SAPPHIRE: SAP Canada speaks out

ORLANDO, FLA. – On Tuesday, day two of SAP AG’s annual user conference, SAP Chairperson and CEO Henning Kagermann took the stage to discuss the direction the company has been moving toward in the past year, and expanded on the current feeling of uncertainty in the marketplace.

Kagermann said SAP should be thought of as a trusted innovator, not just a safe haven for software application customers. He added that “uncertainty is here to stay,” and that company growth can not happen without innovation and “all innovation today is enabled by IT.” He added that IT budgets are going down and CIOs today have to invest with less.

According to Kagermann, SAP is focused on the following three initiatives: reducing total cost of ownership (TCO); making business more adaptable; and business growth.

He highlighted application interoperability as a key factor SAP plans to expand upon with its SAP NetWeaver, which can link disparate applications and data sources while exploiting the power of Web services, and supports non-SAP systems.

“We know not all technology comes together nicely, (but) this technology will allow that to happen,” Kagermann said.

“We’re saying that if companies use only SAP applications, they should use NetWeaver because it makes no sense to use another infrastructure provider,” he explained. “If they use SAP and other applications, they may want to use another infrastructure provider like IBM (Corp.) or Microsoft (Corp.).”

Some analysts see Kagermann’s roadmap of the future as a move to continue offering applications that achieve efficiency, while developing other new ones that will allow enterprises to adapt to a changing competitive and economic climate.

“As I see the strategy, it’s about agility versus efficiency,” said Henry Morris, an analyst with International Data Corp. “As a company, you need to operate efficiently; that’s a given. But at the same time, you need to be able to handle change and that’s where new applications, designed to meet specific industry needs, could provide a competitive edge.”

Also on Tuesday, Bill McDermott, SAP America’s CEO and president, said at a press conference that SAP America is also focusing on three key areas. First, it is instituting a new regional model to get closer to its customers, meaning that SAP executives will have a presence in all companies deploying SAP products regardless of location. As well, the company will be strengthening its executive board and all levels of management and will be making sure SAP is delivering business results.

McDermott said that “the machine is aligned,” referring to customers, leadership, and delivery.

SAP Canada Inc., meanwhile, took time at the show on Wednesday to announce its intention to go after a larger piece of the Canadian small and midsized business (SMB) market, and made it clear that Canada is an important market for the company.

During a press conference, Michel Brisson, president and managing director of SAP Canada called Canadian SMBs a “very important and very strategic marketplace in the country.”

He added that 60 per cent of SAP’s customers worldwide are companies with $500 million or less in revenues and that by 2005, 15 to 20 per cent of SAP’s global software revenue will come from SMBs.

When referring to SAP Canada’s focus on SMBs, Michel Vincent, vice-president of SMBs for SAP Canada said “I feel like I’ve met the love of my life and I want to talk about it.”

He said that he is convinced there is global support for the SMB initiative and also, that the fabric of Canada’s economy is based on SMBs.

According to Vincent, SAP’s SMB solutions have two components: SAP Business One which is designed for smaller businesses and SAP All-in-One designed for midsized businesses.

SAP Business One – which will officially launch in Canada by the end of 2003 – will offer enterprise software solutions to organizations with as little as $1 million in revenues and only a few employees.

Vincent said it is SAP’s goal to get pilot Canadian customers “on board” with the U.S. version of the product then switch companies over to SAP Canada as soon as the solution becomes available.

SAP’s midsize solution, SAP All-in-One, is designed for SMBs that require a high degree of industry-specific functionality.

According to the company, the SAP All-in-One solution offers this functionality out-of-the-box for processes including: managing financials; human resources; supply chain management (SCM); and customer relationship management (CRM).

McDermott made an appearance at SAP Canada’s press conference to say that he fully supports the Canadian company’s push for the SMB market. He added that SAP as a company wants “to show a very precise dedication to Canada,” referring to the fact that SAP doesn’t manage Canada as a region of the United States like many IT companies do.

McDermott added that SAP is not worried about going up against the “Microsofts of the world” in the SMB market because “there is enough elbow room for everyone.”

Vincent also announced renewed channel agreements with three Canadian companies: Plaut Canada, The Resolution Group and Sylogist Ltd., which will see the companies resell, distribute and provide support for both SAP SMB offerings.

SAPPHIRE runs from June 16 to June 18. SAP Canada can be found online at

– With files from IDG News Service