Defragmentation and atomization

The idea behind SAP's desire for cloud only can be described as "greed for money". There is nothing that the public cloud can do better than other IT architectures, except drive margins to over 90 percent with a huge scaling effect. Now making money doesn't have to be a bad attribute. But if the only yardstick is the size of the bank account, then the ERP concept of an R/3 system will be perverted on SAP's 50th anniversary.

For successful existing SAP customers, R/3 and ECC 6.0 are the basis and Abap modifications the freestyle. Because SAP's classic ERP systems can be defragmented and atomized with a client/server architecture, they gain in individuality, innovation, agility and resilience.

The current discussion is not about on-prem or cloud, but individualization versus standard. Who is the most successful cloud provider? AWS. The highly talented AWS computer scientists are not much different from their colleagues at IBM, Microsoft, Alibaba, Google or SAP. Rather, the secret is a unique scaling effect based on standards cast in silicon.

On the website of editor-in-chief Färbinger the following comment can be found: "SAP's USP is the fully integrated ERP system. In principle, customers don't care whether this is used in the public or private cloud or on-prem, as long as they can retain their individuality. If SAP wants to retain this USP, it must make its ERP-related products technically, functionally, comprehensively and internationally usable, and offer industry variants where necessary."

Many members of the SAP community share the following view: SAP will not gain a USP in the database sector or in the operation of cloud applications - even its consulting expertise is interchangeable. SAP is the global market leader for integrated, feature-rich, internationally applicable ERP systems. There are an infinite number of expansion and modernization options there - that's what SAP should focus on. So it's the added value that comes from defragmentation and atomization.

In a world where many things are becoming more stringent, standardized, and compliant, SAP's existing customers can carve out a competitive edge with individuality and innovation. But SAP's efforts are going in the opposite direction: With a public cloud and strict rules on the Business Technology Platform, the ERP group is trying to further increase its gross margin.

No-code/low-code concepts are only the fig leaf in front of a uniform ERP architecture. Similar to Hana, which is only superficially supposed to provide more speed, but ultimately means sole control of the database market in the SAP community. AnyDB is now also available with in-memory computing add-ons, so performance is no longer a unique selling point for Hana in the meantime.

Behind all these questions and criticisms lies a concern about SAP: Will we still have an ERP world market leader from Germany in ten years' time? many of my regular sisters and brothers are asking. The more homogeneous and compliant the SAP offering becomes, and the more the share price will fall in the coming years, the easier and more likely a hostile takeover will become. A normalized SAP with 90 percent of its existing customers in the public cloud and a share price well below 100 euros is a sitting duck for the hyperscalers of this world.

Only a heterogeneous, individual, atomized and defragmented SAP community can spoil the appetite of a hungry hyperscaler. Accordingly, what is being sought is a Z namespace 4.0 that works on-prem and in the hybrid cloud, that permits every type of programming from Abap to no-code/low-code, and that enables value-enhancing defragmentation and atomization of the ERP. The success of ECC 6.0 lies in the individualization and the hundreds of DSAG working groups, a successful CCC concept and a very lively SAP partner landscape. Any attempt, such as Rise with SAP, to conform the SAP community is counterproductive.