Last week I was in Boston where I attended this year's SAP Business Influencer Summit. I was really eager to check out what was going on with SAP, because quite frankly it had been years since I've taken a close look at what they've been up to. And the main reason for that is I just didn't view them as being in the realm of possibility for the S in SME (small and mid-size enterprise). That's because their definition of what a small business is doesn't match up with mine. I wrote about this 4 1/2 years ago based on an article in Red Herring about SAP's efforts to reach SMEs.
There have been some nice write-ups of the event, by folks like Paul, Denis Pombriant, Ray Wang, Michael Krigsman, Jesus Hoyos, Esteban Kolsky and others that you should check out if you are interested in what took place at the conference. Also check out this great pdf compilation of the tweets from the day of the conference to get the blow by blow as the day unfolded. And for a quick check at what the Twitterati thought about the conference, check out the tweetcloud below for the most used words associated with the conference - click on the image below to see a larger view of the cloud.
As you can see one of the largest words in the cloud is SME, which was definitely mentioned a great deal throughout the day. I'll get into that in a minute, but before I do here a few things that caught my (and others) attention during the day - with a few thoughts.
I found the most interesting presentation of the day came from SAP's CTO Dr. Vishal Sikka. Dr. Sikka and his colleague Sam Yen demonstrated the ability to analyze a 275M record dataset in sub-second times using different user interfaces - including Business Objects explorer, Microsoft Excel, and Microsoft Surface. This was made possible by using a column-based, in-memory database that allows for fast, real-time access of information. Sikka says in-memory computing lowers complexity for application development while increasing extensibility. The Surface demo was an eye opener as it combines the ease of touch-screen user interfaces with real, real-time (as they call it) access to enormous amounts of data. And as more content is created by social customers, companies who can marry this information with transactional data will be able to make quicker, more informed decisions - and to execute activities more successfully.
Ok I know what you're thinking - that in-memory stuff sounds good and all that, but what does that have to do with SMEs? SAP is betting that they will be very interested in it in a few ways from a cloud perspective. With a great deal of emphasis right now on cloud services and platforms, SAP is positioning it's Business ByDesign product - aimed at the SME market - in the cloud. And the idea is that BBD (not Bell Biv Devoe) will take advantage of in-memory computing to deliver the advantages mentioned above to the SME crowd.
The cloud will also be available to host simple applications that will be able to access back-end SAP systems. This was demoed by a contract management application running off the Amazon cloud that was able to update an SAP system behind the corporate firewall. The other cool thing was the ability for a contract worker on a mobile device (an iPhone in the demo) out in the field sending in their timesheet to the contract managment app, which in turn updated the back office ERP app so that managment can have up to the minute information. And there also some demos showing integrations between SAP cloud apps with Google Wave.
The bottom line is that SAP wanted to let people know that they are serious about the cloud, and shared how they are currently involved in it. The most visible example of this was explained by their involvement with Apple's iTunes store being based on SAP in the cloud. But, as you can tell by Mike Fauscette's tweet that I re-tweeted, claiming future cloud leadership based off a product not readily available is something that will have to be judged...in the future.
Automation Without Communitization
One of the products SAP targets the SME community with is an on-premise product, Business One. There was a pretty cool demo of cloud-based apps being able to integrate with B1. There was also a demo showing how you can create an online store that fully integrates with your B1 instance with just a couple of clicks.
It was pretty impressive to see how they've automated and integrated ecommerce into the on-premise business app. The online store looked to be fully functional and able to move transactions taken on the site into the backoffice app. And as great as this is, the thing that stood out to me is that there was nothing on the generated site that allowed for product reviews from customers, ratings and discussion threads. While it's critically important to make it as easy as possible to process online transactions and move them into backoffice functions, what drives someone to actually purchase something in today's world is information and interaction from other customers. That's important for creating/facilitating the desire for a customer to buy.Reaching the S in SME
OK.... it appears that the definition discussed back in 2005 may still be in play, as one of the customers on a panel of SMEs sharing their experiences using SAP software had 5000 employees. As you can imagine that sparked a number of tweets and re-tweets about what does SAP really consider to be an SME. I also think the smallest revenue number I heard from the SME panel was $30M, which is small in the big scheme of things, but 99.99% of the businesses I consider to be small would kill for that.
Definition aside, it looks to me like SAP is very serious about serving the SME community as they've defined it. The Biz ByDesign offering to me looks to be the lynch pin to growing their SME customer base. But, according to many more familiar with SAP than I am, BBD has been a long time in coming, so skepticism is running rampant as to whether they will roll this service out to the masses in 2010. But if they do meet expectations for rolling it out it will go a long way towards reaching a wider SME audience.
Another piece to the SME puzzle for SAP is the partner channel. The partner channel already accounts for 85% of SME deals, but according to Pat Hume (SVP of Global SME Partner Channel) the goal is to have partners account for 100% of SME sales. As Ray Wang's tweet above mentions, SAP's brand name drives SME sales (according to Altimeter's informal survey). This will mean SAP's partners are going to have to up their sales and marketing efforts, as well as their customer education efforts, in order to find and keep new customers.
SAP looks ready to work with the partner channel to make deeper inroads into the SME segment, which they'll have to do in order to make sure their brand appeal reaches further into the space. They'll also have to facilitate user communities which will help SMEs better understand what SAP has to offer them. This is really important as many companies may still feel SAP is really for the enterprise. Even one of the featured customers on the SME panel - Johnson Products CEO Eric Brown - mentioned several times how he's surprised his company is using SAP, mainly because of his initial perceptions he had of the company.
SAP has millions of members throughout their assortment of communities, but many of them skew towards the technical side of things. SME customers are more focused on the business challenges they face, best practices for using software (and the cloud) and to communicate with each other. This may call for different kinds of communities, like the MyVenturePad community sponsored by SAP and facilitated by Social Media Today. This community is all about the business challenges facing startups, entrepreneurs and SMEs. SAP has also teamed of with SMT on the new community site - TheSocialCustomer.com. As I'm directly involved with this community as a blogger-in-residence, I know this community is focused on the business challenges of engaging the social customer, which is of major concern to businesses of all sizes.The Conclusion
All in all I think SAP is doing some impressive things with respect to creating products and services that can benefit SMEs, but it's a matter of when these products will be available. They've got the resources to do what they want, and it appears they are serious about getting more involved with the segment. The development of Biz ByDesign is key to their plans, but I'm still wondering just how serious they are about the S in SME. Right now I'm not sure where they fit in to their plans. But I'm looking forward to seeing what happens as their plans unfold and are executed.