Posted by [IP Address: 192.83.224.17] 'Barden' on September 19, 2001 at 02:33:10 EST:
In Reply to: Future of SAP posted by [IP Address: 192.83.224.17] 'Ramnath' on September 17, 2001 at 00:23:46 EST:
Hi All
I have some humble comments do not take it as I am adding fuel to fire looks like the American economy is in real distress. Not just the stock market most people truly said so far that the services sector was doing well - Airline industry on verge of going bankrupt , not sure of insurance industry also in deep trouble, telcos in huge problem all pointers to big problems in the so called services industry as well.
Look at today Bush is announcing a 15 billion bail out plan for airlines. US airlines are saying they are on the verge of becoming bankrupt despite huge jobs cuts or job cuts in pipelien.
Appears now all the Telcos in US - Nortel and CISCO, JDSU, Lucent are all in knee deep trouble despite huge
job cuts. Motorola is in doldrums huge mess nobody knows where they are going. After merger Compaq & HP collectively about more than 30% of their market cap as been wiped off.
3Com bought Palm and Palm inventories are piling up no buyers they are discounted 60-70% their marked prices still no volumes, insurance industry in doldrums, mfg sector already in recession.
As if this is not enough read this - Oracle the 2nd biggest application & infrastructure software vendor is saying yesterday the software slump is worsening look Oracle's indications give a indicator for the SAP market as well:
http://www.zdnet.com/zdnn/stories/news/0,4586,5097066,00.html
Today read this URL which is saying now all the ISP Telcos are going bankrupt and ISP service providers are disappearing
http://www.zdnet.com/zdnn/stories/news/0,4586,5097098,00.html?chkpt=zdnnp1tp02
Now the US telcos as well want a bail out (why not from Tax Payers money) the next step is all the Technology companies will as well ask Bush for a bailover - unbelievable appears all these companies having hugely mismanaged their operations and are expecting the government to rescue them now. Looks like all these companies had so many people the question is looks like most corporations are carrying huge fat on them (excess staff).
Read this another interesting article in Business Week which shows the pulse of the IT departments worldover who are frustrated with useless IT gizmos that were sold to them:
http://www.businessweek.com/magazine/content/01_35/b3746662.htm
I think it is time for all of us now to start acting more responsibly - ensure our client/customer gets a optimum return on what they are investing in the technology. If all of us collectively do not work to that goal the only thing I have to say is the technology industry is doomed sooner than later we must not expect customers/clients to be paying for useless things. Remember one thing you can cheat all people sometime and some people all the time not all the people all the time. I think now IT in general must start showing results.
Just my thoughts.
Barden
: I just found a interesting article on state of SAP on the Fortune site at http://www.forbes.com/global/2001/0723/025_print.html
: A fresh image for SAP won't restore the German software designer to its former glory.
: A few years ago, it seemed that nothing could stop SAP, the German software developer. Net income skyrocketed from $88 million to $555 million between 1993 and 1997, mostly from U.S. sales of its back-office software. The first company to introduce applications that would do everything from managing payroll to tracking inventory, SAP became the top software provider for nine of America's ten largest companies. "No one could touch us," says Hasso Plattner, its cofounder and co-CEO.
: Not so any more. SAP, based in Walldorf, has stagnated in the very market it created. Sales in the U.S., which contribute 30% of the company's $6 billion revenues, have slowed from an average 40% annual growth in 1996-98 to an average 9% annual growth between 1998 and 2000. That's still good for a 452 ranking on the FORBES GLOBAL 500, but the stock's price, $70 in the fall, now hovers at $35.
: How did it happen? For one thing, a maturing market left SAP struggling to develop innovative software. Then SAP missed the opportunity to develop such front-office products as customer-relationship-management software. A botched internet strategy didn't help: In May 1999 SAP introduced mySAP.com, which started as a vague enterprise-portal strategy that evolved to link back-office operations with front-office capabilities. But it was too little, too late.
: SAP started to repair the damage last year. Plattner, a former IBM engineer who left that company in 1972 to establish what became SAP, and Henning Kagermann, his co-CEO, increased expenditures on marketing to 24% of sales, from 22%. And they moved the global marketing headquarters from Walldorf to Manhattan. They also hired a new global marketing boss, Martin Homlish, who, as marketing director at Sony, promoted the hugely popular PlayStation. Homlish has already enlivened SAP's image. A new campaign touts: "The best-run businesses run SAP." Last month Homlish hired Aerosmith to perform at Sapphire, SAP's marketing and promotional conference.
: But SAP is going to need more than slogans and rock stars to impress the chief technology officers of the world. The better part of marketing is anticipating a customer's needs, a weak point for SAP. As demands for supply-chain management (SCM, or software that can track orders, assess raw material availability and set delivery dates) became more complicated, for example, such niche players as Manugistics of the U.S. moved in.
: Not long ago it was expensive and time-consuming to integrate multiple software programs into one system. An SAP customer remained one for years, in every area of back-office software. These days a client can easily pick and choose from the best providers in each category. Emerson, a U.S. electric giant, for instance, runs ten separate products from such niche providers as i2, Manugistics and J.D. Edwards.
: To adapt, SAP is now making concessions it would once have balked at: if a customer is using Oracle's customer-relationship-management program but wants to use SAP's portals, for example, that's okay.
: SAP has also started to reach for other outlets. In April it announced a joint venture with Yahoo to develop an SAP workplace portal. "We're not talking about visionary leadership here," says Joshua Greenbaum, an analyst at Enterprise Applications Consulting in the San Francisco area. Earlier this year it acquired TopTier Software and entered into an agreement with CommerceOne, both attempts to gain a foothold in e-business software. What could differentiate SAP from its competition, Greenbaum says, is its marketing strategy. Five years ago SAP was the leading name in back office software. But today Oracle, SAP's biggest full-service rival, has superior marketing.
: Plattner and Kagermann admit their mistakes. "We didn't develop our internet strategy as promptly as we should have," says Kagermann. And Plattner concedes that SAP should have been faster to go to the front-office side of software development: "Okay, forgive us," he says. "We are a little late." It might not be that easy.