The Simple Life: SAP Targets IT Complexity With New Generation Of Cloud Applications

With SAP CEO Bill McDermott vowing to reduce IT complexity for customers and partners, SAP Tuesday unveiled SAP Simple Finance, a new set of cloud-based financial management applications running on the vendor's HANA in-memory platform.

McDermott, in his keynote speech Tuesday at the Sapphire Now conference, also said SAP would begin offering its Fiori consumer-style client applications for free along with its business applications, a move channel partners applauded, saying it would drive customer adoption of SAP software.

"The most intractable CEO issue of our time is complexity," McDermott said, addressing many of the 25,000 Sapphire attendees in Orlando, Fla., as well as many more watching online. "Increasing layers [of management] are killing companies," he said, through rising costs, loss of accountability and lost productivity.

And IT has contributed to that complexity. On average businesses have 50 applications for every $1 billion in revenue, McDermott said. And 72 percent of IT spending goes for hardware and other technology that he said "maintains the status quo" and only 28 percent for IT that spurs innovation and change.

"We can't continue like this. We can't let complexity win," the CEO said.

Acknowledging that SAP itself and its products have been too complex in the past, McDermott vowed "a simpler SAP" and "a simpler customer experience."

The new SAP Simple Finance includes applications for accounting, consolidation, treasury, financial operations, forecasting, reporting, analysis, and risk and compliance. The applications can connect to business networks for exchanging data in real time with customers, suppliers, banks and other entities. And the software, which is deployed through the SAP HANA Enterprise Cloud, offers a range of built-in legal compliance and risk assessment capabilities.

Simple Finance is the first in a new line of applications. SAP hopes to have a complete line of "Simple" ERP applications by the end of this year, including supply chain management and CRM applications, said Bernd Leukert, in an interview at Sapphire. Leukert was put in charge of SAP's global development organization just last month following the company reorganization.

SAP introduced the Fiori applications one year ago in an effort to make it easier for users to work with SAP's back-end applications, as well as make it possible for mobile device users to access SAP systems.

McDermott said SAP would now provide the Fiori applications for free within underlying licenses of SAP software. Customers who have already purchased Fiori will receive a credit for future software purchases.

"Giving away Fiori for free? I think that's great. We've been talking about that," said John Clark, vice president of the SAP services line at systems integrator Cap Gemini, SAP's largest reseller in the North American small and midsize enterprise (SME) market, in a press conference at Sapphire.

"It's a very good call. That's really going to drive software adoption among smaller companies," said Akhilesh Tiwari, Global Head of the SAP Practice at Tata Consultancy Services, another SAP partner, at the press conference.

Seidor, a Spring, Texas-based SAP Gold partner, focuses on the SME market and SAP's message of simplification resonated with CEO Tomas Fertig. SAP already has been simplifying its product lineup over that past 10 years with its Business One and Business ByDesign offerings as the company has strived to expand sales to SME customers.

McDermott, meanwhile, hammered home the new mantra of SAP cloud powered by the SAP HANA platform. "HANA is the soul of everything SAP does," he said at one point during his keynote. "HANA integrates all of SAP's solutions in the cloud."

SAP now has 20 data centers worldwide with 70,000 customers and 36 million users of the company's cloud services. And the company has more than 1,500 companies in the HANA startup program.

Cap Gemini has been converting its SAP software-based vertical industry applications, including retail, energy and consumer packaged goods apps, and business analytics tools to support HANA, Clark said.

McDermott, speaking in a post-keynote press conference, also provided more insight about SAP's plans to help channel partners work with the vendor's cloud and HANA technologies. The company, for example, is now offering partners more free online training resources for working with cloud software and HANA.

The CEO made it clear that SAP will continue to develop and deliver on-premise software, including the channel-popular SAP Business One applications for small businesses.

"We have done very well with Business One in the SME channel," he said. We have a very large partner network that resells this product and implements it on-premise. We have put a great deal of emphasis on Business One and Business ByDesign on HANA, in the SAP cloud, and provisioning it as a service. We will also be open to partners that will take HANA and our small and midsize [enterprise] technology and offer it in their clouds," the CEO said.

"We really do think the radical simplification and consumption of software is a game-changer."

PUBLISHED JUNE 4, 2014