SAP or SALESFORCE: And the WINNER is………………..

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Thank you first for taking the time to read this blog. I hope this blog & shared thoughts will help you in your career or day to day strategic thinking & decision making or just for good reading.

Let me preface that there are other big vendors in the Enterprise DIGITAL race (Oracle, Infor, Adobe etc.) but for simplicity’s sake and the 2 technologies I am closely associated with, I am going to compare these 2 technology giants.

What is Enterprise DIGITAL?
The combined bucket of all these new technologies in this decade; Artificial Intelligence (AI), deep machine learning, IOT (Internet of Things), blockchain, drones, big data, public/private cloud, mobility, AR/VR (Augmented Reality/Virtual Reality), social media and more to run a company from back end to front end operations.

A quick 101 lesson for those who are not close to the technology space with either of these companies addressed here:
Salesforce focuses on mostly front-end technologies that run a company, sales, service, marketing, eCommerce, collaboration, integration & so on. SAP focusses on mostly back-end technologies like manufacturing, supply chain, HR, Finance and also front end like sales, service, eCommerce etc. It’s not fair to compare the two since it is not an apple-to-apple comparison, but they do have the CX & integration space where they play in the same space and a few other areas.

Salesforce (Ticker: CRM)
Salesforce has already won the SaaS CRM race with mindshare and market share, but Digital is much more than just SaaS CRM. How about all the technologies mentioned above under the digital umbrella, Salesforce has its hands in most of them with Einstein AI, IOT APIs and a plethora of partners offering various digital solutions based on the Force.com platform.

SAP (Ticker: SAP)
SAP is winning the ERP mindshare and market share but again Digital is not just ERP/back-end systems. SAP has also jumped into the digital wave with its branded SAP BTP (Business Technology Platform) which is a mixture of most of the technologies mentioned above. By partnering with all major Hyperscalers, SAP is offering a wide choice to the customer to avail of any of the DIGITAL technologies on offer from SAP and/or the Hyperscaler.

Can SAP or Salesforce help their customers win in this digital race?
Winning yesterday is no guarantee for either of them to win tomorrow but there are some indicators to predict to the best we can. SAP has all the back-end data and front-end technology companies it has acquired (Hybris, Ariba, Concur etc.) but the challenges remain. Can the customer get over the mind block of SAP being complex, costly, and not user friendly? SAP seems to be doing everything they can to become user friendly with their HTML5 persona based responsive UI across all SAP applications but making the complex simple has earnestly started but the perception change remains to be seen.

Salesforce on the other hand is still seen as lightweight not able to run a whole enterprise like manufacturing or HR or finance or supply chain. Question remains, does one need all that for being successful in the digital age? Can they win just focusing on sales force automation (SFA), service, ecommerce, marketing, reporting, collaboration & industry clouds. These current focus areas have a digital component to it and Salesforce will do well to win there if history is an indicator.

When a whole billion dollar multi-national across the globe wants to go digital whom will it look to; SAP or Salesforce? Short answer is, whoever can help them stay relevant and win mind share & market share in the digital era through quick digital transformation of their business operations will win.

From current statistics it looks like Salesforce is winning the CX/front end customer facing applications battle* in most if not all Fortune 500 companies whereas SAP is winning the back-end applications battle** (Manufacturing, Supply Chain, Finance etc.). Looking at history to increase their stakeholder returns Salesforce needs more larger enterprise deals for which it has gone from a pure SAAS layer to buying integration company MuleSoft followed by Reporting major Tableau to collaboration company Slack & so far stopped short buying a cloud ERP company.

SAP on the other hand has been winning the back-end business applications battle**; buying their way into CX & Cloud companies like Hybris for Commerce Cloud, Success Factors for HR, Ariba for procurement and so on towards the CX/SaaS layer. Most successful large corporations are going best of breed where both SAP & SFDC co-exist.

SAP’s challenge is trying to run nimble, make the complex simple (better said than done) and help organizations do the digital transformation quicker & get a better ROI (Return on Investment). Salesforce challenge on the other hand is to grow the length & depth of their enterprise product portfolio while staying true to their winning formula; easy to manage, use and win fast.

And the WINNER is……, well whom am I to decide that. It is you the customer who ultimately will decide who can help you as an organization to win in the marketplace. The vendor who can help you move the needle, whoever of these two can help in that endeavor is the WINNER. At some customers the WINNER maybe SAP at others it maybe SFDC but at others it maybe both. As of now both companies seem to be winning in their respective spaces, but time will tell who the real winner is. Let’s keep watching the DIGITAL race.

*https://www.salesforce.com/news/stories/salesforce-is-a-leader-in-2021-gartner-magic-quadrant-for-crm-customer-engagement-center/
**https://news.sap.com/2022/07/gartner-magic-quadrant-for-cloud-erp-for-service-centric-enterprises-sap-s-4hana-cloud/

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