Last Person Standing

Albert Einstein said, “The measure of intelligence is the ability to change”. With change being a constant in the world of ERP the past 30 years, SAP battled to be an undisputed leader. In the next 5, who will be their biggest challengers? This is a personal view not shared with or by my employer, with a limited focused scope on large European enterprises.

Let me begin with the mid-80’s and early 90’s construct:

In the world of mainframes and AS/400’s, SAP was only a challenger to leaders with a number of rivals. Anyone who has been as long as I have in the industry, will remember making selections between JDE, MAPICS, SAP, Peoplesoft and some other long forgotten solutions of that era. 

The years to 2000, saw a convergence in selections more often than not, between Oracle and SAP, with PeopleSoft popping up for HR but SAP steadily but surely cementing it’s spot as the ERP of choice, although notably in the public sector Oracle was a force to recon with.

From 2000, the next decade was less about the core ERP but everything around the core – Data warehouse, planning, CRM, e-Procurement, Asset Management etc etc. SAP made a pretty good fight in their installed base but found it harder outside their base. Notable areas of real competition were Seibel for CRM, and Hyperion for consolidation etc. I2 in planning. Microsoft tried their hand as well. But most notably Cloud was more than talk by the end of the decade, with Salesforce sitting plum and poised as an inspiration for the start of a whole new game and pace of change.

The past ten years has seen an exponential rise of the cloud players Salesforce, Netsuite, Coupa, Oracle Cloud, Anaplan, Infor, and of course, Workday. The rules of the game, pace of competition, and shifts in dynamics of market share has been fierce but longevity of every entrant was tested, resulting in players focusing on their niche but not moving into new areas (for example MRP and GL). Result - the market has been segmented and in the SME area there are some very strong players.

Thumb rule dictates, there have always been and are and will always be some customers that will choose other ERP’s because they don’t want to work with SAP and see something in the product that really hits their sweet spot. Also, a constant thru these 30 odd years is the fight with large custom build projects and bespoke development in SAP. The past few years, I think, the trend for enormous custom builds has gone with cloud native and not SAP (disappointing armies of developers and business analysts). I am not a huge fan of bending the SAP core out of shape, so I don’t see this as a good fight to win in any case.

My prophecy for the next 5 years? I think SAP will move from the traditional battleground of other ERP/CRM players, to cloud native development and data lakes of the hyperscalers. Maybe SAP will be at the centre of a client, but the battle between being dynamic or being more a repository of transactions and master data standards etc. is anyone’s bet! 

If someone had asked me this question 5 years ago, I would have predicted Salesforce and Workday as the big rising competition for SAP. I suspect this is now invalid, so who do you think SAP will really compete with in 5 years’ time? For the SAP ecosystem I think it’s an important wakeup call. Don’t feel secure thinking your clients will never throw out SAP and replace it with Oracle or Workday, we will all struggle to find interesting work if SAP simply becomes a place where transactions and GL accounts are stored, while the action goes on elsewhere else!