SAP.info: Cloud computing has become an important new business model for many companies. What are your top three predictions for cloud in 2014?
Shawn Price: First, it’s undeniable that in every corner of the globe, cloud is here. Sixty percent of the $107 billion software market will be spent on cloud-based software, and 80 percent of that will come through the line-of-business. My second prediction is that there will be a dramatic shift away from point-based, best-of-breed solutions to a new class of highly integrated, best-of-breed cloud application suites. This is the best way for customers to deliver the customer experience, analytics and value that their consumers expect. The third major prediction is that cloud solutions will co-exist with investments already made, resulting in hybrid models. Pure-play software-as-a-service providers hope that customers will rip out everything in one monolithic move but that’s just not reality for most companies.
How can SAP help businesses generate value from these trends?
Businesses need to reduce complexity, develop new business models, and create business outcomes. So while SAP remains committed to our full range of offerings, the cloud is where we’re taking the company. We are enabling an incredible revolution at the line-of-business where easily consumed capabilities in the cloud are unlocking new opportunities both within the business and for consumers. Cloud delivers instant consumption and innovation, unifying and simplifying the enterprise so that companies can focus on growth. For example, ConAgra is using SAP technologies to do one thing only: they can track raw material costs across 4,000 products and understand how cost changes affect the gross margin and how that potentially impacts the company’s stock. They are able to actually look ahead, not in the rear view mirror, to predict an outcome with certainty and plan for its impact on the business. This new capability will revolutionize their business and the industry.
From single pain point to a blueprint for innovation
We’re hearing a lot about how SAP is simplifying and getting closer to customers. Can you provide some specific examples?
SAP has shifted from focusing purely on technology to delivering the outcomes that customers need to stay relevant today. We’ve reimagined the customer lifecycle from a single app that solves a single pain point, to delivering a blueprint for transformation and innovation.
Consider the HR function, which is changing as companies need to support employee engagement and development in an era of global competition for the best talent. Customers can start with a single app like Learning or implement a collection of best-in-breed apps that address the entire employee lifecycle. Customer engagement is another example. We’ve reimagined traditional salesforce automation systems to help companies improve customer engagement and grow lifetime value. Companies can start anywhere with targeted apps to gain actionable insights, or span the entire end-to-end vision, guiding customers from awareness to advocacy.
The business network is another great example of how engagement is really the differentiator. It takes more than just applications to automate old ways of doing things. It requires a unique blend of apps, collaboration tools and networks to meet expectations today. We give companies a full view of spend and vendor relations with paperless transactions and touch-less invoice processing in the cloud, and a network to pull suppliers together and seamlessly able to transact. Companies can start by solving a single pain point, say invoice tracking, or go all-in with end-to-end procure to pay that addresses everything from spend analysis to supplier payments across the business network. And ultimately, like in other social networks, people select for themselves to not just be buyers, but recommenders.
A transition period for customers
Is everything going to the cloud?
Over time, yes. Most new applications will be driven to the cloud because the pace of innovation is much faster. We’re constantly innovating our products, and delivering new releases four times a year. But it’s important to remember that this is a transition period for customers. Companies understandably want to preserve current investments, and not all mission-critical applications have matured sufficiently for the cloud. SAP is uniquely positioned to meet the needs of both line-of-business (LoB) decision-makers that are driving cloud adoption, and IT which is responsible for overall infrastructure and systems. Whether public cloud LoB apps, or managed private cloud, that transition is well underway. We’ve long been the trusted partner of the CIO, and we also provide full coverage for the LoB.
Next page: Providing the modularity customers want
A simple path to the cloud
What can customers expect from SAP’s vision and strategy in 2014?
We are providing customers with a simple, easy path to the cloud based on the full value of our expertise and experience. Our entire portfolio is built on modularity and co-existence, not rip and replace. Our unique ability to allow customers to, “start anywhere, go anywhere,” reflects our commitment to providing the flexible modularity they’ve requested. They have the choice to begin with one app that addresses a single pain point, and add on as needed for a completely integrated, best-of-breed SAP cloud suite. And we offer them one solution for each industry, painting a picture of how to transform starting with one application or best-in-breed suite or end-to-end, based on our 42 years of industry expertise and the 35 million customers we have in the cloud today. This is a vision for transformation that’s about outcomes and experience, not features and functionality. Process automation alone doesn’t drive outcomes. We know customers are looking to enable new processes across the enterprise – and as I said before, it’s about apps, networks and tools for collaboration, and of course it has to be all social and 100 percent mobile.