SAP AG wants your business, and seems to be working hard for it. The software vendor launched “Safe Passage” to lure PeopleSoft Inc., J.D. Edwards & Co. (JDE) and Retek Inc. customers away from Oracle Corp., which acquired those companies. SAP plans a new product with Microsoft Corp. that could make SAP more of a household name than it is today. And SAP’s beefing up analytics in its apps. But SAP also has some explaining to do about problematic implementations. Bob Courteau, SAP Canada Inc.’s president, talked to Stefan Dubowski about it all at Sapphire, the company’s user conference in Boston last month.
How is Safe Passage doing in Canada?
It’s gone really, really well. We see it as an opportunity to talk to people about an alternative to Oracle and JDE/ PeopleSoft customers. I’m surprised by how many people are picking up the phone and calling us. “Come on in. I want to talk to you about this.” We’re hearing that from our partners as well. People are thinking they have to start making some decisions in the medium term about creating a choice for themselves.
Are people considering Safe Passage because of the price discounts it presents for SAP wares, or are they looking because they’re uncertain about where the business software space is headed, what with PeopleSoft buying JDE, then Oracle buying PeopleSoft and other maneuvers?
The driver is flat-out uncertainty. The kind of applications we offer have a dramatic impact on companies’ operations. People plan a few years ahead. It’s unclear how this is going to unfold for JDE and PeopleSoft customers. That’s the big driver. The money part of it is the driver on how fast it happens. But we’re not rolling in to prospective customers and saying, “Hey, we’re going to save you a whole bunch of money.” We’re saying, “We can help you with your business plans.” That’s the dialogue. When it comes to looking at how we can achieve that, we get into what you’ve invested in previously, the timing on upgrades, maybe maintenance alternatives and lower costs. But that’s not the focus. It’s not only about cost avoidance.
One industry analyst we talked to said Mendocino (the upcoming SAP/Microsoft software that lets users access SAP’s programs via Office apps) could be SAP’s yellow brick road into small- and mid-sized businesses (SMBs). What do you think Mendocino’s impact will be?
First of all, 60 per cent of our clients are what the market would call SMBs, under $1 billion (in revenue). We have the largest share by far in the world of SMB customers compared to any other competitor out there. I had to clear that up right away. The Mendocino announcement propagates a wider view of SAP….It’s a funny thing. People might say, “This is SAP’s way of broadening their reach.” There’s another way to look at it: this is Microsoft’s way of getting access to the standard in business applications. It’s a great partnership that cuts both ways.
There have been some problematic SAP implementations. Canadian grocery distributor Sobeys Inc., for instance, reportedly wrote off $50 million a few years ago when its SAP platform crashed. How does SAP explain situations like that?
It’s old news, honestly. I think we did 1,600 new implementations in North America alone last year. We track every one of them. The products work….But it’s like any large project. I was with a CIO yesterday who wrote off a major ERP project from one of our competitors. The reality is we’re winning because we deliver…we add value to the business and our partners are betting on SAP. Just look at the show floor (here at Sapphire). If it were such a big problem, we wouldn’t see Accenture, IBM, Deloitte and others working with us. Sobeys, by presenting down here, is a great example. They could have gone to somebody else as a partner, but they stuck with us and we stuck with them.
Does Sobeys make a particularly good reference customer? After all, here’s a business that had a faltering SAP implementation, but SAP and the retailer worked together to fix things. And as you say, Sobeys reps are here at Sapphire talking about the company’s SAP implementation.
We would put Sobeys on the list as a company getting value from SAP, and they are. That’s our read on that.
How will the new built-in analytic features in SAP apps affect the business intelligence (BI) software sector? Are companies like SAS Institute Inc. and Cognos Inc. in trouble?
You’ve walked the floor, right? They’re all here: Business Objects, Cognos, Teradata. I think there’s an opportunity for many of those companies to flourish. They all have serious commitments to the SAP ecosystem, because of the amount of rich data they can collect out of the SAP systems. We believe the emerging play is around composite applications. It’s not just about data warehousing. It’s about taking that information, mixing it with the portal, integrating with a third-party system, pulling that all together…so people can make decisions. We do that extremely well. It’s a big part of our business. There’s a lot of room in this market place.
Can BI-specific software vendors be SAP partners and competitors at once?
I don’t know that we view them as competitors. Some people make decisions around the data warehouse and analytics that are one-off decisions. That’s not where we are. We’re trying to solve business problems…rather than sell technology.
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