Dusseldorf In its 51-year history, SAP has tried several times to win over medium-sized companies – with mixed success. The largest German software manufacturer is now launching a new initiative: Under the name “Grow with SAP”, the group is marketing a product package that is primarily aimed at companies with 500 or more employees.
The initiative is intended to make it easier for customers to introduce S/4 Hana Cloud, a business program for tasks such as accounting, logistics or procurement that runs in the public cloud, i.e. in SAP data centers. It is a “tailor-made offer” that helps medium-sized companies to “expand their business,” said SAP boss Christian Klein.
The manager wants to win a new target group for SAP. The software giant’s products for controlling business processes – called ERP in technical jargon – are considered the standard in international corporations. Medium-sized companies and start-ups, on the other hand, often use the solutions of other manufacturers. In this segment, SAP is just one provider among many.
The new SAP offer is primarily aimed at new customers
However, if the software manufacturer wants to do more business with medium-sized companies, it will have to change, for example in sales. The user organization DSAG warns that sufficient consultants are needed for the introduction – otherwise it will be difficult to push through the offer on the market.
SAP already has a medium-sized product, Business By Design, which was presented in 2007 and is used by more than 2,700 companies. The group had recently reduced investments in the old system. He will continue to offer it anyway, “without an end date”.
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“Grow with SAP” is primarily aimed at new customers who want to introduce S/4 Hana Cloud. To do this, the group bundles its core product with other components, such as the Build platform, which offers tools for the simple development of business applications and the automation of processes.
The SAP boss promises medium-sized customers a “tailor-made offer”.
(Photo: dpa)
In addition, SAP promises support during the introduction, for example through a predefined methodology and training courses. In the best-case scenario, the new system should be up and running within four weeks – a requirement that is considered very ambitious in industry circles.
The breezy name of the new initiative is no coincidence: “Rise with SAP” has been a commercial package with a similar focus on the market for two years. It is intended to make it easier for existing customers who are already using an ERP solution from SAP to switch to S/4 Hana Cloud. According to market researchers, more than half of the system’s sales are based on it.
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The goal is the same in both cases: to strengthen the business with the public cloud – as many investors and analysts are demanding. “SAP wants to gain traction with ‘Grow’, there are significantly more small and medium-sized companies in the world than corporations,” says Holger Müller, analyst at Constellation Research and familiar with the software manufacturer.
Müller sees potential for “Grow with SAP” in companies with international growth ambitions, such as medium-sized companies on an expansion course or start-ups. If successful, the initiative could bring new customers and additional sales to the group.
Lots of competition in the midmarket
However, Müller sees challenges. “The question is: are there enough of these companies? And what about the competition?” SAP’s rival Oracle already has its own product line called Netsuite for customers of this size and is investing heavily in further development. There are also many smaller competitors such as Xentral and Pro Alpha.
So far, no one in the software industry has managed to successfully market a product for large, medium-sized companies. Holger Mueller, Constellation Research Analyst
In order to stay competitive, SAP has some work to do. For example in product development: It is important to reduce the complexity of S/4 Hana Cloud. That’s not easy, emphasizes analyst Müller: “No one in the software industry has ever managed to successfully market a product for large, medium-sized companies.”
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The Dax group also has to change in sales. In this market segment, it is common to sell products via video conference and also to make demonstrations digital, says Müller. Ordering should also be simplified. “The question is: Can SAP do volume business?” says Müller.
SAP points out that IT service providers can market the product and add their own solutions, for example for individual industries. It is unclear how many of these partners will enter the business, the group only names a handful. Among them is the All for One Group, which is one of the leading German providers in the medium-sized business market.
Many details are not yet available, so the user organization DSAG is cautious about the new offer. “Based on the information currently available,” Grow is attractive if companies want to use the public cloud. However, it should not happen that SAP neglects other offers. “Cloud yes, cloud only no,” said Board Member Thomas Henzler.
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