SAP and Startups… Really?
Yes, It’s true. And SAP bests high on HANA.
And the word “startups” bring the other kind of image to our head:
(Hint: killer mustache. The picture was found on Flickr.)
Therefore, yes, it takes a bit of imagination to connect the two, but in fact, SAP is now a startup incubator and accelerator. It’s nothing new, either: more than 150 startups have joined the program, and the first 20 graduated. The Startup Forum held on January 24, 2013in Palo Alto wasn’t the first one; the first was held on March 7, 2012.
Why Do Startups Participate
The official statements from the startups that have been through the program sound similar: they want to take advantage of SAP’s cutting edge real-time database technology, along with the intensive and hands-on technical training and guidance from SAP. This could also be a major take off point, since startups gain access to the existing massive SAP customer base.
The short answer? It makes financial sense.
Adopting SAP HANA and devoting resources to building application means development cost. A lot of it. However, if selected by SAP to participate in the program, these startups receives free HANA license and can tap into the $155 million venture fund started by SAP. Startups are often times cash-strapped so this move makes perfect sense.
SAP has acquired a series companies in the past few years, including Ariba, BusinessObjects, SuccessFactors, Sybase, and Syclo . If the right fit comes along, SAP is always looking to invest.
What Does SAP Want
Kaustav Mitra, Head of the Startup Focus Program, jokingly mentioned that idea of Startup Program came from a question: why was no one at SAP invited to the parties like the ones we saw on TV, especially in Bravo’s “Silicon Valley”?
The truth is, SAP is getting serious about building a platform and ecosystem, betting it all on HANA. As Vishal mentioned on last Thursday during his speech, SAP wants to work with the startups to figure out the right revenue-sharing model so all can thrive from the opportunities. For this kind of initiative, SAP wants to work with companies and developers experienced in building applications for enterprises. VCs’ investment trend also moves towards to more and more enterprise or B2B startups. Most startups that came to Palo Alto on January 24 to present their solutions and pitches fall in this category.
SAP also sees this as an opportunity for innovation. In this case, besides the enterprise startups, SAP needs to also work with the “edgy and cool” startups, and they don’t come from traditional means that SAP may be familiar and comfortable with.
I personally would love to see SAP working more with startups such as Crowdmob. It is new, young, and not just another dashboard product.
Some Things Maybe We Can Consider
SAP may be able to learn a few things from other companies that excel in building developer relations and platforms, such as Twilio, Mashery, Google, to really have a successful play in the developer/startup community. I have not seen SAP’s direct competitors done so, but I suggest we look into (regularly) sponsoring Meetup groups, hackathons or even hosting hackathons on campus. The idea is to be where developers and startups are, instead of expecting solely on having them come to us.
We are a giant – but we need to start thinking like a startup in order to achieve the traction and awareness among developer community.
It is always a challenge to jump into a new venture, especially when this new venture comes from a very different culture and mindset. I believe SAP is on the right track by kicking off the Startup Focus Program, and there are a lot of exciting work to be done.
What are your thoughts on SAP’s effort on building the HANA platform?