SAP Buys LeanIX Instead of Cooperating

It is an adolescent reflex to want to own everything. SAP is preparing to acquire its partner LeanIX for around one billion EUR. Signavio's misfortune seems to be repeating itself.
Peter M. Färbinger, E3 Magazine
September 7, 2023
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SAP, Signavio, and LeanIX harmonize

What fits well technically and organizationally does not necessarily make strategic and visionary sense. The combination of ERP from SAP, process mining from Signavio, and enterprise architecture management from LeanIX can add a lot of value to the digitization of existing SAP customers. When migrating from SAP ECC 6.0 to S/4 Hana, it is necessary to get rid of the old and to digitize structure and process organization. Here, Signavio can critically scrutinize some ERP processes and perhaps eliminate some Abap modifications.

As an architect, LeanIX focuses not only on ERP, but on all of a company's IT applications. The start-up from Bonn is thus an enterprise architect and not an ERP, CRM or SCM architect. In this sense, LeanIX is a universalist, while SAP is a specialist. Regardless of revenue and number of employees: LeanIX is more than ERP and thus too big for SAP. If the master builder (SAP) now buys the architect (LeanIX), the master builder increases its power and influence. However, this results in no added value for either the architect or the customers (SAP community).

Panic buying at SAP

The SAP community is familiar with SAP's reflexive behavior: first disinterest, a development is slept through, then panic and wild actionism with often ill-considered courses of action. SAP of course slept through the CRM trend toward customer experience. In a panic, it bought the U.S. company Qualtrics for eight billion EUR. As was to be expected, first SAP CEO Bill McDermott and later SAP CEO Christian Klein could not solve any problems throught the acquisition. And so Qualtrics was sold. It is only thanks to the skill of ex-SAP CFO Luka Mucic that this mistake was at least a financial gain.

First, the Munich-based start-up Celonis was on SAP's price list, then Celonis refused to be bought by SAP. Deeply offended, SAP eliminated the former partner from the price list and, in an act of defiance, bought the Berlin start-up Signavio. The integration of Signavio into the SAP universe has not succeeded to this day. SAP Cloud ALM is still a construction site. But Celonis now has a valuation of 13 billion EUR, see also the fantastic Celonis report by my colleague Christina Kyriasoglou in the German Manager Magazin: how Germany's most valuable start-up wants to expand (German only).

Freedom above the clouds

Should LeanIX co-founder André Christ succeed in remaining independent and free, then my colleague Christina Kyriasoglou from Manager Magazin will probably write a similar success story about LeanIX in a few years as she did about Celonis a few weeks ago. But should LeanIX now be taken over by SAP and thus sink into insignificance, the SAP community will be significant poorer because of it.

Of course, after Signavio, SAP also needs LeanIX to present a credible cloud computing story to customers. SAP Cloud Application Lifecycle Management (ALM) is a never-ending construction site and without LeanIX's Enterprise Architecture Management (EAM), it is only an attempt and not an answer. SAP needs not only Signavio for consistent ALM, but also LeanIX, and ultimately Tricentis for automated testing in the public cloud.

The Belly of an Architect

SAP CEO Christian Klein should definitely watch director Peter Greenaway's 1987 film "The Belly of an Architect" to learn that real life can be complex and dangerous, but also full of surprises. Naturally, Klein wants control of an ALM roadmap. But sometimes collaborations make more sense than brute force; see the aforementioned film by Greenaway. The SAP community, which currently already uses LeanIX for many non-SAP applications, would not be improved by a takeover by SAP. LeanIX, like Signavio, would become just another construction site in the SAP universe, but without added EAM value for customers.

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Peter M. Färbinger, E3 Magazine

Peter M. Färbinger, Publisher and Editor-in-Chief E3 Magazine DE, US and ES (e3mag.com), B4Bmedia.net AG, Freilassing (DE), E-Mail: pmf@b4bmedia.net and Tel. +49(0)8654/77130-21


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