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SAPPHIRE 07

April 25, 2007

Event: SAPPHIRE ’07

When: April 23-25, 2007

Where: Georgia World Congress Center, Atlanta

What: Software giant SAP’s customer conference, held for the first time in Atlanta, brings together SAP customers, partners and the occasional competitor. Given SAP’s rivalry with Oracle and smaller niche vendors in human resources software, as well as questions about SAP’s product strategy, the event promised to be of interest to HR and HR technology executives.

Conference info: For information, go to http://www2.sapsapphire.com/usa2007/index.epx.

Day 2—Tuesday, April 24, 2007

Keynoting collaboration: SAP chief executive Henning Kagermann continued the conference theme of connection during a provocative, if prolonged, keynote speech here Tuesday.

In keeping with the software giant’s proclaimed eagerness to work with partners and customers, which was Monday’s mantra, Kagermann said companies should look beyond their traditional boundaries for success in today’s ever-faster business climate. Organizations can both speed up innovation and increase productivity by optimizing their network of employees, suppliers, customers, partners and distributors, Kagermann argued in a presentation lasting longer than an hour. Kagermann called the concept "business network transformation."

"It’s about reaching out outside the company," he said. "And it’s about agility."

Kagermann cited as an example a chocolate maker that found customers are more interested in buying a great chocolate gift than buying great chocolate. "All of a sudden these guys are in a different business," Kagermann said. The firm, he said, turned to a partner to help it make the right shift in its products.

Part of SAP’s pitch to companies is that it can help them set up technology systems that are flexible and make it easier to do such things as outsource tasks and jointly create new products. SAP also is working to help companies spur more teamwork among employees. Kagermann’s presentation featured a demonstration of a software tool he referred to as a "Thought Pad" that functions as a wiki—a Web site where people can outline and discuss a business problem. It has not yet become a product SAP sells. (It would be no surprise if the product changes names if and when it is released, given that Lenovo, which acquired IBM’s personal computing division, makes and sells ThinkPad notebook computers.)

In talking about what SAP offers midsize firms, Kagermann portrayed the company’s software as ultra-powerful. And he criticized competitors, making an unmistakable dig at Oracle and its recent strategy to snap up other software firms: "We will continue to co-invent the future. Our competitors are consolidating the past."

But overall, Kagermann projected an air of humility. At one point, he acknowledged past mistakes, such as expecting customers to make too many software upgrades. And he ended his speech with this plea to customers: "Please talk to us. Give us feedback."

Given that the software industry is often filled with arrogance and egotism, the speech was a remarkable departure.

But could it be just so much marketing speak? At least a couple sources at the conference said SAP’s collaboration push appears genuine. "They certainly have identified the need to be more cooperative," said Christa Degnan Manning, an analyst at AMR Research who studies human resources-related software.

Nasim Mansurov is a new SAP customer, but already he is impressed by the software giant’s commitment to listening to clients. Mansurov is director of information technology at Stonebridge Cos., a hotel management company in Englewood, Colorado. Stonebridge signed a contract with SAP in December and plans to begin using SAP’s human capital management software and other modules later this year.

Mansurov said SAP has interviewed him to get a sense of how to make its software work better for hotel management companies. In Mansurov’s view, SAP has given Stonebridge a lot of attention, despite the fact that it has only about 1,500 employees. SAP is "all about" relationships, Mansurov said.

German flavor: At times, SAPPHIRE ’07 had a distinctly German feel. This stems partly from all the German accents heard during presentations by SAP officials, many of whom are based at the company’s headquarters in Waldorf, Germany. It also arose during a presentation on SAP’s human capital management software. During a demonstration of how SAP can allow employees to make vacation requests through an automated voice system, the sample employee who called in had a total of 19 vacation days left. In America, where 10 days of vacation are typical, it was a sharp reminder of Germany’s more generous time-off packages. Afterward, though, an SAP official said the company gives its U.S. employees 20 days of vacation.

Linked up: Could all the messages of cooperation have infected SAPPHIRE-goers’ partying? Creative teamwork was on display during the Tuesday-night concert by John Mayer, sponsored by SAP and the Americas’ SAP Users’ Group, an independent organization of SAP customers and third-party vendors. At the concert, held at the arena that’s home to the NBA’s Atlanta Hawks, many audience members sported glow-in-the dark necklaces. Near the end of the show, people began pulling them apart and linking them together in long chains that ran throughout the arena.

—Ed Frauenheim


Day 1—Monday, April 23, 2007

Conference theme—Let’s work together: SAP may be a dominant force in the world of business software—including HR software—but it’s portraying itself as the quintessential team player at this conference.

The Germany-based company highlighted its cooperation with both other technology vendors and customers during the first day of SAPPHIRE ’07, a major customer conference that has attracted about 15,000 attendees.

"We are really co-innovators," SAP’s Zia Yusuf said during a panel session with SAP technology company partners. "This is a lot of deep technical interaction that will lead to new products."

Yusuf, executive vice president for SAP’s global ecosystem and partner group, was sitting next to leaders from software companies Adobe and Microsoft, computer maker Hewlett-Packard and networking equipment seller Cisco Systems.

Among SAP’s announcements Monday was a deal with software maker Adobe in which SAP will combine Web conferencing technology from Adobe with its SAP Learning Solution software. SAP also disclosed a "trifecta" of sorts related to Duet, the software it makes with Microsoft that lets employees access SAP data through Microsoft Office applications.

The companies said HP is making an "appliance" for Duet. The appliance is an HP computer server pre-installed with the software, designed to shorten implementation time.

The news and the show come against the background of rising interest in software to help manage employees. In a report last year, market research firm AMR Research said human capital management is one of the fastest-growing areas of business software, with revenue rising 10 percent annually through 2010 to $8.7 billion.

SAP is one of the top sellers of HR software worldwide, but it faces stiff competition from archrival Oracle, which recently sued SAP for allegedly stealing Oracle tech support materials. A host of smaller software companies, particularly in strategic "talent management" areas such as recruiting and performance management, also are vying for companies’ HR tech dollars.

SAP entered the show amid some struggles. It reported lower-than-expected earnings for the quarter ended March 31. In late March, SAP announced the departure of one of its key executives, Shai Agassi, president of SAP’s product and technology group.

Pat Walravens, equity analyst with investment firm JMP Securities, recently wrote in a note that the SAP product strategy is in "disarray."

Even so, a number of big customers have been willing to tout their use of SAP applications at the show.

The Coca-Cola Co., for example, invited journalists to its Atlanta headquarters to discuss its relationship with SAP. The beverage giant taps SAP software for HR and other tasks.

Brian Pugh, a director in Coke’s information technology operations, said the company uses Peopleclick software for recruiting purposes, but won’t stay with that specialist vendor.

"We’re definitely going to [SAP’s] E-recruiting," Pugh said.

Biggest gaffe of the day: SAP spokesman Bill Wohl caused a hiccup at Coke by referring to a new company soft drink as Coke One. Actually, the zero-calorie drink is called Coke Zero. Of course, there’s a rival drink in the market dubbed Pepsi One.

"I almost threw my BlackBerry at him when he said that," Pugh said.

—Ed Frauenheim