SAPPHIRE 2018. In an Orlando convention center, far away from Walldorf SAP holds its annual conference, boldly going where no one has gone before.

But enough of this poor allegation to Star Trek although it reasonably sets the tone. The first two days gave a deep view into the company strategy.

Condensed into two press releases the company laid out its vision of the future of CRM and intelligent enterprises.

And, doing so, shot a few broadsides at the competition, especially Salesforce.

The News

“The legacy CRM systems are all about sales; SAP C/4HANA is all about the consumer … when you connect all SAP applications together in an intelligent cloud suite, the demand chain directly fuels the behaviors of the supply chain” said SAP CEO Bill McDermott.

SAP intends to achieve this link of front- and back office by fully integrating an augmented suite of solutions that base on the SAP Hybris Cloud solutions into the digital core, the transactional back end. This integration is done via the SAP Cloud Platform.

Additionally, it is fusing the new high profile acquisitions Gigya and CallidusCloud into the solution.

C/4HANA

C/4HANA; source SAP

The Customer Data Cloud is what has been Gigya.

This model, as well as S/4HANA, will be supported by the SAP HANA Data Management Suite, which is essentially a beefed up Master Data Management Solution around the SAP Data Hub.

The second press release is about AI, IaaS, and more AI. SAP starts to talk more about conversational AI and Leonardo, as well as blockchain get more to the forefront.

Mostly on the back end.

The bigger Picture

The CRM suite is back!

This is an inevitable consequence of the ongoing Clash of the Titans, aka platform war and the realization that customer experience is actually a platform play. Just that the suite now looks different from how it looked like say, 15 years ago, when we saw huge monolithic applications like the venerable SAP CRM, or Siebel CRM.

What stays is where at least Salesforce struggles – a common data model underneath the suite.

I am, frankly, not so sure about Oracle and Microsoft here, but think that they are following a route similar to SAP. And then there is Adobe, which takes the way from marketing into commerce in a pretty strong move. The acquisition of Magento might be game changing, also considering the strong relationship to Microsoft.

Especially Salesforce is forging ahead establishing new abilities for their customers to build new business models by helping their customers and improving internal efficiencies. Being the undisputed number one in the CRM market, Salesforce is the natural target of the other tier one companies. And as I (e.g. here), as well as others, have written: Salesforce is vulnerable.

AI and conversational user interfaces cannot be done without.

Conversational user interfaces are what will change our way of using computers as helpers. They are what makes computing ambient computing. So there needs to be significant investment in this area. There are lots of specialists around, of which SAP acquired one.

Blockchain needs to be covered, anyways.

In my eyes, blockchain is still a topic for the back end. Ledgers, tracking and tracing, and so on. Identity seems to be on the verge, and then there are a number of marketing related ideas that I personally still do not regard as proven enough to be viable. Time will tell. Being a big vendor means that one needs to have a foot in that game.

My PoV and Advice

For the keen observer it was all in the coming. SAP always was a suite company. Even R/2 and R/3 already were suites right from the beginning. While some part of the announcement is achieved by a rebranding the overall picture is strong. It plays to SAP’s strengths of being able to deliver end-to-end.

A caveat is that SAP is still suffering from a loss of mindshare when it comes to CRM. The company is addressing this for several years now, but it is still not where it needs to be. But the picture is improving as the solution suite is strong. Maybe not everywhere as strong as the competition, but the promise of integration and the sheer power behind a determined SAP is certainly convincing. I know of Marketing Cloud wins against Adobe although some, for marketers, important functionality is stronger in Adobe. Similarly are there (pre acquisition) wins of Cloud for Sales/Callidus against Salesforce Sales Cloud and their CPQ. A common denominator here is that customers did not know how easy to use and powerful the SAP software is.

Lacking mindshare, wrong perception.

But, what this says is that CallidusCloud, along with Gigya, have been some of the best acquisitions that could have been made (well, include Hybris here).

Putting the front office applications under the Hybris brand back the day certainly helped, too. After creating momentum there is brand harmonization now, which is a good thing.

Still, my recommendation to SAP is to look for low hanging fruits that are of benefit to the users. It is not all about the consumer. It is also not all about the best possible behind-the-scenes functionality, unless it is of clear benefit to a significant user group.

Win the hearts of the users, too! They are the ones who are craving for having their job made simpler. Helping them might be less headline-worthy, but it will pay off in spades.

This is where the intelligent enterprise, machine learning, and especially conversational user interfaces, come into picture. The announcement about this is relating to the back office but then there are use cases for the front office, too. Build them, talk about them. Some of them are even already there. But when it e.g. comes to AI based opportunity scoring even I think of Clari, not SAP – which is a shame.

Conversational AIs and machine learning have become table stakes. It is good to see SAP productizing SAP Leonardo more and more. So far it looked more like a consulting solution, but this seems to change to the better now.

Offering blockchain services seems to be a must these days. It is refreshing that SAP focuses on the back end side here. I am sure there will be some viable customer facing use cases but these still need to mature. Till then it is good to improve existing grounds instead of trying to disrupt.

As a little side note, and also looking into Gartners 2018 Magic Quadrant of IaaS solutions, SAP is betting on the right horses. IBM shows up for the private cloud solutions only and is partnered for private cloud deployments. Google, AWS, and Azure are available for public cloud deployments. The next IaaS infrastructure to be partnered with for public cloud deployments should be Alibaba Cloud.

All in all, SAP seems on a roll.