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I recently reread Why Dick Hirsch is mostly wrong about ByDesign guerilla tactics  to Guerrilla Tactics for SAP’s OnDemand ‘Go to Market’ Strategy  and realized that something was disturbing me.  Although I disagreed with Dennis’ assessment on the necessity of having a separate BusinessByDesign (ByD) community, I was more disconcerted by the broader implications about his suggestion.  In the meantime, the discussion regarding a separate community has been concluded (see below) but I kept returning to Dennis’ analysis of ByD as it related to the BusinessSuite. 

For me the most interesting aspect of the controversy surrounding this decision was what it told us about how SAP views its OnDemand strategy. Is this strategy distinct from its OnPremise strategy or is there some a cohesive plan that encompasses both platforms,  takes into account each area’s unique characteristics but also the potential that emerges when the two are combined? Is it OnDemand and OnPremise or OnDemand vs OnPremise.   

This blog provides evidence in three areas that demonstrates that touchpoints between the two strategies and their related technologies do indeed exist and that the synergies are actually much deeper than many assume.  

Community: The new OnDemand Community  

SAP recently announced the creation of the SAP Business ByDesign and decided to embed this new community into the existing SCN community. The new OnDemand community is embedded in the Business Process Community as a Solution.  

 

I thought that this was an intriguing location to put the new community but Greg Chase who is involved in ByD marketing What Do You Demand in Your On Demand Community? the reasoning behind this placement so:

In fact, I see two distinct “lobes” of this community – one that is more business operations focused, and would certainly involve anyone who cares about best practices for a business process, or end-to-end corporate visibility.  There’s still a strong, but far less labor-intensive technical component as architectural questions, enterprise information considerations, and support for custom needs still remain.  However all of this is one community because cloud-based / on demand computing is much closer to the stated goal of SAP’s BPX Community – to bridge the gap between business and IT.

Although OnDemand LoB applications – such as SalesOnDemand -have a pronounced “social” rather than “process” focus – as evidenced by John Wookey’s comments in his interview with Dennis Howlett, they are still anchored in the desire to achieve a business objective – thus, the inclusion in the BPX community is valid.  However, I’m interested in seeing the impact of the new design thinking as evidenced in these new apps on traditional OnPremise business processes.  This new way of thinking could rejuvenate existing processes if applied selectively.  The decision which process are appropriate for this “social make-over” is still open – obviously not all traditional processes should receive the social Botox shot.

The decision to place this new community into the existing SAP community allows SAP to exploit the potential of a combined body of experience, domain expertise that emerge when these two communities are brought together.  Still it is important to remember that there are indeed distinctions between the two communities that will probably lead to heated discussions.  It is exactly these different characters that will help evolve both communities. I for one will be looking forward to the acrimonious debates comparing processes in OnDemand vs. OnPremise environments. 

Marketing:  The use of traditional / OnPremise Marketing Channels for OnDemand Edge Offerings

SAP’s OnDemand Strategy is based on Core (primarily BusinessByDesign and LoB OnDemand apps) and Edge (StreamWork, BIOnDemand and River) applications. Although most of the recent focus has been on the OnDemand Core applications, I’ve noticed that marketing for the Edge offerings has increased dramatically in the last few months. Furthermore, these efforts are starting to use traditional marketing channels that are normally used for OnPremise offerings. The tone has also changed – it also gotten more aggressive I’m receiving various marketing emails from SAP extolling the advantages of StreamWork and BIOnDemand and suggesting that users move from the free usage models to paid subscriptions.

Of greater importance was the announcement via tweet of a PartnerEdge webinar where partners could learn about the StreamWork Roadmap.

The SAP Road Map for StreamWork provides an overview of the SAP solution today, gives comprehensive insight into the planned innovations in the upcoming releases, and shows SAP’s perspective on future innovation spaces inspired by our customers’ business strategies and technology trends. Participate in this session to verify that your SAP initiatives are well aligned with the planned innovations.

This is the first time that I’ve seen a StreamWork-related webinar focusing on partners or developers.  A recent blog from Rüdiger Müller also announced that StreamWork is increasing its developer outreach program – there is even a new StreamWork category for blogs on SCN.  This marketing is focused on all partners not just those involved in the OnDemand market.

POV:  Partners – regardless of whether from OnPremise or OnDemand focus- are going to play a critical role in the success of these OnDemand platforms.  Although the recent marketing efforts for OnDemand Core applications are well-known (I’ve seen numerous tweets announcing new ByD partners), the style of marketing for the OnDemand Edge platforms is a new phenomenon.

The SAP-internal POCs looking at various integration scenarios with these OnDemand Edge tools have successfully demonstrated the potential of these platforms.  The next phase of bringing this innovation to a wider audience has now started and partners – many with experience in traditional OnPremise offerings – are now being asked to examine the opportunities offered in the OnDemand world.

Technology: Don’t cross the streams: Touchpoints between SAP’s OnPremise and OnDemand Technologies

Pundits often clearly distinguish between SAP’s OnPremise and OnDemand technologies – one is often viewed as more innovative than the other.  At various events, SAP managers have asserted that this distinction doesn’t exist – we’ve been told that NetWeaver is the foundation of all these new platforms.  Although integrations between the two worlds (usually via REST APIs or Enterprise Services)  are nothing new (for example, this demo about how ERP data can be used in Sales OnDemand, increasing you see technology that was traditionally viewed as being OnPremise as now being used in OnDemand environments.

I wanted to do some research to see if I could find any concrete evidence that these synergies exist. Since I currently only have better access to OnDemand Edge applications (StreamWork, BIOnDemand, River), I decided to start there.

The mystery of LJS

I recalled that at the Analyst Summit in December there was an announcement that StreamWork had just moved to NetWeaver. I was curious to see if this change had actually taken place. I started out by exploring some of the HTTP Headers on all three Edge platforms without actually having access to the landscapes in question, I still wanted to look under the covers.

What I was discovered was that all three platforms are running on SAP’s Lean Java Server – this can be seen by the HTTP Header Server: SAP LJS 1.0.0

 

Why is this interesting? First of all, I assume that the LJS will be/already is part of the future NetWeaver product line – thus showing that the technology that is often considered to be purely OnPremise is moving into the OnDemand arena. Second, the fact that all three platforms run on the same application server would make the transition to a single Edge platform easier – not to say that the transition would be a snap – there are still a wealth of hurdles to be overcome. 

Workspaces on Demand

 Enterprise Workplaces (EWS) are part of the NetWeaver Portal platform. 

 

Recently, dashboards have been added to the BIOnDemand platform   

 

These dashboards are based on an OnDemand variant of EWS – there used to be a page with Release Notes that directly made this association but has unfortunately been replaced by a SDN wiki page.  Although the UI has changed / been simplified for the OnDemand platform, there are still similarities (terminology, etc.) that reveal the origins of these new UI elements. 

Note: I assume that you will be soon seeing more of these Workspaces in other OnDemand settings.  They are actually independent of BIOnDemand and are located at a separate URL:  https://wsod.ondemand.com/session/new

 

 A YouTube video also hints at the future direction of this technology:

 

The strange case of NetWeaver Live

NetWeaver Live – formerly uPods – in itself represents the synergy between the OnPremise and OnDemand worlds.  The description of this new offering focuses on exactly this hybrid character. 

SAP is planning on delivering a new solution enabling customers to apply a new layer of user interface and user productivity services on top of existing applications, by combining an on-demand and on-premise model in a zero total cost of ownership, secure paradigm. [SOURCE]

 Its architecture includes parts of each environment.

 

SOURCE: Session CD101 / TechEd 2010

Remember – this is NetWeaver.  The associated product team is also aggressively promoting POC integrations with other OnDemand platforms (River, StreamWork, etc) illustrating that the fixed boundaries between OnDemand and OnPremise offerings are blurring.  

POV: SAP just doesn’t re-use its OnPremise technology 1:1 in the OnDemand space but adapts it to the unique characteristics of the OnDemand world. The UI changes in the WSOD as well as the lightweight footprint of the LJS both demonstrate that SAP has learned its lesson – based on its early attempts with ByD – that the optimization / adjustment of OnPremise software for the OnDemand world is necessary.  WSOD shows that NetWeaver technology is hiding under the covers of some OnDemand offerings. NetWeaver Live, however, demonstrates that the NetWeaver product line itself now has its toes in both pools and has no intention of hiding the fact that it can swim well in both.

Conclusion

For me, the emerging synergies between SAP’s OnDemand and OnPremise strategies is closely associated with how SAP as a company deals with innovation.   Do you isolate innovation or try and integrate it into the existing product lines.  Regardless of their origin– SAP appears to view these new ideas as an opportunity rather than a threat to existing product lines.

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5 Comments

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  1. Greg Chase
    Hi Dick,
    What an excellent blog and a great round up across the On Demand offerings. 

    You are right on in saying its not about On Demand vs. On Premise.  Its really an AND strategy.  If you are already invested in On Premise, SAP is rolling out, especially this year, a lot of AND On Demand options that add onto On Premise. 

    Probobly the best example of this is SAP Business ByDesign for subsidiaries.  There you are running the small subsidiary on the cloud and integrating it back to the mother ships on premise SAP Business Suite.  There are specific integration scenarios developed for this starting with financial consolidation.  More will be unveildd at Sapphire.

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    1. Richard Hirsch Post author
      Hi Greg,

      I think the most difficult task for SAP will be selecting the correct use cases for such hybrid environments. Currently, there are no best practices  in this area but over the next few years I expect SAP, partners and the ecosystem as whole to collaborate to set such guidelines. This will provide the most benefit for customers.

      D.

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      1. Dennis Howlett
        @dick when you say: “I think the most difficult task for SAP will be selecting the correct use cases for such hybrid environments.” I believe this is an aspect that les at the crux of how SAP can best approach fulfilling customer demand.

        When I observe the broader OD world, the impetus for innovation might have started with the need to scratch an itch by the core development team, but ongoing requirements are invariably driven by customer demand.

        I think it is instructive to go back to something SAP has said many times: ‘We will develop 10% of requirements while partners flesh out the white spaces.’ OK – but which 10%?

        Given SAP’s ability to reach large swathes of potential customers, I suspect that will actually get easier. Verticals go to the partners, broad needs come back to the core. 

        And if SAP plays this card correctly, the community will decide and SAP will see that. This thread is a (rough) example of what I mean from the SME market: http://www.accountingweb.co.uk/topic/technology/kashflow-responds-bank-rec-call/496488

        But this example contains an implicit warning. If your own channels don’t take action, others will rattle the cage for you.

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  2. Mark Yolton
    Dick:

    This is extraordinarily thoughtful and insightful; something we’ve come to take for granted when you’re the author.  Thank you.  I can report that the SCN team thought and debated long and hard about how and where to place “On Demand” and ByDesign to best reflect proper  positioning of the product/solution set, strategy, and so on (it wasn’t accidental but intentional).  It’s also noteworthy that OnD and ByD are here in SCN… since SCN was long ago conceived as a “network of communities” anchored around SAP, each one serving different but adjacent audiences and interests, where each inter-related and infuses the other with momentum, insight, solutions, tools, and so on.  Thank you for sharing your opinions and insights here. 

    Regards,
    Mark Yolton

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  3. Dennis Howlett
    @dick – if you are immersed into the SAP world then your argument is natural. You are going to make those kinds of connection because you expect to see them in some shape or fashion. So what you are ultimately discovering is the obvious from SAP’s point of view. 

    The fundamental problem I have is that the typical ByDesign customer is not of that world. That was a big part of the problems I saw in comments to my earlier post on this topic.

    SAP Marketing wrestles with this all the time – I’ve been on the calls – where my best advice is: “Stop worrying about the engineering and worry about customers.”

    As I’m sure you know, I was shocked when John Wookey decided to part company. I don’t need to rehash that here but the fact there was no succession plan in place hints at problems SAP will need to overcome but which it has yet to manage well.

    It seems to me that when I take what you are saying and parse that against events, then what I am really seeing (especially in the LOB side of things) is a concerted effort to ensure that the muddling continues as part of a strategy to protect the on-premise revenue stream rather than go ‘balls out’ for innovation via the cloud. I don’t make these statements lightly and have good reason for believing that opinion is well founded. Again, I don’t need to go into that here but it will be a continuing topic of interest as I try parsing SAP’s strategy across those dimensions.

    Why should this matter? While there is nothing wrong with what you are saying when viewed through the technical lens it is a representation of the kind of complexity SAP is striving to hide from users (as it absolutely should) but which ends up getting exposed through this drift back to the love of code.

    I can guarantee that is a 100% turn off for most of SAP’s target customers in the SME space. And it doesn’t make any sense when expressed in terms of how deal flow will be generated.

    Can you imagine having this kind of discussion with a customer who is upgrading from a Sage/QuickBooks or transitioning from Salesforce.com? It doesn’t compute. (sic)

    Now – can I see an argument for creating a community that deals with the technical issues that will inevitably arise in LOB and BYD deployments? Absolutely ! That would have to arise and I will be hanging out to observe progress as I try map solutions to business need I observe in the market. But it has to be separate and clearly identifiable for the BYD and OD business users that SAP wishes to reach. Otherwise those potential users will find little reason or value *to them* in tipping up at SCN.

    If that happens then I’d have to ask the supplementary question: whatever happened to the ‘service’ in SaaS?

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