The lost unique selling proposition

SAP CEO Bill McDermott may be a great salesman - at least he did an excellent job of selling himself to his supervisory board chairman Hasso Plattner.

Selling is obviously in the American's blood. He doesn't care about strategy, IT megatrends, loyalty to SAP partners, or unique selling points - the main thing is to generate revenue and profits.

At his side, a highly talented CFO: Luka Mucic has managed to cushion his boss's excursions into non-SAP areas financially and present them in a positive light. But even Plattner now wonders whether cloud experiments like an app store - similar to Apple's iTunes - will make real money at SAP.

Plattner obviously doubts the effectiveness of imitation. After all, everything SAP is currently doing, other companies have done before. Instead of cultivating the unique selling proposition, salesman McDermott is currently running after every IT rumor and shamelessly raising prices -... up to 200 times!

Under material number 7.009.026 (SAP Sales and Service Order Processing), the 2016 price list lists the amount of 100 euros for 1,000 orders (Sales Unit Metric). Easy to calculate: One order costs 10 cents.

In the PKL 2017, under 7.019.146 (SAP Sales and Service Order Processing), one finds the amount of 20 euros for an order (Sales Unit in Blocks of 1, Metric is Orders). From 10 cents to 20 euros is probably a credit to any salesperson in the world.

Anyone who manages to present such a price increase to his customers without a revolution breaking out must be a genius! Congratulations to SAP CEO Bill McDermott: With a 200-fold increase in the license price, he has truly earned his new salary of 15 million euros.

But it's not just SAP's greed for money that is unsettling the community. SAP used to have a pronounced and well-deserved self-confidence with its ERP unique selling proposition.

Henning Kagermann and Gerd Oswald were modest with existing customers, but self-confident when it came to their own knowledge and skills. There is hardly anything left of any of these qualities.

SAP has changed from self-confidence to self-promoter Bill McDermott. He merely represents a copy of current IT trends - there has long been no trace of a unique selling proposition.

If SAP's war chest had not been filled to the brim, it would have slept through cloud and mobile computing. But with many billions it managed to buy up suitable companies, some of which were themselves on the verge of bankruptcy (see Ariba).

With SuccessFactors, Hybris, Sybase, Concur, etc., SAP managed to catch up with the IT megatrends cloud and mobile computing. Without Professor Plattner, NetWeaver would still be the preferred SAP platform today.

At the Hasso Plattner Institute in Potsdam, the Hana database platform was developed for SAP - along with the decision to go open source (Linux, Hadoop, Cloud Foundry, etc.).

And now they have missed another megatrend: Machine/Deep Learning. The Hana database can no longer be used for this purpose, which is why Google and Nvidia have to be used.

With TensorFlow from Google (open source) and the Nvidia GPU hardware, future AI functions will be implemented in SAP's ERP. Not a single one of these strategically important directional decisions was significantly initiated by SAP CEO Bill McDermott.

On the contrary: Instead of strengthening its own products and platforms, it is currying favor with Amazon, Microsoft and Google. Future Hana and S/4 cloud computing will take place on AWS, Azure and Google Cloud - no trace of HEC and HCP. A unique selling proposition looks different!