It's not easy to keep reinventing yourself and the workings of a global IT corporation. The late Harvard professor Clayton M. Christensen described the paradox in his revolutionary book "The Innovator's Dilemma". What to do when the company is a global market leader, such as IBM, SAP, Apple and Accenture? How to succeed in digital transformation without cannibalizing the current customer base and product successes? Why incumbents lose the competition for breakthrough innovations? Professor Christensen: "If a company tries to develop a disruptive technology to the point where it meets the needs of customers in established markets-which most leading companies do-its failure is all but assured."
SAP CEO Klein and his colleagues on the Executive Board are on a delicate mission: They have to reposition SAP against successful competitors such as ServiceNow, Uipath, Workday, Oracle and Salesforce, as well as numerous hyperscalers and start-ups. At the same time, they have to be considerate of 440,000 existing customers. It's the classic "innovator's dilemma" that Christian Klein doesn't dare address - and that Professor Hasso Plattner demonstrated in 2014 on the Sapphire stage in a discussion with Professor Clayton M. Christensen, see page 20 of this issue.
SAP is committed to a metamorphosis. It will not succeed. Christian Klein lacks the courage and SAP knowledge of 50 years. A month ago, this statement would have been blasphemy at the ERP world market leader. But the naivety on the Sapphire stage in 2022 showed the whole inability: Everything has been there before! In the fifty-year history of SAP, the partner concept of Christian Klein and his colleague on the Executive Board, Julia White, is the 99th attempt to be there for existing customers on an equal footing with partners. A partnership with Apple, as Christian Klein proudly presented, already existed in 2016 with a handshake between Apple CEO Tim Cook and ex-SAP CEO Bill McDermott, see page 20 of this issue. Nothing new under the Sapphire spotlights.
SAP has a successful past and all the opportunities for the future. There is a lack of inspiration. There is a lack of knowledge about SAP's history, so the young board around Christian Klein is making all the mistakes all over again. A Gerd Oswald or Michael Kleinemeier could naturally put an end to these inglorious goings-on, because they have already marched through all these valleys of tears. Klein, Müller, Saueressig and White are making the same old mistakes for the first time themselves - they deserve the experience, but they are endangering SAP's existence.
The few innovations, such as Leonardo, were carelessly and irresponsibly thrown into the sand. SAP is running behind the megatrend of cloud computing. Christian Klein is no fool: He has recognized that SAP needs to change. SAP needs a metamorphosis - similar to the one Microsoft initiated many years ago. But Microsoft was fearless. Microsoft was not afraid to corrupt its own business model so that a Microsoft that was all the more radiant would emerge from its decline.
The figures for the past quarters give the SAP Executive Board hope. While total revenue barely grew in 2021, the cloud business recorded an increase of 17 percent. And yet Christensen's sentence holds true: "If a company (SAP) tries to develop a disruptive technology (S/4 Hana Cloud) to the point where it meets the requirements of customers (SAP's existing customers) in established markets (SAP Community) - which most leading companies do - its failure is almost certain."
