Is SAP Still Missing the Mark on Mobile?

We are at a point in enterprise mobility where everyone has assumed it is a given but no one has exactly figured it out. Is SAP shooting itself in the foot by trying to have a big fixed cost (SUP) and high variable costs (uber-expensive apps), meaning that they'll have to talk people into surmounting expensive barriers to entry on two separate fronts. 


Consumerism and Platforms
Most people think that the "consumer experience" is about things working seamlessly and being super intuitive. That's half the story (and a big half, to be sure), but the other half (and the easier half, to be sure) is choice. We've all, I'm sure, read the Google Platforms rant. The reason Platforms are great is because if you can own the data and the infrastructure (which are the most valuable bits -- sort of like the bacon of IT) and you let others extend it and propogate it, you win without doing a whole lot of the work. You want to own the platform.

Let's use mobile Twitter as an example. Sure, you want to sell directly (the mobile Twitter website) and you'd like to have a brick and mortar store of your own (the official Twitter iOS app) and you might even buy a distributor (Tweetdeck), but in the end you really mostly just want people to be writing and reading tweets. That's why you build out an API and let all sorts of other people sell your product for you. And other people selling your product is a good thing. 

That gives people choice, and people like choice (I hate Tweetdeck, but I love Hootsuite, which enables me to continue to use Twitter's core product without using it's distribution). It also generates competition, which makes your product even more valuable in the long run. Enterprise software vendors need to remember that what they really want to own is the tweets data within their systems of record.


Developers Wanted
SAP is getting closer to having a fleshed-out mobile developer ecosystem, but at present it isn't open enough to generate a lot of innovation or competition -- the table stakes are just too high. SAP needs to make sure the price is low enough to engage enough developers to give users choice. Need a mobile solution to approve work orders? It sure would be nice to have a couple of different apps that are inexpensive enough to try out. 


In order to get those apps you need a robust developer ecosystem. In order to get that robust developer ecosystem, you need to leave enough money on the table for those developers, and you need to make it really easy for them to develop software (check out the 4:05 mark of JD-OD's video).


The Back of the Napkin

Per SAP CIO Oliver Bussmann, SAP manages some 12,500 iPads and those iPads have downloaded around 120,000 apps from their Afaria appstore (that's around 10 apps/user). For SAP. Customers, each of those apps will cost somewhere between 25 and 100 euros, so we'll say that these each average $50/app (yes, I did just switch currencies - it's cool, though, since SAP can handle that). That means that for each user, which might download 10 enteprise apps, we've effectively doubled the price of a $500 iPad (presumably people important enough to warrant more memory or 3G connections would warrant more/better apps as well) and that is before the price of SUP, Netweaver Gateway, and Afaria are taken into account. 


To justify that sort of expense for the average mobile-enabled user, you have to basically disable their desktop experience to save on that cost. I for one don't know many people that are willing or able to totally leave their desktop or laptop behind yet. The easy solution? Charge less for apps. The problem is, that's the only place third-party developers can currently make money (and they have to make enough to cover their own infrastructure first).

So Where Are We?
The solution -- and one, I might add, that'll be hard to swallow -- is that SAP needs to give up on making money at every possible point in the "enterprise data to mobile device" supply chain.

1. Give developers access to SUP, Netweaver Gateway, and Afaria for free to learn the technology. This will allow certain shops to participate in the market that never would have otherwise. You'll end up with some crap applications, but you'll also unearth some gems. The free market works in an app store.
2. Charge customers for the mobile infrastructure one-time. Let them connect to it via whatever means they want. This should not be a tremendously high price. How much extra do Workday or Salesforce customers pay for their mobile access?
3. Do what you can to keep App prices down. This will largely be up to the developer, but work with them to encourage "creative" pricing. 

SAP-broadly should be trying to learn from what BusinessObjects is doing in the mobile space. It has had some struggles, but it is poised to move enterprise business intelligence to the mobile device because it has figured out the cost (an enterprise mobile service which isn't cheap but also doesn't seem to be a tremendously huge obstacle) combined with a couple of solid if not perfect free applications. They also have a developer ecosystem that is willing to play because they have low barriers to entry. This means you only have to pay once for the platform and then can distribute it however you see fit. This is the sort of model consumers have come to expect and that enterprises should flock to. 


I understand SAP wants to make money everywhere in the process, but they have to remember that their back-end systems still being relevant in 10 years will be largely dependent on enterprises being able to access and manipulate that data from anywhere. Making it really expensive and unattractive to do that right now isn't going to help on that front.

Of hope and databases

About this time 2 years ago the former GBN was pulled into the broader ASUG user group, and I was selected into the SAP Mentor program. This was really the first time I had been exposed to the broader SAP community (sorry in advance, broader SAP community) and since that time there has been one common theme in every executive keynote that SAP has been involved in. That theme has been HANA.

It isn't that I don't like HANA. I actually really do. I think it has a ton of potential to create real customer value and to eventually substantially lower the total cost of ownership for many companies. Unfortunately for most companies, eventually isn't quite here yet (and hasn't been on any given day for the last couple of years). Has HANA changed some games? Yes. Has it changed the game? Not quite yet.

Wondering why I care so much about discussions surrounding a database technology that I may well never use? Because it comes at the expense of discussing some fantastic, ready-to-use and reasonably-affordable database technologies that I may use. Everyone knows SAP bought Sybase for mobility, but the real jewel of the deal, at least to me, was the opportunity to hurt Oracle where it hurt -- by turning off Oracle database licenses and turning on Sybase database licenses. Unfortunately, it's been very tough to get an SAP executive to talk about Sybase data solutions (except for the occasional throwaway comment) during a keynote since the acquisition. That all changed this morning during BI2012 when the keynote given by Steve Lucas and Timo Elliott included a demo of data being held virtually and in the cloud by Sybase IQ. That in fact carried over to a HANA-specific microforum where Lucas spoke candidly about how the HANA/ASE/IQ technologies fit together into a unified portfolio.

I think SAP did a brilliant thing by finally folding some Sybase products (ASE, IQ, Replication Server, SQL Anywhere) under an umbrella that really genuinely included a product that was developed in-house (HANA). That meant that the people in one database sales organization aren't trying to sell their SAP database products against different SAP database products that happened to fall under a different part of the field sales organization. This gives an SAP account representative the flexibility to actual provide their customer with an optimal solution. Crazy, I know.

SAP stated that it would be the #2 spot in the database market by 2015. HANA alone wasn't going to do that. With an integrated portfolio that includes relational, columnar, mobile, and in-memory options -- and some work in truly integrating them with each other and into their full analytics stack -- I think they may actually have a chance.