SAPPHIRE : Plattner promises lower TCO, higher flexibility

“People are getting more pessimistic about the economic outlook for the remainder of this year and even next year,” said Hasso Plattner, co-chairman and chief executive officer (CEO), in a keynote speech Thursday at the company’s Sapphire customer conference and trade show in Lisbon, Portugal. “Everybody is challenged to rethink strategies and lower costs. We’re no exception.”

In the course of his two-hour speech, Plattner dropped several nuggets of information providing insight into how SAP is evolving:

• “Total cost of ownership is more of an issue than ever before.”

• “Openness of software is a necessity, not a concept.”

• “We need to personalize our front-end systems.”

• “Our portal is a huge step forward in becoming a user-friendly system.”

• “SAP needs to become an all-around partner, and not just in the back-end.”

One of the main goals of a chief information officer (CIO) today is to lower total cost of ownership (TCO), said Plattner, conceding that SAP wasn’t always helpful on this front in the past. “Maybe we got slightly out of hand with over-consuming servers in the past,” he said. “So we designed mySAP to fit in one box with one database: this results in real cost savings.”

Customers demand open standards, and SAP will continue delivering systems built on these, according to Plattner. Although the German company must develop software to run on operating systems built by Microsoft Corp., equally it must create products “for non-Microsoft platforms, like open source systems,” he said. “We would be foolish to limit ourselves to any one system.”

Plattner was blunt in his criticism of the company’s heretofore failed efforts to personalize menus for its front-end applications. “I’m sorry to say that all our users still have only one menu,” he said. “This is not an option. We need to personalize our menu and we will.”

In a push to make systems more flexible and personal, SAP will focus heavily on its portal strategy, according to Plattner. Portals, he said, are an ideal way to deliver user-specific front-end applications. They’re a must, he said, adding that the company will be making some major product announcements in the months ahead.

In the same breath, Plattner highlighted the company’s push into cross applications, which allow business processes to seamlessly cross company departments and systems. “These are another example of the flexibility and adaptability we’re striving for,” he said.

But it’s the push to deliver more than just software that raised some eyebrows at the Sapphire show. No, SAP isn’t turning into a service provider to compete with the likes of KPMG but yes, the company has every intention of delivering more service than it has in the past, Plattner said. “We have to be able to adapt our systems to customer’s individual needs,” he said. “We need to be there as consultants and programmers to help build intelligent solutions for all departments, not just one.”

Particularly with its mySAP portal technology, SAP must become “way more involved in projects,” Plattner said. “We’re definitely going to offer more service because our customers demand it. We need to go that extra step, but we’re not going to turn around and become a service provider.”

In addition, Plattner said the company is committed to research with no plans to cut back, despite a cost-cutting program to cope with weak software spending.

As to speculation that he might take early retirement, Plattner said it’s “the nature of the aging process that I will retire some day, so go on speculating.”