On Location At SAPPHIRE 2007

May 3, 2007
15,000 experts can't be wrong. They can get lost, though.

If you didn't already know that SAP is the world's largest software vendor, a day or two spent wandering around the miles of booths and presentation halls at its recent SAPPHIRE customer conference would lead you to that (almost literally) inescapable solution. For three days, SAP took over downtown Atlanta with an estimated 15,000 users and media from around the world, with executives delivering any number of interesting announcements (available at the wrapup site).

Although the scale of this show (and the company behind it) may be intimidating, the theme of this year's conference was co-innovation, with the idea that that SAP is a team player, more of a buddy than a bully. This friendly strategy stretched from announcements about new business expert forums to Duet developments with Microsoft all the way down to the trade show floor, where archrival Oracle -- currently locked in an intellectual property dispute with SAP -- had its own booth.

Stressing this co-innovation concept, the German software giant unveiled development deals with Adobe Systems and Cisco Systems, as well as a pre-loaded, "plug-and-play" version of Duet (its software for integration with Microsoft Office apps) built by HP.

3 Quick Questions With John Fontanella Of AMR Research On SAPPHIRE

What was your opinion of the conference?

There wasn't anything earth-shattering. It seems that SAP used the conference to demonstrate that it finally reached its goal as a technology platform as well as an application company. This allows them to describe a very compelling value proposition for its customers, even though they missed many opportunities to do so. Henning claimed 2,574 companies were up on ERP 6.0, and that 75% of members of the Americas' SAP Users' Group (ASUG) plan to upgrade by the middle of next year.

Is SAP's SOA strategy finally paying off?

Well, they have established themselves as a company that provides both infrastructure and applications, if adoption rates are anywhere near what they claim. There were a lot of people who doubted them 3-4 years ago. It is still going to take 4-5 years for SAP to fully meet its vision, but they have proven that it is achievable.

How do you feel SAP has dealt with the departure of its chief software architect, Shai Agassi?

Very well. I don't see any impact on customers, which is what really counts, or on SAP's vision of the future. SAP is a large and well managed company, so the departure of one executive will not bring it to its knees.

The media were treated to a number of interviews with major manufacturers (including both Coca-Cola and Pepsi Co.) who have chosen full SAP implementation as a single-vendor approach to standardizing IT processes and practices.

Atlanta hometown heavyweight The Coca-Cola Company (TCCC) even brought journalists to their Atlanta world headquarters, where its CFO and CIO delivered insightful presentations showcasing the logistical difficulties that a global consumer products manufacturer faces.

The numbers are staggering -- between colas, juices, bottled teas, coffees and waters, TCCC sells 1.3 billion products daily, meaning that any simplification of processes, be they IT or otherwise, is of nearly inestimable value. SAP is providing solutions for TCCC both on the front-end (through integrating with customer Websites for data capture) and on the back end (through integrating TCCC's vast network of bottlers into something resembling a consistent framework.

According to CFO Gary Fayard, working with TCCC is a lucrative, but challenging, proposition. "We had 1,383 product launches last year alone across the globe, and 590 of those were new products," he said in his presentation. "We have a fleet that is more than five times larger than that of UPS. It's a strain on SAP if you think about what we have to do together to keep up that kind of innovation and focus."

SAP VP and communications chief Bill Wohl agrees. "If you look across SAP on an industry-by-industry basis, you'll find that where the innovation, good ideas and drive for us to improve SAP's ability, tools, techniques and solutions is coming from is directly from our customers," he says. "We're not experts in global bottling -- our ability to deliver beverage solutions relies on our customers to tell us what the business requirements are to be successful. We do that in more than 26 industries."

Wohl also noted that SAP has been building this co-innovation strategy for the long term, gathering a select group of customers within different industries (the consumer packaged goods version is called the CPG Advisory Council) that provide strategic direction for software development and insight about the future development of that specific industry vertical.

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