Last week, SAP held it’s annual academic conference, with the theme Enterprise-the Next Generation. Bringing together luminaries and thought leaders, including the remarkably visionary, Hasso Plattner, the Co-Founder and Chairman of Supervisory Board of SAP, and academic superstars such as Dave Patterson, Univeristy of California at Berkeley, Erik Brynjolfsson, Massachusetts Institute of Technology Sloan School of Management, and Blake Johnson, Stanford University.
So how do those who live in the “clouds” of thought leadership tell us that is relevant to future implementable enterprise application? And what role does SAP play in that future? For me, I am accustomed to SAP events driven by developers and users, which I considered a “real world” perspective.
Hearing things from a “top down” perspective, rather from the trenches, provided some very interesting perspective on what SAP might be envisioning for the future of enterprise technology. Let me tell you, the next decade wont be your father’s ERP or CRM chugging along in the enterprise, but is that good or bad news for SAP?
Some of the most interesting concepts discussed include:
- Research clearly show that hardware and software (read more specifically, ERP systems) do not improve performance by their existence; best practices already in place support technology but technology will not force best practices. Yet companies keep investing in technology and not organizational change, due to cultural reasons, complexity or simply the unwillingness to accept that the organization is fundamentally broken. I’ll posit that we already knew this, but having it publically reinforced, with data to back it up, makes it impossible to ignore.
- If one observation can be made about the enterprise of the future, its that data generation and analysis will rise dramatically, in ways we are barely capable of understanding, let alone knowledgeable about managing. We no longer collect data simply to have it “just in case” but so we can act upon it, in real time. Take the energy generation industry and smart grids. The average utility has 10M meters. Convert those to smart meters, which might make 100 reads/meter/day. You now have 1 billion reads/day and 100GB data to analyze (both to manage the grid and to potentially manage consumer usage), versus approximately 10M reads a month today, and data you simply use for billing. Managing and protecting this data is challenge enough, but analyzing it, in real time, is another matter. Mix in data generated from industrial production, transportation, social media and other industries people wish to mine and control, and the problem is mind boggling. The push is on to create the technologies that gather the data, leaving the “what now?” question in play.
- Enterprise technology has no champion in the user or partner base, helping demand new features and advances, and defining new use case, unlike the GPU industry, which has gamers (and game developers) constantly demanding more. Does such a champion quietly reside in the enterprise today? Possibly. But in the future, when all types of enterprises are collecting more real time data, from a vast, global network, and making real time decisions on it, (smart grids providing one of the richest and near reach case studies), I suspect such passionate champions will emerge out of necessity.
- In the data intensive industries of the future, centralization of data is required for analysis. But controlling data is perceived by business units, and individuals, as a way to control power. If the guy in the office next to you will not share the team budget with his own team, why would he release it to a centralized system, where the data can be scrutinized?
- Hasso Plattner strongly believes that large software companies are hindered in their ability to evolve to meet emerging market needs, burdened by too many lines of code, which he adamantly thinks needs to be reduced at SAP. But programmers, as he said, love their code, and much like data is power, code is power. Does that mean SAP can’t create the future as it envisions, or even evolve to keep up? Plattner certainly wonders about this. This has serious impact on future SAP strategy around new internal product development, and external product development, aka M&A.
One of the issues SAP has with promoting such ideas is credibility. Is SAP agile enough to move away from legacy code and models? Will customers and partners react favorably to major changes? Can SAP understand the requirements of the new business systems required in the not-so-long term-future?
Given this was meant as an academic forum, SAP didn’t exactly tip it’s hand on specific strategies, but it did open the lid on a big box of problems, making it impossible for the community to ignore the company’s response in the next year. Game on!
