SAP combines enterprise core with ready-to-use cloud
SAP aims to show that it is a serious player in the cloud computing sector today, announcing several new cloud initiatives under what it calls an "accelerated" strategy. The company's deeper commitment to the cloud stems from its $3.4 billion merger with human capital management service provider SuccessFactors several months back.
Former SuccessFactors CEO Lars Dalgaard is now head of SAP's cloud unit, and he is tasked with turning the company's cloud business around. At the Sapphire Now Conference -- SAP's annual gathering in Orlando -- Dalgaard is showing off a line of solutions arranged around four different themes: people, money, customers and suppliers.
"The cloud is a completely new paradigm", Dalgaard argues. "We will provide integration among the cloud solutions and external content out-of-the-box with on-premise business software. We are passionate about bringing creative and innovative first-in-class applications to market with a beautiful user experience".
On the people and money front, SAP is integrating SuccessFactors' human resources services -- Employee Central -- with its own in-house cloud based payroll solution. Financials OnDemand is now integrated with Employee Central, which allows for companies to better manage cash flow. SAP says its Travel OnDemand service is also slated for integration in the near future.
Sales OnDemand will now receive quarterly updates, an obvious move to bring it more in line with rivals like Salesforce.com. A new application called Social Customer Engagement OnDemand will manage social reach, good news given a large majority of companies these days seem to be wasting money on social CRM initiatives.
For suppliers, SAP is investing in its Sourcing OnDemand and Information Interchange OnDemand solutions that will assist in supply acquisition and invoice management, respectively.
SAP's moves Tuesday are getting good reviews. "Today’s announcements show SAP combining its core strength of large enterprise applications with a ready-to-use cloud strategy for the first time", Forrester analyst Stefan Ried says. "SAP’s long-term cloud strategy needs to be a triple play: SaaS applications, an application-centric platform to extend them, and a new platform for the next generation of social business networks".
While Ried may be correct in saying SAP has finally got it right with the cloud, its track record so far has been pretty poor. The last major foray into cloud software back in 2007 was a major failure. SAP spent $500 million to introduce Business ByDesign, an effort aimed at making its management tools more manageable and affordable to small and medium sized business.
Even after an attempted relaunch in 2010, the service was only able to garner about 1,000 customers, which came nowhere near to recouping its costs.