mulesoft. How big an opportunity (or threat, if this was a competitive bid) Salesforce sees can get estimated by the price the company is willing to pay. But the main reason for the acquisition seems to be around the word data. In the words of Benioff: “Together, Salesforce and MuleSoft will enable customers to connect all of the information throughout their enterprise, across all public and privat clouds and data sources …”. This statement clearly not only addresses first party data but also third party data and hints into connecting to social media. Identity, profiles, and of course consents, are a main topic here. Will we see a CIAM acquisition next? The company is clearly playing a combination of ‘best of integration’ with ‘best of breed’ game. The integration part ring fences the application part, while making them more attractive with its ability to dig into data. And oh, it also helps with the price point. Really, a strong move. Strong enough? Time will tell.

The most important tool that enterprise software vendors have in their respective arsenals is their platform. While Vinnie Mirchandani rightfully states that Enterprise Software Platforms have so far underwhelmed, Denis Pombriant proclaims them the new battleground. In my opinion it is not that new a battleground but as part of the Clash of Titans it is becoming more evident as a battleground. An enterprise software platform was always part of the battle for dominance in the customer engagement – or putting it into (marketing) industry lingo – customer experience market. It is actually an integral part of it. This is largely because of the ongoing commoditization of transactional business applications. But it was sexier to talk about shiny topics like engagement and experience than to talk about the grease and the machinery behind that drives and enables the technical delivery of engagements – note, that there are systems of engagement, but there is nothing like a system of experience. And now topics like chatbots, machine learning, AI, ambient computing, IoT, to name a few, made the machinery – the platform – the new black.

A – perhaps not so – brief history

When looking at the broad topic of CRM, customer engagement or customer experience, we have seen a lot of change happening since the early days of Sales Force Automation, SFA. Back in the early 90s one of the first topics has been SFA, with a focus on making a distributed sales force more effective and efficient. Contact management came even earlier, call center software and field service quickly followed. The emerging industry was dominated by little players that mostly got acquired by bigger enterprise software companies (anyone still knows a company called Kiefer & Veittinger?). Essentially we lived in a best-of-breed world. Nobody really talked about user- or customer experience. Times were all about efficiency. But what happened was that these point solutions brought an improved customer engagement, and with it an improved experience. Sales cycles shortened, got more predictable, which led to increased customer satisfaction overall. One of the players, Siebel, stepped up the game by coining the term Customer Relationship Management, CRM, and with it came the solution suite that increasingly covered all areas of CRM: Sales, Service, and Marketing. The advantage was clear: Having a highly integrated system not only allows for more efficient internal collaboration but also enabled one consistent face to the customer – better engagement possibilities and therefore potential for improved experiences again. The first real protagonist of this was SAP, but let’s not forget Oracle. In the mid 2000s Cloud Computing fully arrived, or rather took off. One could say, that this was also propelled by Salesforce with its then disruptive Software as a Service model. With this model we arrived at best-of-breed software again, as nimble SaaS players could offer quick solutions for departmental problems, something the big software houses could not do – nor did they want to. SaaS was born, and with it came the possibility to nimbly react to increasing customer demands, which in times of social media and the communications revolution that mobile devices caused, came very handy. The big incumbents realized this, too; some faster than the others. All of them, SaaS players or not, had their own development platforms, with different strengths, with or without own databases. This is important as it allowed them as well as their partners to efficiently enhance their software to offer more specialized functionality. Again, without talking about it, one result was better user- and customer experience through improved engagement. At the same time players like Google started to offer their environments as development platforms, too. PaaS – platform as a service was born. Add a vast number of little players and great software that got built using available open source technologies only. Shortly after, with the arrival of AWS, Infrastructure as a Service became a hot topic. However, a problem arose of all this, too. The many SaaS applications that were built using the different technology and development platforms had a hard time integrating, which ate up a lot of the advantages the SaaS applications themselves offered. Consistent engagement, and with it customer experience suffered. To address this, middleware services became part of PaaS offerings. Additionally there was also an increasing trend of consolidation on a smaller number of offered platforms, increasing the economies of scale for all involved parties. As a side effect the suite reappeared on stage, but with a twist. Instead of being a kind of supermarket it had converted to something more like a mall. Specialized software was integrated via a (fairly) common data layer, based upon one platform. While this is not entirely true you get the picture. This happened towards the end of the first half of the 2010s, and, along with increasing commoditization of enterprise software, gave birth to the ‘platform war’. Just that, sticking to military terminology, CEM, CEX, Martech, etc., have been the proxy wars. In came topics like chatbots, AI, machine learning, IoT, ambient computing. And this brought the platform topic into the foreground. A well-architected and comprehensive platform is the foundation for integrated business processes. This, in turn is the precondition for being able to deliver great engagements and therefore for the end customer to perceive a great experience. There is no experience without engagement. The platform is the customer experience platform.

But wait, what is a platform?

Now, this is a good question! There are probably as many definitions as there are enterprise software and infrastructure vendors. And these definitions are largely based upon the vendors’ legacy and core business. The industry largely distinguishes between two layers of platform:

• Infrastructure – IaaS
• Software – PaaS (and to some extent SaaS)

Infrastructure is the skeleton

While IaaS is fairly simple (no disrespect meant) as it mainly deals with the many hardware aspects of a distributed cloud platform, it is challenging on its own. And, supplying the compute, storage, and networking abilities, IaaS is literally fundamental. That makes it a part of the platform to reckon with. IaaS is a core element of Oracle’s strategy, and increasingly gets Microsoft’s attention. And then there are players like AWS, Google, Ali Baba, IBM, Rackspace, etc. that are providing cloud infrastructure to businesses as (a part of) their main business. The importance of IaaS is evidenced by all major enterprise software vendors heavily investing into their own datacenters. Although infrastructure is a commodity it is a commodity that the big software vendors are depending upon – at a scale that makes them vulnerable.

Software are the muscles

PaaS is more complex than IaaS. It is the foundation for building thriving application ecosystems. It therefore needs to supply all services that are needed to efficiently build, deploy, sell, and manage business applications and business application services (aka micro services). It also needs to provide the foundational services that enable business application developers to concentrate on solving business problems. That’s why analytics, IoT services, machine learning infrastructures, AI services, middleware, database engines, and much more, are part of it, too.

Choose your platform wisely

It is the software platform that lays the foundation for being able to consistently engage in a way that can deliver positive experiences. The IaaS part of the platform makes sure that the software platform itself can deliver with low latency and the performance that is necessary at any time. The ability to consistently engage in a way that can deliver positive experiences is why especially the PaaS platform is that important. And then there is the challenge of on premise software and/or “private clouds” as well as increasing regulatory pressure that places demands on the storage location of data with the latter becoming a non-issue soon, as every significant IaaS vendor will be able to support upcoming regional legislation – doing so is a matter of survival for them. The other matter of survival for them is whether and how they can attract business workloads to their infrastructures. And this means partnerships. No big enterprise software vendor – who all provided PaaS – will make itself dependent on one single, or only two IaaS providers. Which means that the software platform will remain the decisive factor. Of which we have largely four: Microsoft, Oracle, Salesforce, and SAP, discounting for specialists and ambitious startups like Freshworks or Zoho, amongst others.

So, which platform to go for?

As bland as it sounds, this is an individual decision. There is no one size fits it all. The main criteria are:

• Fit to the existing (on premise) back end
• Fit of current offering to current needs
• Fit of offering in 3 years to perceived needs
• Adaptability to changing needs
• Ecosystem
• Willingness to accept a given IaaS by choosing a PaaS
• Cost

The four vendors have very different strategies. All of them have their own infrastructure, but Microsoft and Oracle strongly prefer its own, while Salesforce and SAP are partnering, which also helps drive cost down. Microsoft, Oracle, and SAP are full suite vendors, with offerings covering the full value chain, while Salesforce concentrates on the customer side of processes. Microsoft on top of this has a strong productivity suite and essentially ‘owns’ the office. Microsoft, Salesforce and SAP are running thriving ecosystems, with Microsoft and Salesforce clearly having an edge over SAP. Oracle is less strong. All four are investing heavily into important technologies like machine learning, blockchain, VR and AR. Oracle’s investments into AI based database security is something unique in this area; until Microsoft goes that route, too – followed by SAP, which has least data on database attacks – but likely lots on attacks on the application server. Microsoft, followed by SAP have best access to data, Microsoft via LinkedIn and its stake in InsideSales, SAP via the Ariba network and now Gigya.

Tl;dr – Which platform will win?

In brief: The race is on. My personal view is that Microsoft, Oracle, and SAP have an edge over Salesforce, as these companies offer more of the value chain, in breadth and depth. Salesforce, on top of it, is not overly profitable. The company surely provides high value, but also at a high price. What if other vendors provide (or are perceived to provide) similar value at a lower price point? After all one major driver for a move into the cloud is lowering cost. On the other hand at least Oracle and SAP, probably even Microsoft, can learn from Salesforce about eco systems.

My advice?

Look out for what Microsoft is offering, especially if you are not (yet) a large enterprise but consider yourself upper end of mid market. If your concern is the whole value chain and you want to grow, look for SAP. Look for Oracle if you are an Oracle shop. If your main, or only, concern is customer engagement, have a good look at Salesforce. But always keep your existing infrastructure in mind.  

The News

On November 27 SAP and Microsoft announced a new level of their strategic partnership. Their key messages are that

• S/4 is fully ready to run on Azure
• Microsoft is committed to SAP and will upgrade its internal financial systems to S/4 on Azure
• SAP will move a dozen (unspecified) “key internal business critical systems” to Azure
• SAP and Microsoft will “co-engineer, go to market together with premier solutions and provide joint support services to ensure the best cloud experience for customers”
• SAP and Microsoft will both provide documentation about their internal projects “to provide customers with guidance and enterprise architecture for deployment of SAP applications on Azure”

Of course it is not much of a surprise to SAP “connoisseurs” that SAP is not running its business on just one instance of their own S/4 systems – still, twelve is a fairly sizeable number to migrate to Azure. It is also not much of a surprise that Microsoft is an important and committed SAP ECC customer. As such Microsoft, of course, has plans to upgrade to S/4. All in all this is the long due follow-up announcement to the 2016 SAP and Microsoft announcement of “empowering organizations to advance their digital transformation”. Back in the day I wrote that this announcement shows a lot of potential for the customer and that Microsoft likely will have more advantages to Microsoft than for SAP. In 2016 the announcement was also about Fiori. There is no word about it anymore today. As an interesting aside, Microsoft announced that it will use Azure AI (Cortana) and it’s analysis services for “more efficient financial reporting and more powerful decision making”. This, of course, offers them a cross-sell opportunity as Azure AI, if working on their own systems, can be productized easily.

The Bigger Picture

I do not remember that SAP has made a joint announcement to this depth with AWS. An additional swipe at AWS is that this announcement got made on day one of AWS re:INVENT, which is one of, if not THE premier AWS conference. This is a fairly clear sign that, while SAP pursues a multi cloud strategy there are clouds that may be more important to SAP than others. And vice versa, that there are business workloads that should be more important to the IaaS providers than others. Salesforce has announced a deeper cooperation with Google as major news the recent Dreamforce 2017 conference, as I covered in my analysis of the event. Oracle still prefers their own cloud services, although it is possible to run Oracle on AWS. While SAP runs its own cloud with sizeable investments this announcement also sheds a light on SAP not being an IaaS player at heart but having its core on the application level, meaning PaaS and SaaS. Yet. The buildup of a global IaaS infrastructure is not only expensive (as one can regularly see and hear in SAPs quarterly reports and analyst briefings) but also takes time. While SAP runs data centers all over the world the company is certainly behind the key IaaS players. And I am not clear about whether SAP will (want to) run non-SCP applications in its cloud. All this indicates a continuing trend of the software powerhouses away from AWS:

• Microsoft, Oracle, and Salesforce do not really need AWS
• SAP and Salesforce are running multi cloud strategies that do not seem to have a focus on AWS

And then we didn’t even talk about the Alibaba cloud. The build-up of camps has not only begun, but also intensified. “Commonwealths of Self Interest” are emerging.

MyPOV and Advice

The announcement of SAP and Microsoft is backed by not only one or two, but four joint customers of global reputation: Coca Cola Company, Costco Wholesales, Columbia Sportswear, and Coats. Apart from this being a fairly high number it also is a strong indication that this announcement is not a shoot from the hip but well prepared and bases on (beta) tested functionality. An observation that almost has the quality of a running gag by fellow analyst and friend Holger Mueller in his analysis is that these customers’ names all start with a ‘C’ and hence may be only a part of the full list of early customers. But more to the topic it is certainly a sign that SAP is migrating a good number of their key internal systems from their own (or their subsidiaries!) data centers into Microsoft’s. The sign is that SAP itself is convinced that

• The cost of running their applications on Microsoft is not more expensive than using their own data centers
• There is no real focus on becoming a key IaaS player themselves
• Microsoft is a key contender for the top spot of running heavy business workloads securely and in a scalable way

SAP with this move basically confirms my view that Microsoft will become the key IaaS provider for larger business workloads in front of AWS. Microsoft’s announcement of using its own Azure AI to improve decision making opens a few interesting scenarios. First, it offers options, after Microsoft connected Azure AI to S/4. Second, and more interestingly, Azure AI can become a part of SAP Leonardo by embracing its capabilities. Connecting Azure AI to SAP systems opens up a treasure trove of additional data that SAP does not have access to. This data can be used in all sorts of marketing, sales, and service scenarios – as well as in-house scenarios. It will be interesting to watch this space. SAP customers should now evaluate their options and compare the associated cost, cloud viability and migration options.

• No or private cloud
• Public cloud, and if so, which one

Especially businesses that are heavily invested in both, SAP and Microsoft, could likely benefit from running SAP on Azure. We are no more talking about reliability or security. Effectively cloud delivery is at least as reliable and secure as running IT in house. With an emphasis on “at least”! On the longer run companies should look at whether they could leverage brokering systems that enables them to shift their workloads from one cloud to the other depending on current pricing. Being able to use different clouds also has an advantage in disaster recovery – it is highly unlikely that two clouds go down at the same time.   https://aheadcrm.blogspot.de/2016/05/love-is-in-air-sap-and-ms-deepen-their.htmlhttps://aheadcrm.blogspot.de/2017/11/salesforce-embraces-user-microsoft-like.html  

The fall conference season is in full swing. Of the big 4 we had Oracle Open World and the SAP Hybris Summit, with the Salesforce Dreamforce, SAPPHIRE, and Microsoft Connect() still to come. I have covered the SAP Hybris Summit, so do not need to say much about it anymore. The event was short on great announcements – maybe they will come at SAPPHIRE – but certainly contributed to showing the clear vision forward that SAP has. And it is a compelling and consistent vision. OOW 17 was a different beast, most notably with the announcement of Oracle 18c. A year ago Oracle took Amazon full on, declaring it enemy number 1. Many analysts, including myself, were confused about this. Why Amazon and not Microsoft? After all Microsoft is the company that has a very credible IaaS, PaaS, and SaaS. Add the operating system and productivity software and you have a company with a formidable software stack that can be on the winning side of a Clash of Titans. While CTO Larry Ellison still took pot shots at Amazon in his keynotes, one can come to the conclusion that these are a kind of diversion, and that Oracle is back in best Musashi style.

Oracle steps up its IaaS game

The AI driven automation of Oracle 18c is game changing in the database play, and hence in IaaS. The new container engines should bring Oracle’s cloud on par with AWS and Azure. All three, Microsoft, Salesforce, and SAP now have something to chew upon. SAP, because their databases are now lacking a real important argument. And that has an impact. SAP, for example, should feel more heat when it comes to HANA, the only database that is supported for S/4. Salesforce, being a big Oracle customer itself should feel some pressure when it comes to who they partner with when deciding about additional data centers. Faster and cheaper than AWS is a pretty compelling argument. Along with the full software stack and the IaaS capabilities Microsoft is taken full on. After all Microsoft is Oracle’s competition when it comes to business workloads.

Oracle has arrived in the Cloud world

It looks like Oracle’s Fusion project has finally brought a suite of cloud native business applications. This means that all big vendors now can concentrate on coercing their customers from an on premise world into the cloud world – not that Salesforce needs to do that, but you get the point. And with the claim that business applications run fastest (and cheapest) in the Oracle cloud there is quite an interesting argument out there. This is less a problem for Microsoft and SAP, as they have customers using their suites, which tends to be a good defensive line. However, it is a real problem for Salesforce with a focus on the wider area of CRM, without own database capabilities and with a low focus on IaaS.

Oracle has understood that AI in itself is not of value

Oracle now seems to consequently put the business purpose of AI and machine learning into the foreground. AI in itself is nothing. It is a tool that needs to be brought to a use. There are more and more ‘prebuilt’ AI (and IoT) applications that are intended to deliver business value. This gets emphasized by applying machine learning to the database itself and to the security software. Add conversational capabilities to the software and a story emerges. Oracle has closed the gap to the competition in this area and is at least ahead of SAP in the conversational department. SAP still relies on partnerships although it has the technology in place.

Now, what does this mean for Salesforce?

Last year’s big thing was Einstein, which was a clear statement about the importance of transparently embedding AI into business applications. Salesforce being a company that time and again proved that it is able to set the pace for the whole industry, it can be expected that there will be some relevant announcements. And there need to be, because Salesforce is in a tight spot. Probably for the first time in its history.

• The platform needs a renewal
• The company does not have the infrastructure capabilities that the competition has. Here clearly Microsoft and Oracle have the edge.
• Salesforce depends on Oracle’s database, which means subsidizing the competition. On top of this Oracle just announced that Salesforce applications will not run on their best performance, as they are not running on Oracle hardware (AWS is not using Oracle HW, as far as I know).
• At the core Salesforce is a CRM company. This leaves a lot of important processes out of scope. And, being a CRM guy myself, I’d argue that it is far simpler to replace a CRM system than an ERP system.
• With its focus on CRM a lot of the data that is necessary for well running, AI driven IoT applications is missing. I’d say that SAP has the lead here with a staggering 76 per cent of all transactions touching SAP systems. Salesforce is comparatively week in first party data management.
• Salesforce lost out on LinkedIn, didn’t pull through with Twitter (the price was agreeable too high), and now additionally got put on the back foot with SAP acquiring Gigya. This seriously limits their profiling and therefore recommendation capabilities.
• The company buys growth on the expense of profitability. Sooner or later investors will not accept this anymore.

Given this, ‘ticking off accomplishments promised and now delivered’ will not be enough.

A Way Forward

In my eyes, Salesforce’s biggest strength is the ecosystem, which the company probably let erode somewhat. At least I heard a few statements of Salesforce software partners that Salesforce doesn’t really seem to care anymore. If the same company then says that it is easier to deal with SAP that is telling. So, I would expect Salesforce doing something around partnership, probably getting closer to the gold standard: Microsoft. There also could be some partnership announcements around strengthening industry solutions, also to cover the challenge described next. Supporting this, there should need some strong moves in the platform area. The big 4, as well as some other companies, are striving to become the fabric that permeates a business, and connects it to its suppliers and customers. Salesforce is strong on the customer side only, which opens up a weak spot that needs to be guarded. Second, up to now Einstein seems to be embedded mainly in point solutions. What in this case is missing is a number of engines. For example an engine that can power profiling and recommendations across clouds. But one can think of a good number of intelligent helpers for salespeople as well. In general I’d expect some high profile announcements around machine learning, bots and, hopefully, conversational interfaces – ideally interactive voice interfaces. I didn’t hear much of Bob Stutz in the past 1.5 years, and cannot imagine that he idled. Maybe we are in for a surprise. So, lets look forward to Dreamforce 2017.  

On Mach 8, 2017, SAP and Google announced another marriage in the cloud during Google’s Cloud Next event: SAP HANA is certified on Google’s Cloud Platform GCP, and is generally available now. SAP Cloud Platform and more products and solutions are to follow. The Google Cloud Launcher marketplace will be utilized to offer and deploy to and for customers and partners, starting with SAP HANA, express edition, which is already available, too. Further topics that are covered by this partnership are

• Improving Google’s containerization technologies for enterprise workloads
• Security, privacy, and integrity of customer data in the cloud. As part of this SAP software shall act as a data custodian (NB: How that works in legal and political environments remains to be seen) and joint solutions for access control, governance, risk and compliance shall get developed
• Integrate Google’s G Suite into SAP applications. This has already been implemented for Identity and Access Management.

More on the still fuzzy side are end-to-end integrations and collaborations in the areas of AI and machine learning. True to the SAP mantra of being an ecosystem player this is all about choice – choice for the customer to implement what is best for them.

My Take

Another interesting one!

Good Win for SAP

SAP now covers all major cloud platforms. HANA is now certified on AWS, Azure, and GCS, apart from running in the SAP cloud. With this SAP now has the broadest footprint when it comes to running on an IaaS platform. With the SAP Cloud Platform being available soon there also will be a very powerful PaaS solution on one of the strongest IaaS. It is interesting that there is no mention of the legacy software (SAP Business Suite) at the moment, although with HANA running on GCS it should be possible to migrate a Business Suite installation to GCS – as long as it runs on HANA – in near future. Another interesting aspect is that in the productivity arena there are a few overlaps between the G Suite and SAP solutions – think SAP Jam vs. Google Hangout. How easy will it be to use Hangout instead of (built in) Jam in future? Is that interesting for Google at all? However, far more interesting are the allegations of future potential: Bernd Leukert explicitly mentions end-to-end business processes and machine learning with some next announcements to be expected at the next SAPPHIRE NOW. For SAP this is where the real juice is: Like Salesforce and Oracle their CLEA solutions predominantly rely on company internal data and lack the far reach of external data. This is where Google (and IBM Watson) step in by their ability to contribute relevant insight from the outside. So, this partnership essentially closes a gap between SAP and Microsoft – while giving an edge above Salesforce, who just announced an AI partnership with IBM Watson, which on top cannot be expected to be targeted towards CRM types of applications as well. Lastly, GCP provides an ideal bed to run and scale IoT applications with their expected throughput- and scalability requirements.

What about Google?

Google gets an industry heavyweight to provide load on their infrastructure. Especially, if existing on-premise customers can get incentivized to migrate from their still predominantly Oracle-based instances to HANA based GCP instances; this can become a big one, as there are still tens of thousands of these instances available. Think the joint effort into containerization here … And the availability of SAP HANA Express Edition and soon the SAP Cloud Platform should drive a good number of developers onto the Google cloud. Additionally, it gives Google the opportunity to penetrate a Microsoft fortress: Microsoft Office is still very much a synonym for productivity apps in Enterprises. Lastly, and probably most importantly, the AI angle. Business AI needs both: Insight from inside the company and from outside the company. Vendor owned and driven AIs have a hard time delivering this. With the notable exception of Microsoft. Companies like Google, Facebook, Apple, Baidu, Twitter,… and some specialized on business intelligence sit on an asset that enterprise software vendors desperately need. So, these might be the secret winners of the enterprise software clash of the titans. So, overall there is a big gain for Google in Enterprises looming.

And the competition?

There is a fight for dominance going on in Enterprise software. With Microsoft, Oracle, Salesforce, and SAP here are four main tribes. In general terms of enterprise software this partnership gives SAP some more headway against the strong competition, especially if SAP also gets their ecosystem strategy implemented somewhat better – they still are fairly hard to play with. On the CRM side this tack brings them closer to Microsoft and Salesforce. The race goes on.

Last but not Least: The Customers

All around good. Especially as it seems that this was a customer driven (Colgate Palmolive) innovation. SAP offers most choice but also needs to offer some guidance when it comes to choosing. Given that SAP or their implementation partners deliver this guidance, there is considerable gain in this partnership: Additional competition in infrastructure, more possibilities in productivity, and so on. For customers it all boils down to being enabled making the right choice.

On January 24, 2017 SAP released its results of their fiscal year 2016 – and the fourth quarter thereof. In a nutshell SAP:

• Delivered to its increased 2020 guidance
• Had an increase of 31 per cent in cloud subscription and support revenue, while still being able to increase the software license and support revenue. Cloud revenue increased especially in Q4 and promises to stay at a high level with a very healthy backlog
• Increased its full year operating profit by 20 per cent to 5.12 Billion Euro (IFRS)
• Has a strong backlog of cloud bookings

This success has a slightly negative effect on the company profitability while it negotiates the shift from license revenue to subscription revenue while being in an investment mode. It, however, seems to be driven by an increasing adoption of S/4HANA, a strong increase of the Hybris set of CEC solutions, including e-commerce and increasing traction in the HCM space. So it is broad. Based upon the strong delivery of 2016 SAP expects the cloud business to increase by up to 34 per cent in 2017 (all numbers of course at constant currencies) and increases its guidance of revenue and profit for 2017. In line with this the company is also bullish in its mid term outlook to 2020, which it increases, too.

My Take

Of course the big increase in revenues, expressed as a percentage, is partly owed to the fairly low number. In comparison Salesforce reported 2.14 Billion dollar for their third quarter alone, as opposed to 2.99 Billion Euro for SAP’s fiscal year. Oracle reported 798 million dollars in their FY Q1 report, so should be roughly on par with SAP. Unluckily it is hard to compare Microsoft numbers as they mix their cloud and business software numbers differently and they did not give numbers other than a 13 per cent increase for the Dynamics range of products. Still it seems that SAP has finally found a strategy that the company is able to express convincingly and execute upon. I think the below diagram taken from the release slides shows it pretty succinctly. Based upon a strong platform – the SAP Cloud Platform – SAP helps its customers to use insights to fuel transactions to gain more insight. Customer experience is only one piece of this picture, which correlates with my observations over the past 15 or so years. It also correlates with what then board member to be Bernd Leukert told the attendants of the Wispubs SAP CRM event in Orlando: “SAP is a Supply Chain Company”. Very much to the dismay of the attending CRM people, I must say. The focus of SAP clearly lies within the company and its supply chain. Add security, and industry orientation then one sees a company that is all about business processes and their effective and efficient execution. Published APIs are key for a thriving ecosystem, machine learning and blockchain represent technologies that open further avenues down the road. SAP Digital Business Framework - Source: SAP Sensors and the (Industrial) Internet of things are playing a major role here. SAP acknowledges and embraces this with its massive investment into what has become Leonardo. There is a notable topic absent on this diagram. Artificial Intelligence. This is a strong statement, as I cannot imagine that this is by accident. It is also straightforward. For SAP the intelligence lies within the applications. What is important is the input – loads of data – and the ability to provide and deliver models that can be trained to support specific business processes – machine learning. In any case this absence turns the minds away from a hyped technology to being outcome driven. AI is a means to an end. Simple as that. Friend Paul Greenberg recently searched for Optimus Prime. I think SAP now has established itself as a very strong contender – although I would still be very wary of Microsoft. The company shows a vision for its customers that embraces the whole value chain, with a focus on internal processes and the supply chain, but not neglecting customer facing processes. Combining the technologies that it created (and acquired) over the past three to five years to business applications that enable a real time ‘control’ and intelligent forecasting abilities, combined with efficiency gains is a very compelling vision for business leaders. I am looking forward to observing SAP in the coming years.

On January 10, 2017, SAP announced a bundling of their IoT portfolio of initiatives to focus on business outcomes instead of technology while combining the set of emerging products and solutions under the brand name Leonardo – as in Leonardo Da Vinci, one of the most forward looking artists and innovators ever. This announcement substantiates SAPs commitment to invest two billion Euro in IoT over the next 5 years. The new portfolio will combine adaptive applications, big data and connectivity as packaged line-of-business solutions, covering a range of topics. It bases upon a rebranded – and repackaged(?) HANA Cloud Platform, enhanced by the micro services for machine learning that were announced earlier and which I covered here. This enhanced platform is now called SAP Cloud Platform. As per a blog post accompanying the Leonardo announcement, the high level architecture of SAPs new offering looks like below and covers, besides a set of existing applications

• an IoT adapter – SAP Leonardo for Edge Computing – which serves as a device independent data input layer, essentially a kind of middleware, probably built on or using HCI.
• a foundational layer – SAP Leonardo Foundation – which includes the IoT business services that are to be exposed, enabling rapid development of applications. This makes up the functional core.
• and a ‘bus’ layer – SAP Leonardo Bridge – which enables the combination of real time data with applications and processes

Leonardo High Level Architecture - Source: SAP Leonardo is accompanied by a jump-start enablement program to accompany this initiative. This program includes introductory pricing and is intended to help organizations identify and validate IoT pilots and use cases, including expert staffing and using design thinking methodologies, thus easing the first IoT steps. Of course there will be a launch event to bring together customers, partners, and experts, showcasing innovations and strategies. According to Tanja Rueckert, EVP Digital Assets and IoT SAP with Leonardo connects “things with business processes and with people”.

My Take

This was long overdue. Overdue not only from SAP, but from any and every vendor. IoT is a means, not an end! As Brent Leary very recently said in a podcast with SearchCRM, IoT is still trying to make its way to provide value for businesses. This is imho due to the IoT market being vendor- and technology driven. SAP now takes the lead in tightly integrating technology into business process, and to show a clear path to business value. This fits neatly into the core of SAPs overall value proposition as an enterprise software company and it nicely combines numerous technologies and services that have been developed by SAP in the past years into a holistic piece that can deliver business value. I see this mainly as a rebranding instead of something net new, although there are some new pieces to this solution portfolio. This is also a bit of a concern. SAP now needs to keep up the momentum and deliver new intelligent, IoT based business solutions. What is interesting is the (important) combination of IoT and machine learning, which is mentioned only in the blog post, and which has the potential to make a real difference, e.g., when it comes to distributed intelligence. As a final word of caution, SAP only announced introductory promotional pricing. This means that there are still important open questions about pricing overall, which should be a worry for customers. However, overall this is good news for customers, as with this portfolio of services and technology every IoT investment can be tied to a business case and then business value. I expect that other big vendors SAP clearly takes a thought leadership position here, if not a technology leadership position.