We had the opportunity to attend Sapphire 2016 in Orlando, the event was the usual large show, with similar attendance like last year, an amazing, probably the best in the industry, show floor and massive partner presence. 


Earlier in the week I published my Day 1, Day 2 Keynote takeaways (here and here), before Sapphire I wrote and a News Analysis of the SAP and Apple partnership (here) on the newly announced partnership with Microsoft here. Preparing for this post I also read my Event Reports of Sapphire 2015 (here), Sapphire 2014 (attended, here) and Sapphire 2013 (from the fences, here). If you have 10 minutes to invest, those blogs provide a very good perspective on what SAP’s challenges were, which ones SAP has tackled and which ones remain. 
So check out my event report in video format:

Not much time to read? Check out my 1 slide summary here:

Top 3 Positives

A new, humbler SAP – The Day #1 Keynote of Bill McDermott was all focused on showing that SAP wants to change the relationship with its customers, show more empathy, listen more and overall be a better partner to do business. That’s always a good ‘true north’ for any company, it is interesting the vendor felt compelled to do so – so things may not have been well in this compartment. (Very) successful software vendors always face a challenge in this area, so it is good for SAP to be mindful and take things back. The only concern I have here is, customers don’t know how to move forward with their enterprise automation in the cloud age, so they look for the vendors to tell them. That’s’ not necessarily emphatic, but leadership, though it is always good when articulated in the right tone.

SAP discovers PaaS for the mainstream – SAP finally addressed one of the biggest riddles to me – not one, but two board members (Leukert & Singh) talked about SAP’s PaaS product, Hana Cloud Platform (HCP). Leukert even walked through the three key scenarios that HCP is built for – integrate, extend and build new apps from scratch. Moreover, it was good to see that both Leukert and Singh (later in the executive Q&A) would clearly commit to use the HCP for integration across the various SAP products. That is a welcome departure to the product individual integration mechanics used by the former mySAP xxx products. However, HCP is strategically important for SAP customers, as they cannot expect that SAP will provide all best practice automation for the 21st century in product. Some of that functionality will have to be built by extension of what SAP ships, or even as completely standalone application effort. Hence, my wondering why PaaS was not mentioned before – so today it is good to see that HCP gets the keynote attention that both product and solution require on the customer side.

Partnerships, Partnerships… – After A for Apple comes M for Microsoft – SAP showed (once more) that it can pull off major partnerships – the week before Sapphire it was Apple, at Sapphire it was Microsoft. Both partnerships have tremendous potential to make customer lives better. Board Chairman Plattner even said in his Q&A that this time it would be different – because integration is easier, and adoption is faster due to the cloud. Moreover, both partnerships have significant upside for SAP customers, deep native Apple applications, better productivity using Apple, a largely available adopted cloud IaaS with Azure. Now it is time for all three vendors to execute – as despite there is the cloud today – there still needs to be tangible value for the solutions the partnerships deliver. Nevertheless, early days of course…


Top 3 Concerns

S/4 HANA Adoption – SAP launched S/4 HANA in January 2015 (see my original blog from the launch here) – 17 months later is not too a long timeframe, but surprisingly SAP could not bring a European or North American customer on stage at Sapphire who was live on S/4HANA. Given that inside, S/4HANA is also the much earlier launched Simple Finance product; this begs some questions on adoption. When asked, SAP executives were all on the same positive line: S/4HANA is on track (McDermott), has surpassed expectations (Enslin) and grows faster than R/3 (Plattner). With 3200+ customers sold, 800 ongoing implementations and 160 customers live the product certainly is doing ok, but has so far not convinced the core as well as the lighthouse SAP customers to upgrade. SAP executives thought that a lack of roadmap and guidelines is the issue, and SAP will address that by end of Q2. And while certainly roadmaps are important (see the success & popularity of the SuccessFactors roadmaps) they are not the silver bullet for customer adoption. S/4HANA is the first real platform change for the core ERP offering of SAP – since R/2 to R/3. And things are different now – see the 6 difference on my S/4HANA launch blog here).

Best Practice Challenges – SAP has gotten quieter around ‘copying’ code from the business suite, then simplifying it and making it work on HANA. The concern remains that many of the Business Suite codified best practices are inherited from R/3 – and with that from last century. Business best practices have considerably changed. When e.g. Leukert showed in his keynote that SAP could now help a car manufacturer build an engine every 8 seconds, which is remarkable speed. However, what does it mean for inventory, logistics, supply chain and contract best practices? All these need to change and will be different on how business was done in the 20th century, when things moved at a more pedestrian pace. SAP will have to come up with the customers and thought leaders who are creating, defining, validating and implementing the 21st century best practices and find a way to transfer those into S/4HANA and other products.

SAP has given up on IaaS (and this might be a Positive) – SAP’s IaaS strategy has been confusing at best, starting with SAP Hosting over a decade ago. Confusion between HANA Enterprise Cloud (HEC) and HCP are legendary. In the latest move, SAP announced a broad partnership with Microsoft, which on the IaaS side meant that SAP would support Azure for both HANA and S/4HANA deployments (read my analysis here). For a company that needs every $ from cloud to satisfy the financial projections, a remarkable and courageous move. Probably a wise one, too – as SAP may have realized that it cannot build the next generation IaaS platform with the know how available in house. In addition, SAP may as well have listened to customers, who keep telling vendors that the future is multi cloud. I was somewhat surprised when Chairman Plattner saw a high portion of customers staying on premises, while that is certainly possible, it will be important for SAP to be able to run its most complex customers on a public cloud architecture. Finally, it is good to start with, Microsoft, but SAP will need more partnerships with other IaaS vendors, firstly with AWS (which runs a number of SAP customers in production, in the public cloud already) and more to follow. In addition, regardless SAP will have to continue on its ‘Monsoon’ project – that heavily relies on OpenStack to run its acquired applications.


Analyst Tidbits

SAP Discovers DaaS – We learnt from CDO Becher more about the Sybase 365 based DaaS solution. For someone wondering what SAP would do with the Sybase 365 (see me asking in spring 2013 here) finally an interesting road to monetization, a DaaS (Data as a Service) offering, delivered digitally, without the enterprise sales ‘mini bus’ – is a good move by SAP.

SuccessFactors uses Analytics to foster Diversity – SuccessFactors wants to use ‘true’ analytics to bring more objectivity in HR decisions, a good move certainly, as humans are inherently biased, correctly programed software is not. Thomas Otter and I recorded this video on the topic – look here.

Apple & SAP Partnership – I had the opportunity to catch up with the development on the SAP side, and things look good in regards of execution. Native applications on iOS devices may create the necessary differentiation that could revive iPad sales in the enterprise. Using Fiori design language for it is a good approach. However, SAP will hear questions / concerns from customers to repeat the same on Android, from which they have more in house than iOS (looking at the world markets).

IBM & SAP Partnership – We also had the opportunity to catch up with the IBM / SAP team, and saw a Watson enhanced SuccesFactors application that is being built for a long-term SAP customer. Equally, we saw an improved / enhanced Field Service application, built by IBM, using SAP CRM in the backend, running on an Apple iPad. This partnership has a lot of potential; it now needs to show customer traction.

Vora Framework GA – Vora is one of the most positive developments coming out of SAP, as it keeps the vendor relevant in BigData application use cases, which is the vast majority of strategic enterprise projects. Launched in September 2015, it is good to see the Vora Framework go GA, now it will be key to keep innovating fast and best to leave the Spark only deployment behind.

Key HCP Innovation - API Hub & CloudFoundry – SAP has for a long time described the vision of a network economy, well that needs APIs, and SAP is now finalizing its plans with the API Hub, a good and overdue move. Moreover, developers can now develop natively on CloudFoundry, which has slowly but steady become the standard SAP PaaS platform. Long forgotten are the days when the initial CloudFoundry champions were hybris, and the ‘rogue’ people, but not forgotten by yours truly. A good move by SAP.

Business Objects is ... back - Chairman Plattner joked in its keynote that the SAP BI product portfolio is changing names faster than he can keep track of the name change... and bringing back the venerable Business Objects brand (as umbrella naming of the SAP BI tools) is likely no the latest name change. At least for me Business Objects does not associate with the analytics software needed in 2016 and beyond, I more associate data dictionary and cubes with the brand. Not really high on the agenda in 2016 and beyond. But maybe just me...


A good Sapphire event for SAP customers. The vendor is planning to change its relationship with customers, as McDermott set out on Day #1, and empathy is always a good start. SAP understanding the value of HCP is very good change for customers, too, who have to know that they can extend and build their own applications on a PaaS platform that is industry scale. When they realize that SAP have moved closer to CloudFoundry on the PaaS side, they will welcome that, too. Equally moving to Azure support is also something that will not concern customers too much, as most of them are there courtesy of Office365 anyway.

On the concern side, SAP will need to solve S/4HANA adoption, for me the challenge is less in roadmaps, but in the overall business value of running on S/4HANA, and the business operational implications from running this software. For that, SAP will need the famous ‘lighthouse’ customers in order to address the current gridlock.

But overall a good Sapphire for SAP customers, it is always good to see a vendor making course corrections for the better on the technology side, and the changes for a more prominent HCP, the standardization on integration, the rapprochement to CloudFoundry, the GA of the Vora framework and the move to 3rd party IaaS with Microsoft Azure are all moves that will make SAP customers more successful going forward. So stay tuned for more soon.

Check out a Storify of tweets of the Day #3 keynote below - there is always great insight on what SAP Chairman Hasso Plattner shares. 

More on SAP:
  • First Take - SAP Sapphire Day #2 Keynote - read here
  • News Analysis - SAP and Microsoft usher in new era of partnership to accelerate digital transformation in the cloud - read here
  • First Take -  SAP Sapphire Bill McDermott Day #1 Keynote - read here
  • Event Preview - SAP Sapphire 2016 - What to expect and look for - read here
  • News Analysis - Apple & SAP Partner to Revolutionize Work on iPhone & iPad - read here
  • Progress Report - SAP SuccessFactors makes good progress - now needs appeal beyond SAP - read here
  • News Analysis - SAP HANA Vora now available... - A key milestone for SAP - read here
  • Event Report - SAP Ariba Live - Make Procurement Cool Again - read here
  • News Analysis - SAP SuccessFactors innovates in Performance Management with continuous feedback powered by 1 to 1s  - read here
  • Event Report - SAP SuccessFactors SuccessConnect - Good Progress sprinkled with innovative ideas and challenging the status quo - read here
  • News Analysis - WorkForce Software Announces Global Reseller Agreement with SAP - read here
  • First Take - SAP SuccessFactors SuccessConnect - Day #1 Keynote Top 3 Takeaways - read here
  • News Analysis - SAP SuccessFactors introduces Next Generation of HCM software - read here
  • News Analysis - SAP delivers next release of SAP HANA - SPS 10 - Ready for BigData and IoT - read here
  • Event Report - SAP Sapphire - Top 3 Positives and Concerns - read here
  • First Take - Bernd Leukert and Steve Singh Day #2 Keynote - read here
  • News Analysis - SAP and IBM join forces ... read here
  • First Take - SAP Sapphire Bill McDermott Day #1 Keynote - read here
  • In Depth - S/4HANA qualities as presented by Plattner - play for play - read here
  • First Take - SAP Cloud for Planning - the next spreadsheet killer is off to a good start - read here
  • Progress Report - SAP HCM makes progress and consolidates - a lot of moving parts - read here
  • First Take - SAP launches S/4HANA - The good, the challenge and the concern - read here
  • First Take - SAP's IoT strategy becomes clearer - read here
  • SAP appoints a CTO - some musings - read here
  • Event Report - SAP's SAPtd - (Finally) more talk on PaaS, good progress and aligning with IBM and Oracle - read here
  • News Analysis - SAP and IBM partner for cloud success - good news - read here
  • Market Move - SAP strikes again - this time it is Concur and the spend into spend management - read here
  • Event Report - SAP SuccessFactors picks up speed - but there remains work to be done - read here
  • First Take - SAP SuccessFactors SuccessConnect - Top 3 Takeaways Day 1 Keynote - read here.
  • Event Report - Sapphire - SAP finds its (unique) path to cloud - read here
  • What I would like SAP to address this Sapphire - read here
  • News Analysis - SAP becomes more about applications - again - read here
  • Market Move - SAP acquires Fieldglass - off to the contingent workforce - early move or reaction? Read here.
  • SAP's startup program keep rolling – read here.
  • Why SAP acquired KXEN? Getting serious about Analytics – read here.
  • SAP steamlines organization further – the Danes are leaving – read here.
  • Reading between the lines… SAP Q2 Earnings – cloudy with potential structural changes – read here.
  • SAP wants to be a technology company, really – read here
  • Why SAP acquired hybris software – read here.
  • SAP gets serious about the cloud – organizationally – read here.
  • Taking stock – what SAP answered and it didn’t answer this Sapphire [2013] – read here.
  • Act III & Final Day – A tale of two conference – Sapphire & SuiteWorld13 – read here.
  • The middle day – 2 keynotes and press releases – Sapphire & SuiteWorld – read here.
  • A tale of 2 keynotes and press releases – Sapphire & SuiteWorld – read here.
  • What I would like SAP to address this Sapphire – read here.
  • Why 3rd party maintenance is key to SAP’s and Oracle’s success – read here.
  • Why SAP acquired Camillion – read here.
  • Why SAP acquired SmartOps – read here.
  • Next in your mall – SAP and Oracle? Read here
And more about SAP technology:
  • Event Prieview - SAP TechEd 2015 - read here
  • News Analysis - SAP Unveils New Cloud Platform Services and In-Memory Innovation on Hadoop to Accelerate Digital Transformation – A key milestone for SAP read here
  • HANA Cloud Platform - Revisited - Improvements ahead and turning into a real PaaS - read here
  • News Analysis - SAP commits to CloudFoundry and OpenSource - key steps - but what is the direction? - Read here.
  • News Analysis - SAP moves Ariba Spend Visibility to HANA - Interesting first step in a long journey - read here
  • Launch Report - When BW 7.4 meets HANA it is like 2 + 2 = 5 - but is 5 enough - read here
  • Event Report - BI 2014 and HANA 2014 takeaways - it is all about HANA and Lumira - but is that enough? Read here.
  • News Analysis – SAP slices and dices into more Cloud, and of course more HANA – read here.
  • SAP gets serious about open source and courts developers – about time – read here.
  • My top 3 takeaways from the SAP TechEd keynote – read here.
  • SAP discovers elasticity for HANA – kind of – read here.
  • Can HANA Cloud be elastic? Tough – read here.
  • SAP’s Cloud plans get more cloudy – read here.
  • HANA Enterprise Cloud helps SAP discover the cloud (benefits) – read here
Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here