Wednesday, September 17, 2008

Inside the Hype of TechEd 2008

A quick intro to PAC readers…

I’d like to thank the “Feeding the SAP EcoSystem” team at PAC for inviting me to be a part of their blogging team.

As I write my first piece for PAC, I am in a restaurant at the McCarran Airport in Las Vegas, where I just ordered some mystery meat I would not consume in non-airport conditions. While I wait to board my flight back to Massachusetts, it’s an ideal time to reflect on SAP TechEd 2008 and introduce myself to PAC readers.

You can see a link to my bio on the right column, but the short version is that I’ve been writing about SAP skills trends since 1995. After I launched in the summer of 2007, I added podcasting to the mix.

My take on TechEd ‘08

In my opinion, there were no “stop the presses” news releases at TechEd (you can check out the press clips and see if you agree...) Of course, two important items, the Oracle-SAP lawsuit and the pushback from customers over SAP’s maintenance fee increases, were not approved topics of discussion and received no formal airtime. At the TechEd press conference, we were told that no questions about the lawsuit would be answered. It was hard to resist not asking a question about it once the topic was muzzled, though I believe that the lawsuit will ultimately turn out to be nothing more than an expensive financial footnote for both companies!

SAP customer dissatisfaction with the maintenance fee increase is a bigger story, because it threatens to pose a setback to the impressive strides SAP has made with its customer base in recent years. But to be fair, the SAP customers I spoke to at TechEd were more focused on their own self-education than sounding off about the maintenance issue. A full discussion of the maintenance fee topic would consume the rest of this blog entry, so let’s put that topic in the “keep an eye on” category, and move on to the key themes of the conference.

My view is that most successful software vendors, SAP included, utilize a “carrot and stick” approach to motivate existing customers to spend more money. Prospective customers, of course, only see the carrot. The stick, in this case, is the maintenance fee increase, combined with the frustration of seeing a lot of sexy NetWeaver and eSOA demos, most of which cannot be utilized by the 4.6c customer base that has yet to upgrade. (By the way, SAP is supposedly dropping the “e” from eSOA in its latest product naming audible, but I’m keeping the “e” on there until SAP executives drop it from their PowerPoints!)

For the past few years, the real SAP “carrot” has been the perks of upgrading to the latest and greatest version of SAP, now ERP 6.0, and the features of that new platform, specifically, eSOA, and to an increased degree after the Business Objects acquisition, “Business Intelligence.” This is in line with the overall industry trend of repositioning ERP systems from transaction-based systems to intelligent application networks that leverage transactional data for strategic purposes.

The next thing…

The problem for SAP’s marketing team is that in recent years, customers have lost their taste for “the next big thing,” and they don’t tend to get too jazzed up about conference gimmicks like delivering cans of Coke onstage using NetWeaver Voice either.

What SAP customers want is not the next big thing, but “the next affordable thing” that can help their bottom line. Part of the appeal of both eSOA and Business Objects, is that both present opportunities for SAP users to do targeted projects that deliver a benefit without a massive infusion of capital.

So if SAP is banking so heavily on eSOA, why didn’t we hear more about it at TechEd? What SAP emphasized was not eSOA, but Business Process Management (BPM). eSOA is a technology that can help facilitate BPM, so we still see plenty of mentions of eSOA, but why did the emphasis shift? Cynics would say that SAP needed to trot out something new because “eSOA” has a few years of marketing mileage on its treads now, but I see a different answer.

The answer is that without BPM, SOA is ultimately going to fail, or at least fall well short of its buzz, and that would be very bad news for everyone in the SAP ecosystem. SOA represents the promise of innovating on top of the ERP core without altering the source code. Thus, one of the few things all ERP vendors agree upon is that SOA must not fail to deliver on this promise.

During educational sessions at TechEd, I found that SAP’s own instructors have different views on BPM, which sometimes adds to the confusion that these sessions are intended to alleviate. But one thing all BPM presenters emphasized at this year’s TechEd is that SOA without BPM is not going to work. Perhaps no one said it more memorably than Puneet Suppal of Capgemini, who, during a session he was giving with Marco ten Vaanholt, Global Head of the SAP BPX (Business Process Expert) community, said, and I paraphrase, “If your underlying processes stink, your SOA will stink also.” In other words, you have to get your act together on the BPM side before you can be effective with your eSOA projects. Yes, we’re back to “Garbage In, Garbage Out.”

This may open up a decent sized can of worms, because most companies who want to make business process changes will face organizational challenges. Still, the “process first” perspective does make sense. Properly realized, it will combine transactional stability with service-driven innovation, or maybe even co-innovation on top of that ERP core with customers and suppliers. This is the holy grail of ERP, and the best possible answer to the criticism of ERP’s historical stodginess when it comes to adapting to market conditions.

So that’s the context for SAP’s emphasis on BPM. And, just like “business process re-engineering” needed a tool (ERP) for it to gain commercial traction in the mid-90s, so does BPM require a set of tools, which is why SAP is now announcing the pending NetWeaver BPM release with vigor. If the popularity of the demo sessions are any indication, SAP customers are eager to learn more.

Netweaver BPM

Once code named “Galaxy,” the latest from the product team in Walldorf is that NetWeaver BPM will ship with NetWeaver 7.1.1, with a “fast track to ramp up program planned as of December 2008.” SAP does not want to be nailed down on a general release commitment for NetWeaver BPM (I know because I asked a BPM product manager directly), but my best guess is that a general release of NetWeaver BPM in time for the high power keynotes at SAPPHIRE 2009 will be SAP’s own internal goal. One pretty neat thing is that you can now download trial versions of both NetWeaver BPM and NetWeaver BRM (Business Rules Management) as part of SAP’s trial version of the NetWeaver Composition Environment.

With a new tool and a new approach comes the need for new skills. That’s a whole different conversation I will return to in future PAC blog entries. A “business process centric approach,” complete with new modeling tools, is going to require a different kind of SAP professional. This trend goes well beyond SAP, as we observe the overall convergence of business and IT, and the re-orientation of IT as being in the service of business drivers, with the goal of hiding the complexity from business users whenever possible.

The professional needed to facilitate these changes is being billed as the “Business Process Expert.” SAP is smart enough to realize it will need an ecosystem-wide response to train and prepare for these roles. That’s why we saw the emphasis at TechEd on two other announcements: the first-ever SAP BPX certification, as well as the release of "Process First," a book written by the SAP BPX community with an author credit to Marco ten Vaanholt, who led the effort to write, frame, and fine tune this wiki-based community project that resulted in a finished book. There’s a lot more to say about the skills side of BPM, but my flight is about to board, so this will have to wait for future blog entries. I welcome reader feedback about which aspects of the BPX skill issue are of most interest.

A lack of hype?

I want to close this entry with a few comments about the SAP customer base. With SAP, we are always aware of the hype factor, which is the gap between what SAP feels is important and what its customers place value on. In the case of BPX, as well as Business Objects, I find the hype factor to be surprisingly low. Customers may not be quite as pumped about these new trends as SAP’s marketing team is, but their interest level is high also. Evidence can be seen in the high attendance at relevant TechEd sessions; we can also point to the strong interest in NetWeaver BI, which has not been hampered by the challenges of combining Business Objects and SAP as much as some predicted. Then there’s the BPX Community itself, which at last count had more than 450,000 members, pretty big numbers when you consider the community was only launched in 2006.

But while the hype factor may be low, SAP customers are still more cautious about diving in than SAP is. One big adoption barrier: you have to be running on ERP 6.0 (and up to speed on NetWeaver) before you can begin to contemplate most of these new products, particular on the BPM/SOA side. We can point to customers on older R/3 releases who are still thinking in terms of ABAP and Basis, and their technical agendas are likely very different.

In conclusion, the TechEd 2008 headlines might not have been in large font, but the trends are indeed huge. It remains to be seen if the BPM era will deliver on its promise. One encouraging sign is the much closer collaboration between SAP and its customers, via SAP’s online communities. This should help keep the “hype factor” in check and keep SAP focused on helping companies solve their business problems - large and small.

Keep on checking back… I’ll be contributing more and more on topics from the field!