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It’s not that SAP, a giant in enterprise resource planning (ERP) software hasn’t bought before. It purchased Sybase — mostly for its mobile database technology — for about $6 billion last year — and three years before that it snapped up analytics leader BusinessObjects. But compared to rival Oracle (s ORCL), which has bought something like 40 companies in the past few years — including RightNow Technologies and Endeca just last month — SAP has been positively demure.
Now, Snabe thinks SAP needs a higher profile among consumers, most of whom wouldn’t know SAP’s MySAP, All-in-One, or BusinessOne ERP systems if they tripped over them. Speaking to The Financial Times, Snabe used a computer game maker as an example of what he hopes to do to make SAP a bigger name among more users.
“At Electronic Arts they have a rule that if they don’t see visible joy in a user in seven minutes a game will not sell. I would like to do the same with business software … We are not quite there yet, but sometimes we do get visible joy, with people saying ‘this is really cool and I am going to show it to my children.'”
SAP needs more cloud savvy
The comments show that SAP, which has ridden its ERP horse for years, knows it needs to branch out. It’s early cloud efforts, notably BusinessByDesign have underwhelmed, but its new in-memory appliance HANA won rave reviews. But, while Snabe talked up consumer-appeal, others said SAP has a cloud deficit that it should address.
Dana Gardner, principal analyst with Interarbor Solutions, said that given SAP’s installed base of ERP users, it needs to “take the Software-as-a-Service path to the cloud.”
“They need to build, buy or partner on SaaS ERP apps , or closely associated business apps as services to then move toward cloud values,” he said. “Buying may be the best option now, given how fast the market is moving, so NetSuite (s N) and Workday come to mind.”
Since NetSuite has a very large shareholder in Oracle CEO Larry Ellison, a buyout is not likely there. Workday, founded by PeopleSoft pioneer Dave Duffield, is a hot property now, having just closed a whopping $85 million in a Series F round of funding, so it clearly does not need to be bought and would be pricey. Given Duffield’s and SAP’s shared animus towards Oracle, an alliance of those two companies would be extremely interesting.
But, SAP still has a lot to prove in cloud computing so my bet is that’s where it’s looking (provided Oracle has left anything on the table.)
When Snabe’s comments surfaced in The Financial Times this week, the twitterati weighed in. Ray Wang, founder of Constellation Research, said Tibco(s TIBX) — and its middleware and service-oriented architecture expertise — would be a good fit. Others said OpenText (s OTEX). Tibco is good on enabling infrastructure but isn’t a name that leaps to mind in consumerization.
SAP has the resources to make deals: as of its most recent quarter, ending September 30, SAP had $5.93 billion cash on hand.
Snabe’s quest shows how deeply consumerization is impacting even the biggest legacy IT players. This consumerization of IT theme will be front and center at the GigaOm Net:Work Conference next month in San Francisco.