Sapphire 2007: Better Engaged

With over 8,000 attendees consisting of partners, customers, consultants,
industry analysts, bloggers, media, and SAP officials from across the world,
Sapphire, the annual conference of SAP is no doubt becoming a major annual
conglomeration of business users.

Therefore, there could not have been a better place than Vienna, the
beautiful city by the river Danube, to drive home the message that SAP is not
just about ERP modules, but is now helping companies with business
transformation.

While the entire show was through and through a hard-sell of various SAP
technologies, solutions, and upgrades in the pipeline, one message that came
across loud and clear was that amid increasing competition in this space,
companies like SAP will drastically enhance their customer engagement spectrum.
In his opening keynote, Henning Kagerman, chairman and CEO of SAP said, "Our big
focus will be to give a big boost to the competitiveness of our customers".

While all this is good news for SAP and its customers, there are also
challenges. The impact of globalization for instance is being felt on this
Walldorf, Gefrmany-based company. There are reports of internal tussle between
its supposedly conservative European leadership that was comfortable with the
state of affairs, and the more ambitious US and emerging markets where most of
the current growth in terms people and markets is happening. Even on some
prestigious stock exchanges, SAP's show was dull compared to its rival Oracle.

It is but natural that SAP wants its role in an organization far beyond just
ERP now, and working on all fronts towards that objective. "Roll out of new
products, mergers and aqcuisitions, and building specialization areas in this
direction, is the right step," explained a New York-based analyst attending the
mega conference.

One interesting observation was in one of the slides that chief Kagerman
presented in his opening address, according to which a large part of SAP's big
customers are still undecided on the future course of their platform of
preference. It is, therefore, the right time for this company to take steps and
make announcements that will reassure customers. For instance, there was a lot
of stress on concepts such as measuring corporate performance and ensuring
corporate governance, risk management, and compliance. SAP is pitching for a
role in all these processes, which are now gaining criticality as business and
their markets become global.

In fact, SAP also announced that its customers the world over were responding
very positively to its All-in-One solutions, with over 10,000 customers in more
than 50 countries benefiting from it. The company also announced a new business
opportunity for its partners and customers. This initiative is based on
co-innovation as a community collaboration model, specially for banking and
insurance applications. Kagerman was also open about his support for the need
for collaboration when he said, "Individual and team collaboration in
enterprises is going to be very important, especially if IT has to be fully
leveraged."

In the middle of all this, the company says it will be focusing on large,
medium, and some small customers only. And in their small customers, very small
customers do not have any place. At least in the near term. But considering that
the small customer is the biggest opportunity in the pipeline, specially in
markets like India, the company is not ruling them out. According to Leo
Apothekar, President, Customer Solutions and Operations, at SAP "We will not go
after SOHO type of customers. But in the future we might consider it."

The mood at Sapphire was clearly very upbeat, as delegates queued up at the
registration desks. The three large exhibition halls where SAP partners,
including Indian players such as TCS. Wipro, HCL and Genpact were displaying
products and services, were crowded with visitors.

The company also took this big opportunity to make some major announcements,
the biggest of which was SAP's tie-up with an old competitor SunGard, a $4 bn
software solutions company for the financial services sector. In another
significant move, SAP announced that it has acquired Wicom, a leading European
IP-based solutions company that focuses on contact centers and enterprise
communications solutions. These moves are expected to further consolidate SAP's
position in the BFSI and BPO space.

That this company is not just about business and corporate applications was
made amply clear when Apotheker announced that the beautiful city of Vienna has
chosen SAP for making the life of its residents simple and efficient. The Vienna
City Administration will now run its network, which is one of the largest in
Europe, connecting 30,000 employees with 1.7 mn residents, on the SAP platform.
The company is very aggressively going after some of the key e-Governance
projects in India, an area that is in the take-off mode now.

Talking of India, SAP has some big client names to flash. Firms across a
spectrum of industries such as Titan, Bajaj Auto, Mahindra & Mahindra, Indian
Oil, ITC-IBP, Apollo Tyres, Reliance Energy, Sundram Clayton, Bharat Petroleum,
and ONGC are some of the customers in the large enterprise category that have
really been able to leverage SAP technology towards meeting their business
objectives. The company now talks of these success stories at global
conferences.

No wonder that for India, SAP has big plans. The company has already
committed an investment of $1 billon for India operation in the coming few
years. In addition it also plans to double the employee headcount by the year
2010. Further, e-learning facilities will be provided in tier-II cities across
the country, for which plans are in the pipeline. By 2010 SAP expects to impart
training to 1,50,000 people as SAP consultants.

Clearly SAP's gameplan is big, long term, and sort of all encompassing.
According to Doug Merrit, executive VP, Business User Development, and Corporate
Officer at SAP, "Today large companies have on one hand global interests and on
the other are being forced into compliance regarding corporate governance and
risk. Their smaller partners down the line are also being forced to adopt these
practices. Business transformation has to happen and SAP is proving to be a big
enabler for that".

Ibrahim Ahmad

The author was hosted in Vienna