The secret SAP strategy

SAP is under tremendous pressure. The harmony that has grown and the trust between existing customers, partners and the community have faded.

Mobile, cloud and in-memory computing are attracting attention, but bringing more turmoil than revenue.

The SAP balance sheet can only be saved by non-IFRS key figures, as journalist Sabine Gusbeth from "Euro - Das Magazin für Wirtschaft und Geld", issue 3/2016, writes on page 33:

"The software group SAP reported preliminary figures for 2015 at the end of January: Operating profit for the full year (non-IFRS) increased by 13 percent. Operating profit (IFRS), on the other hand, was down by two percent, while profit after tax was down by as much as seven percent.

Certain costs for acquisitions, restructuring and legal disputes are eliminated. At least: On its website, the software group points out that the self-defined non-IFRS measures are of limited use and that the eliminated amounts could be material for SAP."

Don't trust any statistics that you haven't falsified yourself, some readers may think. Self-constructed non-IFRS figures are counterproductive because they deprive existing customers and partners of orientation.

Help comes from the user association DSAG:

The 2016 investment survey paints a realistic picture of the plans and wishes of the German-speaking SAP community.

The result can be summarized with an almost unanimous rejection of S/4, great skepticism about Hana and complete lack of understanding for HEC and HCP (Hana Enterprise Cloud and Hana Cloud Platform).

SAP's two key strategic directions - cloud and in-memory computing - are being mercilessly punished, according to the DSAG investment survey.

Another "orientation aid" for the SAP community comes from the analysts at Gartner, who raised that the published cloud figures of all major IT providers hardly stand up to a deeper examination.

How much of a threat is this to SAP's existence and business model? Surprising answer: Not at all!

SAP is very likely to have a very successful future ahead of it.

The self-constructed non-IFRS figures and the self-praise at this year's annual press conference in Walldorf and at the Capital Markets Day in New York City at the beginning of February serve to distract and obfuscate.

The plan to even more sales, profit and wealth is different!

The answer can be found in the IT stack, the top level of which SAP, as the global ERP market leader, already conquered with R/2 and has since massively expanded with R/3, ERP/ECC 6.0 and Business Suite 7.

There is no danger here. SAP is the ERP monopolist. But this successful business model also no longer promises spectacular growth: But there are still layers beneath the ERP that need to be conquered or eliminated - so that ultimately more budget remains for the top level.

The air must be taken out of the stack below, because IT budgets will no longer grow dramatically.

What is Hana?

A disruptive innovation or a poison dart for Oracle, DB2 and SQL Server? By its very nature, Hana is an excellent in-memory computing database, but even more important is the strategic component: Attractive licensing models push the other database vendors out of the market and capture another piece of IT stack.

Why are so many server suppliers being certified for Hana?

The higher the competitor density, the lower the Hana server prices. This is where the existing SAP customer saves. Theoretically, more budget remains for S/4.

And SAP's love of open source like Linux, Open Stack, Cloud Foundry and Ceph?

Is honestly run, but has another ulterior motive: SAP wants to prevent any new dependency of its existing customers on other well-known IT providers.

Cloud - yes, but either your own with Open Stack and Cloud Foundry, but not AWS, Microsoft or Google. Ceph and commodity hardware is not yet a threat to NetApp and EMC.

In the coming years, this picture will change. Then the whole Big Data stack will be an open source project and Hana will make use of it via Hadoop.

For the time being, SAP's last and soon to be most successful spearhead is the legendary SolMan, in order to dominate the entire IT stack.

Previously a Swiss-IT knife for managing SAP infrastructure, version 7.2 is a power claim to provide all the functions of a management suite, from support to business process management and compliance to testing.

Why was the contract for HP OpenView terminated? Why did Aris become a non-word in Walldorf?

Everything is aimed at driving unnecessary competitors out of the IT stack and offering the perfect ERP architecture with the triumvirate of NetWeaver, Hana platform and SolMan.

If SAP no longer has to share the IT stack with anyone, the plan is for IFRS revenue and profit to rise again.