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5 Key Takeaways From SAP’s Investor Day

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Michael Brown

June 20, 2016
Bowery Capital

SAP did their investor symposium in NYC yesterday. For startups that don’t read much about what the big guys are up to these days you should. Although generally lagging indicators, the presentations are good to paint a high level view of what is happening in the market. There is also the fact that many big company CMOs, CTOs and CIOs and line of business employees still buy product from these companies so good to know in general what they are thinking. The core of the presentation was on HANA and there were a few important things to note in our view:

1) While IBM, Oracle and SAP did a huge press push last year around their core new products we didn’t hear much thereafter. This was a major update post launch and it is clear that HANA Cloud is going to really be a big push for SAP in 2014-2015. They care so much they may need to de-emphasize pricing in order to spur adoption and are also trying to build out big ISV partnerships to support the growth.

2) Management noted that HANA Cloud will be able to reduce the footprint of CRM and BW (business warehouse) deployments, for example, as one view of the customer is contained at the core database level. Effectively, they will sell less products end of the day here and move to more of a full platform versus bits and pieces put together.

3) They have 53 customers on HANA Cloud systems currently live and 250+ go-live projects in the works. One customer, ConAgra Foods, noted that the flexibility to deploy HANA in increments (vs. a total rip-and-replace) was a key differentiating feature. Very important as emerging companies think about competing with SAP. The buyer wont need to rip out the whole solution any more which could be beneficial to incumbents.

4) From the sales standpoint, SAP stressed that it is re-engaging at the Line of Business level as business users and executives are most focused on business outcomes (as opposed to IT departments that are focused on infrastructure). Just interesting to see them gear up in this regard and sell less directly into the CTO or CIO.

5) Also on the sales side SAP went through a big re-alignment recently and they are now aligned by industry, with territories and accounts set up to facilitate long-term relationships in industries. While they haven’t put out the word yet from a hiring standpoint you could see industry-based solutions for verticals such as Financial Services, Insurance, Retail, and others popping up soon.