We’re in a strange period when it comes to analyzing SAP market trends. It’s getting tedious to continue to dwell on the downturn, but impossible to ignore its significance. Anyone who makes trends assessments is in the prediction business to some degree, but now more than ever, we’re in uncharted waters. Even those who take the temperature of the IT spending market are coming back with different answers. Unfortunately, the majority view seems to fall in line with the rather grim view of decreases in tech spending noted by the Wall Street Journal “Business Technology” blog recently.
But we’re not going to talk about the downturn in this blog entry. Instead, we’re going to turn our attention to a happier subject: an area of SAP that continues to get spending action despite the cutbacks. That product area is NetWeaver BI. Not only is BI a definite area of investment for SAP customers, but there is continued interest in making sense of the Business Objects product line and how it might benefit the SAP install base.
When SAP first acquired Business Objects, there was some initial hesitancy from SAP customers around how the BO acquisition would affect the long term roadmap. The hesitancy was perfectly reasonable since it seemed logical to assume that some of BO’s top-of-the-line reporting products would eventually replace some of SAP’s reporting tools, such as the BEx Analyzer, which many SAP customers are heavily invested in despite some limitations in user presentation and customization costs.
I’m not going to spend a lot of time on the roadmap in this blog entry, but SAP has been kind enough to grant me permission to share a couple of their recent roadmap slides, so if you’d like to take a closer look at them, this PDF (52K) is a view of SAP’s Business Intelligence roadmap prior to the BO acquisition. This next PDF (54K) shows the roadmap of the combined BI/BO portfolio. Both of these are higher-level roadmaps; SAP has more detailed roadmaps it will provide upon request.
We have to be careful about fussing too much over roadmaps, the reason being that emerging needs for new ways of slicing and dicing data, such as harvesting unstructured data from the “Internet Cloud,” has all BI vendors scrambling to keep up. We may find that the most popular reporting tools three years from now aren’t even on the BI roadmap yet. Today’s roadmaps are tomorrow’s recycled paper.
What is more relevant to those that read this blog is: where is the action now? Where are the pain points for customers, and what kinds of skills needs are created in the short term by this combined portfolio? Let’s take EPM as an example. EPM, or “Enterprise Performance Management,” represents a combined portfolio of SAP and Business Objects products.
The official combined EPM portfolio currently contains five products:
- Strategy - SAP Strategy Management (formally Pilot Software, an SAP acquisition)'
- Planning - SAP Business Planning and Consolidation (formerly OutlookSoft, an SAP acquisition)
- Consolidation - SAP Business Planning and Consolidation (formerly OutlookSoft)
- Financial Consolidation - Business Objects Financial Consolidation (formerly Cartesis)
- Profitability - Business Objects Profitability and Cost Management (formerly ALG Software)
This EPM summary is a bit of an oversimplification. Some combined functionality may exist side by side in BI and BO for some time, and of course those SAP customers invested in SEM products like BI-IP and BI-BPS may be concerned to see that those products are no longer listed. This is part of the challenge SAP and its “BobJ” division is facing: to provide customers with a compelling way forward without giving them the impression that their current investments are being phased into oblivion. In fact, BI-IP and BPS functionality is also incorporated into the new suite. But for now, the new EPM suite is not really a suite, per se, but a collection of stand-alone products. We can expect them to resemble more of an integrated suite soon, with “Financial Performance Management 2008” being the name I have heard used for the next incarnation of EPM.
So for EPM, we can expect SAP to do what it does best, which is to bundle related products into comprehensive suites. This approach makes sense. At the Business Objects Influencers’ Summit in Boston 2008, Doug Merritt, EVP and GM of Business User Sales, said that most ERP customers have between 5 and 15 different BI products running. There is clearly a need for standardization around BI tools, and that is where SAP excels. But for now, those SAP customers interested in a particular EPM product are not going to wait for the combined product offerings of the future. They are going to invest in the singular products they need now. In the case of EPM, the biggest pain point seems to center around OutlookSoft’s Business Planning and Consolidation functionality, so we’re seeing more action in the BPC product than elsewhere in the EPM suite.
When you consider that EPM is a small part of the combined BI/BO product line, we can expect SAP customers to look for guidance around the complexities of the roadmap, so those firms and consultants who understand the map well enough to provide wise and unbiased counsel can expect to be in demand. Other than that, what I think we will see in the short term is two separate product lines that operate a bit more in conjunction with one another.
One of the real strengths of BO is that its EIM (Enterprise Integration Management) integration hub was already best-in-class in terms of third party integration. Well before the BO acquisition took place, the BO team was already working hard to provide integration protocols for SAP in particular. However, at this point, we’re not talking about the seamless integration of the two products. The BO sales team is reporting that they are having success with SAP customers who want to replace other third party tools with BO. This would make sense: if you’re going to replace your third party reporting system anyway, why not purchase a set of tools that promise to be more closely integrated with SAP from here on out?
For now, however, the best way to describe the SAP customer base is: curious about BO, but seriously involved with NetWeaver BI. Much of the action in the BI market has to do with the upgrades from BW 3.5 to BI 7.0. It goes without saying that those firms and freelancers who are well-versed in 3.5 to 7.0 scenarios are the best positioned to take advantage of the current marketplace. What would make BI 7.0 compelling enough to upgrade even during the downturn? BI is a major new release that boasts tighter integration with NetWeaver, closer ties with NetWeaver Portals, and a better platform for developing real-time dashboards that give users the performance monitoring data they need on a day-in/day-out basis.
People can talk about cool new ad-hoc tools all they want, or even “mining the cloud,” but at Sapphire 2008, the customers I heard from were sold on dashboards and better user presentation of data. Of all the BO products, “Xcelsius 2008” is perhaps the BO product SAP customers mention most frequently in terms of their short-term, bottom-line needs. No surprise then, than BO bills this product as “The first and only dynamic and customizable data visualization software that enables users of different skill levels to create insightful and engaging dashboards from any data source with point-and-click ease.” Tomorrow may be about the cloud, today is about dashboards.
We can also expect to see short-term SAP customer interest in Crystal Reports, but primarily from SAP customers who are not finding their current SAP reporting options sufficient. Otherwise, we can expect to wait until 2010 for a big SAP-Crystal Reports push. At that time, a fully integrated “Crystal Light” for SAP is expected to be in full release mode.
One more big upgrade factor is BIA, the Business Intelligence Accelerator driven by in-memory database technology. Not all SAP customers are sold on BIA yet, but we’ve heard enough testimonials to know that BIA is another big incentive to upgrade. We also know that the BO team is salivating at the prospect of harnessing some of their state of the art ad-hoc reporting tools to BIA. We heard a lot about Polestar at Sapphire 2008, and again at TechEd 2008. Polestar is a true open-query tool that can process millions of lines of data and generate fast query responses. I was a little disappointed when I learned that this much-demoed product, which got attention during several keynotes, does not yet exist on the SAP side. But a “Polestar for BI” product, powered at hyperspeeds by BIA, should come out in the next calendar year, and we can expect to see some customer interest as soon as that is released.
So how can we reconcile these BI upgrade needs with the reality that few companies are in active upgrade mode right now? This can be answered in several ways. First, SAP has its own dashboard capabilities that can be utilized in a 3.5 BW system as well. I expect companies that have pulled back on a major ERP 6.0 upgrade to look into a better use of their 3.5 system, and dashboards will be high on their list. Next, some SAP customers already budgeted for their BI 7.0 upgrades and, as money “already spent,” those BI upgrades may well continue. Finally, a reasonable segment of customers are running on ERP 6.0 and NetWeaver BI 7.0, and those folks will be on the lookout for all kinds of reporting efficiencies. Anything that can aid in performance or reduce the need for costly customization will be on the table.
Speaking of those customers who are already on the other side of an ERP 6.0 upgrade, we are also seeing some action right now on the SAP Master Data Management (MDM) side. For those companies heavily invested in SAP, MDM provides some real potential to sharpen the customer focus by eliminating duplicate records and better identifying the most profitable customer segments. Eventually, some of BO’s MDM capabilities will be integrated into SAP, but for now, SAP MDM is certainly appealing for companies who are tired of reconciling master records across departments.
I’ve run out of space long before I ran out of information to share on BO, but I’ll be glad to return to this topic down the line. I hope I’ve provided a better sense of how the BI/BO future relates to the realities of the present.
(If you’re looking for even more info, the keynotes from the SAP BO Influencers Summit of August 2008 are available online. There is also a comprehensive SAP for Business Objects FAQ posted on the SAP Developer Network. Finally, if BW related skills is more your interest, I did a piece for my SAP BPX Skills blog on whether BI/BO will soon be a relevant skill area for all functional consultants. This piece generated some interesting reader commentary that hones in on some of the skills issues we are facing during the BI/BO product merger.)