Friday, January 29, 2010

SAP: Just a best of breed provider?

Jan 29, 2010

Wow! Look who is using the strategy that the best of breed enterprise solution providers used to use against SAP. It used to be that the innovative best of breed providers (i2, Manugistics, etc.) resorted to the “cramdown-versus-kumbaya” argument against SAP. Now SAP is stooping to the same argument against Oracle.


In a discussion with Bob Evans at InformationWeek, SAP CTO Vishal Sikka says that SAP “always believed that for customers with heterogeneous environments—and that's what they all have—it's all about interoperability and helping everything work together, rather than <…> buying more and more pieces and cramming it all down their customers' throats.” To quote Evans, “Oracle Cramdown Vs. SAP Kumbaya.”


The innovative companies that produced best of breed solutions were (and still are) telling the same story against SAP. SAP was not interested in making it easy for Best of Breed (BoB) providers to interoperate with SAP. Here is a good post on this subject. Some would even say that they made it impossible. My friends at SAP claim, "SAP now has a very solid Master Data Management layer and fairly easy to use data management tools that have truly changed the baseline."  Whatever the truth to that, SAP has sold and sells on how their “integrated offering” (even if it is inferior to best of breed solutions for functionality outside basic transaction processing) was better from robustness and TCO perspective than all of those proven value generating innovative applications out there. The best of breed providers were trying to show that they can work with the SAP platform and deliver value. Let us call this the “SAP Cramdown versus BoB Kumbaya” story. The market place was clear on the verdict. That round went to the “cramdown” vendor. (Of course, the new genre of best of breed providers are coming with the SaaS story, which is a discussion for another day.)

Now SAP has to take that same strategy against Oracle, albeit at a bigger level. Oracle is coming in with a “higher robustness and lower TCO because we can provide you the whole stack” story against SAP. SAP is trying to show that they can interoperate with all hardware, middleware, and database options out there. Hence “Oracle Cramdown Vs. SAP Kumbaya.” Let us see if SAP has built enough chips to pull this off better than what the best of breed providers have been ( and are) able to do.

Karthik

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