SAP’s marketing machine vies to offer the corporate formerly called “that German ERP vendor” a full new identity. Here is what customers should know.

SAP was a stalwart tech vendor for greater than 40 years. With 251,000 customers, it is the acknowledged market leader for business applications. Two-thirds of the globe’s business transactions run on SAP systems, SAP says.

And yet, SAP can also be in the course of an enormous make-or-break transformation. It’s unabashedly rebranding itself as an innovator in database and platform technologies. It has gone “all in” within the cloud because its leaders know core on-premises ERP revenues are in decline. It’s spending billions on splashy acquisitions — something it historically saw as a weakness. And it has embraced consumer trends similar to social collaboration and mobility with gusto.

Its intended transformation is Prince-like. SAP’s marketing machine has deployed its vast resources to make the corporate (formerly) often called “that German ERP vendor” right into a “platform, in-memory and cloud software” market maker. 

SAP’s top tech chief Vishal Sikka, who have been orchestrating this transition with the backing of co-founder Hasso Plattner, recently said that his company is at an inflection point. It will even be called a tipping point. Or maybe more accurately, some extent of no return — once those juicy on-premises licensing and upkeep revenues begin to wither, what is going to buoy each quarter’s earnings? And what if its database play — the much-hyped HANA in-memory database platform — doesn’t convince enough existing and new customers to show clear of the database systems of Oracle, IBM, and Microsoft?

SAP has a plan for all that. And here’s my tackle the four notable ways SAP is reshaping its product portfolio — and identity — inside the process.

One platform to rule them all
SAP’s Sybase acquisition was the catalyst for its entry into the database systems market (which it had traditionally acquiesced to Oracle, IBM, and Microsoft) and its embrace of in-memory technologies for processing big data sets. But SAP is not only content with being a “database provider:” SAP now desires to own the platform — not only the apps, not only the database, not only the mashing up of information sources, however the whole enchilada. That is what SAP HANA is today.

So just how committed is SAP? “It’s not that the appliance is the longer term. The platform is the longer term,” Sikka told me at SAP TechEd 2013. “The applications are important for our future. But applications are actually dwarfed by the platform.”

Got cloud computing religion?
When Marc Benioff starts taking shots at you on Twitter, then i suppose he must believe you’re some kind of threat to his cloud turf. The leaders of Salesforce, Workday, and NetSuite have reserved a number of their best zingers for SAP’s cloud products.

In any event, SAP seems to be losing about a battles in an try to win the War of the Cloud — the message now’s that everything and the kitchen sink goes to the cloud. For example, SAP is eating its own pet food (the seller actually prefers “drinking its own champagne”) with its Business Suite on HANA: It ported all of its ERP applications to run at the HANA platform and has realized some significant results. Now, will customers do an analogous?

Licensing flexibility? Really? Yes, really
This year, SAP has addressed some long-term customer gripes about its licensing policies. As an example, SAP followed up an on-premises-to-cloud license program in July with more licensing news in August: SAP now allows customers to terminate on-premises licenses to buy new on-premises software, and offers customers the choice to terminate some licenses with no new purchase and recalculate their maintenance payments.

Now, let’s not bestow some style of saintly title to SAP — there are many complex “Terms & Conditions” inherent inside the new “Terms & Conditions,” and as SAP told my publication: “Some customers may gain advantage, others won’t.” But it’s one giant step inside the right direction.

Auf Wiederschein, baby!
This is a touchy subject at SAP, and can be, to be diplomatic, more perception than reality. Nevertheless, there are whispers at SAP events among customers that the balance of power, historically entrenched at SAP’s global headquarters in Walldorf, Germany, has shifted to the Americas, which generally delivers 35 percent to 40 percent of all revenues.

In 2014, SAP will take a break from its co-CEO model, and US-based Bill McDermott will hold the only CEO mantle. Sikka is predicated in SAP’s Palo Alto confines. And a lot of the “game-changing innovation” (to exploit SAP parlance) is emanating from the Americas and its labs — the emerging cloud businesses, new products equivalent to Fiori, and the united states-based acquisitions (Ariba and SuccessFactors).

There’s little doubt that modify is inside the air at SAP — now it’s as much as its customers to make a decision whether they’re able to roll with SAP’s changes.

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