Trying to Decipher SAP
I have worked in the Enterprise software space for over 20 years and rarely am I confused about what a vendor is doing. But I have a question that I can not answer - what's up with SAP?
I just don't see them in as many of our software selections anymore. And my colleagues around the country say the same thing. I am open to your comments - if you see something different, please let me know.
I DO have a suspicion, for all of the reasons you probably already know and maybe have experienced with SAP. But that's not the real mystery.
The REAL mystery to me is what is SAP doing with the $1,400,000,000 profit they generated JUST LAST QUARTER and why haven't they made more traction in the ERP cloud space with that much free cash flow behind them?
Some may say it's a classic tale of the Innovator's Dilemma. Could be. But I don't think so. I think the people at SAP are very bright and could spot that a mile away.
Others may say they are just too big to change. I don't buy that either. Again you hire super smart people and pay them a ton and THEY WILL will get the right product to the market, no matter the barriers, usually.
So I don't pretend to know everything especially in the complex world of enterprise software. But I do know a lot. Yet SAP is one vendor I just can't decipher.
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8 年Perhaps we can glean additional insight by taking a closer look at the earnings call slide deck that supported their Q2 report out. When I look at the slides, what stands out in the results is that in two of the last three quarters including this Q2 report, is that the company has been able to achieve growth in legacy licenses as well as rapid growth in the cloud. Q2 cloud revenue accounts for $792 million out of total revenues of $5.3 billion. Notably this has been achieved despite the fact that SAP today still does not offer a suite of seamless end-to-end cloud applications. Thus much of what SAP reports as cloud revenue is driven from its prior cloud application acquisitions. Ariba, Concur and particularly SuccessFactors have all continued rapid growth rates since becoming part of SAP's suite of cloud offerings. So where is exactly is all this growth (both cloud and non-cloud) for SAP happening? Looking at the slides the first thing that jumps out at me is that the growth is not happening in North America, well, let me clarify. Regional performance for SAP is reported as "Americas", "EMEA" and "APJ". It is quite notable that "North America" is simply reported as being "solid" and "on track" where as every other geographic location, even Latin America, where political and macroeconomic instability continued, reported double-digit growth. In particular APJ is the true stand-out in growth with double-digit growth both across China and India as well as phenomenal triple digit growth in Japan. So SAP is on the move and hitting it heavy, just not here in the US. My bet is that while SAP may continue to appear slightly sluggish/conservative here in North America, SAP is going to go gangbusters with expansion as well as a probable new acquisition in APJ, particularly in China, where manufacturers are in the midst of major optimization This is further underpinned by SAP's recent partnership with AliCloud to drive enterprise cloud services and adoption in China. Connected to this, I think we'll also see double-digit growth in Africa for SAP as a byproduct of China's pledge to invest $60 billion in Africa over the next 3 years - much of which will be delivered in the form of newly installed manufacturing facilities across East and West Africa. Either way SAP will certainly capitalize on the relationships they have established with the manufacturers and possible new acquisitions to ramp up cloud computing adoption by enterprises across mainland China and their subsidiaries across APJ and Africa. So to sum it up: SAP. Gangbusters. APJ
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8 年Increased organisational effectiveness almost certainly requires that your ERP, payroll and HRIS applications are integrated and working together seamlessly with many other applications, e.g. expenses, time & attendance etc. This landscape of cloud and on-premise solutions offers an abundance of data, services and applications with which to make informed decisions. Thankfully, integrating these applications has been made easier recently. See here... https://www.dhirubhai.net/pulse/easy-integration-erp-payroll-solutions-simon-berglund