Today I got an email from a friend regarding an interview with VC Superman Don Valentine where he says things like: SAP is the noisiest non-participant in the business What? But then I read Jeff Nolan's excellent fisking of the interview and the world is in order again.
For the ones that don't read Weblogs that frequently:
Fisking [blogosphere; very common] A point-by-point refutation of a blog entry or (especially) news story. A really stylish fisking is witty, logical, sarcastic and ruthlessly factual; flaming or handwaving is considered poor form. Named after Robert Fisk, a British journalist who was a frequent (and deserving) early target of such treatment. [also Wikipedia entry].
Here is what Jeff has to say:
It's actually a compliment that after 30 years in business, the company is functioning prosperously and aggressively without the day-to-day involvement of the founders. A public company like SAP should never be about one person.
The comments about SAP really get under my skin because they don't reflect anything other than a headline level understanding of the company, and are no doubt fueled by the difficulties and failures that his own investments have had in trying to compete against SAP (e.g. Oracle).
I would like to add, that it often astounds me the level of ignorance people in the valley have regarding SAP. "I always thought SAP does financials, the boring backend stuff". Well, all the billboards you see at airports with North Face, Porsche, Nike, Nestle, ... running SAP, they actually do run our software. Running as in production, purchasing, sales, human resources, financials, controlling and all of that integrated. An estimated 50% of the worlds GDP is running through SAP software. So much to noisiest non-participant in the business. Just goes to show that VCs are human too.
This is the perfect opportunity to work on my blogging backlog. Shai Agassi did one of the keynotes at AC2004 [slides] he repeated some of his SAP TechEd observations. Evelyn Rodriguez did a great job blogging Shai's speech while it was happening and we hope to soon have the video available too.
The focus for the rest of this post shall be on this new slide that has not been shown at any of the SAP TechEds. Shai took a page from Wired magazine to illustrate the long term trends in the software industry:
- Once the service platform is available you will not be interested anymore what the underlying database is
- Away from churning through transactions toward events
- With devices it is meant that more and more Tags like RFID or sensors will give be the initiators of events
- Instead of MRP runs or transactions, more and more the focus will go to the exceptions to the automated processes
- The battery life is still a problem, but the desktop will because less and less important
- In the future more and more applications will be created via modeling without the need of additional coding. SAP is working on a mario.herger/blog/2004/10/06/instant-business-applications to enable just that. That modeling can only be done close to the business, therefore off-shoring will not be possible for that kind of job.
- When you have well defined standard interfaces for your enterprise services the language you use is not that important and will be domain specific.
- This is something we are seeing already, that SAP customers farm out their peak load out to the grid and save a lot of money by not having to have their server farm build out to the max. That trend will continue.
- On the desktop Office is king
People in the audience really loved that comparison, Alex Lightman sitting next to me said the slide should be a book and every line one chapter and he even offered to co-write it. John Mauldin of Bull's Eye Investing fame, who's investment newsletter is read by over 1.5 million subscribers tabs me on the shoulder and says: "Can I have an eight page summary of that speech? I would like to send that out to my readers, this is really important and they never hear things like that." I checked with our investor relations and was told that unfortunately we cannot do that because of stock market regulations. They are missing out.
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