Culture

SAP's new success strategy: Hire more 'C' students

Henning Kagermann is downplaying the challenge of Web-centric computing, arguing that business is too hidebound to recognize it has computing alternatives. I'm not buying that argument.

If this is Henning Kagermann's strategy, SAP faces a desperate future.

In an interview with The Wall Street Journal, SAP's boss downplayed the potential challenge posed by Web-based computing, arguing that businesses are conservative organizations. At the risk of putting words in his mouth, Kagermann's argument is that SAP's success depends on the business world being too hidebound to figure out that there are viable alternatives. In doing so, he draws the invidious comparison with younger software companies that don't operate on the same scale as an SAP. From the WSJ:

SAP

But the most important features for the managers who buy business software are still a system's security and reliability, and whether the system helps a business comply with an ever-growing number of government regulations, says Mr. Kagermann.

Systems bought by individuals or departments don't have the company-wide perspective necessary to meet these goals.

That's not to say there isn't a role for software from companies other than the SAPs and Oracles of the world. But Mr. Kagermann says that these systems will complement, not replace, traditional business software.

I'm not buying it.

As with any generalization, there's at least a small amount of truth. There were fits and starts during the transition from mainframes to minicomputers to client-server to Web-based computing. But Kagermann's self-serving exaggeration doesn't hold up to closer scrutiny.

Are corporate IT managers so stuck in the past they can't figure out they have a computing alternative? That doesn't jibe with the experience of the last three decades of computing history.

Benioff: Who's laughing now? Dan Farber/CNET News.com

The way it usually works is that yesterday's "upstart" becomes tomorrow's "traditional" supplier. I understand why SAP wants to foster the belief that Web-centric computing has limited application in the business world. But the desperate argument that "serious stuff" is the purview of the old software guard just doesn't square with the facts. Kagermann's too experienced an executive not to understand what folks like Marc Benioff are trying to do.

While Salesforce has a lot of ground to cover before ever getting close to challenging Microsoft as the world's top application platform provider, I don't see anyone ridiculing Benioff anymore as a marketing meshuggana. (In the early part of the decade, Benioff was famous for taking his "end of software" shtick a bit too far.) No matter. He's since had the satisfaction of seeing his gamble pay off with the embrace of Web-centric computing. (For more, check out my colleague Dan Farber's recent post.)

Consider the following:

• Salesforce now claims more than 80,000 developers and 69,000 custom apps built.

• Momentum builds on itself and developers don't waste time on hard-luck cases. By locking arms ever more closely with Google, Salesforce only reinforces the impression of a winner.

Though it doesn't necessarily mean SAP is going to wind up suffering the fate of digital equipment and the other computing dinosaurs, this is the way new ecosystems get built. That old warning from Santayana about forgetting history is worth recalling here. The only hope for Kagermann's thesis is if corporations purposely hire more "C" students. And that's not going to happen.