It's hard to believe that less than 7 years ago, SAP was seen as a stodgy, client-server based, and very stubborn German software company. That transformation from "borg-like" vendor to innovator wasn't easy, but at the helm of that transition was Shai Agassi. As one of the few non-German executive members, he harnessed the can-do attitude of Silicon Valley, brought the Israeli practicality, and tied the engineering talent of SAP closer to the pulse of innovation. And despite the skeptics, he shifted power away from Germany and Newtown Square to Palo Alto.
Looking back, Shai leaves an organization with quite a legacy. First and foremost the transformation from client-server to internet. Shai also drove the efforts to get mySAP CRM out the door and build out the mid-market. But even more importantly, the strong software ecosystem and partner network that Shai so evangelized leaves SAP with the foundation to innovate and build last mile solutions so needed in the micro-vertical market. SAP's success in building buzz and attracting ISV partners includes work with Microsoft on Duet that continues to differentiate SAP from its chief competitor, Oracle, in the applications space. Finally, the vision and swagger Shai brought to SAP will be the most memorable. Customers often left impressed by the possibilities they could see in their investment in SAP.
Yet, challenges abound for SAP in a post-Shai world with or without him. Microsoft shows continued success in the SMB side of the house with wins in hub and spoke SAP environments and subsidiaries of SAP enterprises looking to wean themselves from the high cost of ownership and upgrade to mySAP ERP 2005 Meanwhile heavy discounting by Oracle in the large enterprise space, put quite a squeeze on SAP in the near term for new business in the large enterprise space, as only Oracle can afford to bolster app sales with middleware and database revenues. SaaS entrants like SalesForce.com and NetSuite chip away at SAP's cost structure and usability while the entrance of Dave Duffield's WorkDay may complicate SAP's efforts to beat Oracle/PeopleSoft at HCM. As user experience becomes important, SAP has fallen behind in building products that showcase the best of Web 2.0 meets Enterprise 2.0.
So while Shai brought vision and innovation, much work needs to be done in a post-Shai world. The need to execute becomes greater as promises made to customers, partners, and employees must be kept. Investment for better tools in NetWeaver and MDM would help partners build more efficiently and allow for a stronger ecosystem foundation. Success in the mid-market and a strong SaaS offering would put competitors SalesForce.com, WorkDay, Oracle, and NetSuite on the defensive. Moreover, a move away from middleware infrastructure in general would expedite the transition from Oracle database to anything else and keep SAP from indirectly funding future Oracle acquisitions and Oracle's development of competitive products.
But without a visionary like Shai at hand, the top tier talent he brought into the valley will need a reason from management to remain. Execution of Shai's vision has always been the most challenging role to play and we will know in the next 3 to 5 years how SAP will fare in the market. Yet despite execution being the key to near term success, SAP will still need an articulate visionary at the helm or risk retreating on the visibility and panache Shai brought to the industry.
For additional information:
Official SAP Press Release
San Francisco Chronicle
(The personal contents in this blog do not reflect the opinions, ideas, thoughts, points of view, and any other potential attribution of my current, past, or future employers.)
Copyrighted 2007 by R Wang. All rights reserved