Luis Murguia, Head of EMEA Ecosystem & Channels, describes his job as ensuring that the SAP promise to make the world run better is delivered by Partners, reaching the entire world. I spoke with Murguia about the dynamic market changes that will be the focus of the SAP Database & Technology Partner Summit, October 29-30 in Barcelona.
How will the summit deliver on this mission to make the world run better?
Murguia: I think that few times in our lives we’ve seen the kind of convergence and changes in technology like we see now, changes that impact everyone’s lives. This, the combination of Cloud, Mobile and Big Data, is enormous.
We [at SAP] have a strong Partner community and our Partners have been very successful in the past 10 years. For them to sustain the growth, they need to embrace these three trends with the same intensity as we have in the past. This event in Barcelona is everything about Big Data.
The way people interact is going to change due to the impact of Big Data. People who studied marketing in the past learned about market segmentation – demographics, ways to break people into smaller groups. Dealing with Big Data now allows companies to segment all the way down to one, so that they can target an individual, they can address a concrete person. This is game changing.
In France, there is a supermarket retailer that is doing promotions targeting individuals. They send special offers specific to an individual rather than blanketing a group and hoping for a result. This means a much stronger focus on people, on individual consumers, with the end result of higher revenues, stronger margins and a very cool customer experience.
In Tokyo, it’s easier to find a taxi than two years ago because taxis use predictive analytics and can go to where they expect to find customers. These are massive changes that are having a significant impact in peoples’ lives.
For Partners, they have the tremendous opportunity to grow as they have over the past 10 years, beyond Business Applications and Line of Business applications. For them, Big Data will be the easiest to extend and take their business to a whole new level.
I saw a TED Talk video where the speaker, Eli Pariser, discussed the algorithm filters being applied in technology such as search limiting peoples’ views or choices, since they second guess them.
Murguia: I think there’s a lot of effort with algorithms around big data – like predictive analytics. At SAP we’re expanding and investing a lot in the area. We just acquired a company – KXEN – a leader in predictive analytics. They offer the capability to target customers, in order produce a customized response, while ensuring that no opportunity is missed.. In the end, customers and consumers will have a much better experience by getting the proposals they need from vendors, while reducing the traditional mass marketing inundation of messages and offers.
The valuable insights companies and individuals get from the use of Big Data technologies and solutions, will be consumed through the Cloud and accessed on mobile devices – there’s convergence on the three areas. The example I gave earlier with the French supermarket retailer – the offers are easily consumed on mobile devices, and delivered through the Cloud.. Those Partners who are savvy and embrace these trends will be leading in the Partner community. It’s ripe for innovations.
Accenture has developed an application using SAP HANA for utilities companies. These companies have always repaired the electrical transformers in their network after they’ve failed which produces unexpected electrical blackouts for their customers. The application Accenture monitors different network parameters to predict the transformers most likely to fail. The utilities companies no longer have to wait for a problem to occur. Now they can replace a faulty transformer before it actually fails. This is predictive maintenance at its best, and customer satisfaction to the max.
What do you see as the market opportunity for partners with SAP Real-Time Data Platform (RTDP)?
Murguia: This is huge for Partners. First there’s the added competitiveness, with new business opportunities. With the conversations they can have about real-time with their customers, they’ll be two steps ahead of those who deal with historical reports. Real-time is about making the impossible possible. Manufacturers do their production materials and their production planning, using a process called MRP. In most cases, they run their planning once a week or month, and it can take a day to create that production and materials plan. With in-memory computing, they can run it in perhaps a few minutes. This means that the Real Time Enterprise can run the MRP several times a day, being much more responsive to changes in customer demand and to unexpected operational challenges.
With in-memory computing companies can run processes up to 1000 times faster. This can be hard to understand, so think of it like this. Flying from New York City to Los Angeles takes 6 hours. If you did it 1000 times faster, it takes 20 seconds. That opens new opportunities – you can go across the country, for a meeting, head home for lunch, and go back to the office.
The beauty for Partners is they can continue doing things they’ve been successful with, and create new revenue stream opportunities. At SAP we have a word – co-innovation – to describe our innovation with Partners. Through co-innovation we can really change the world. Portugal Telecom is a great example as an innovative integrator. Very early on, they took SAP HANA and made it available in the Cloud for customers of all sizes. In terms of leading the trends, they’re a great example.
What is SAP doing to help partners gain the skills to do these things?
Murguia: Customers more are more are focusing in their core competences, and outsourcing their IT infrastructure.. In fact, we see the fastest license growing at SAP is Managed Cloud as a Service (MCAS). It’s a really strong trend, moving the management of the customer IT operations into a Partner Private Cloud. In order to do so, Partner readiness must be higher than ever. This is why SAP spends a significant amount of euros with initiatives to train and to certify our Partners. For example, recently, we did a roadshow in EMEA, with hands-on SAP Suite on HANA workshops in 38 locations to help our partners learn to present the value, to implement it and to run it. Partner enablement is a big part of what we do and we are thoroughly committed to it. At the SAP Database & Technology Partner Summit, about 3/4 of the event is focused on enabling the Partner community on these innovations.
Why is this summit essential?
Murguia: First, this is the chance to fully understand what the real-time business platform is about and how they can create new business streams, new opportunities for their businesses. Second, it is to meet with the SAP leaders – on the technology and business side – about the trends in the business and the directions we are taking.. Third, to interconnect and share with other Partners, who are perhaps ahead of the curve, like learning how to deploy innovation into the customers. Partners rarely do things alone – they collaborate with each other, join forces and tackle projects together.
What is getting the partners excited about Big Data?
Murguia: When I talk with Partners, they are pumped up about SAP Real Time Data Platform.. They’re excited because they’re so close to customers, they live and breathe what their customers are experiencing; which allows them to quickly detect how relevant Big Data and the Real Time Data Platform are for them. That’s why there is so much interest in the event. We have more than 700 people already registered nearly a month before, and we expect more than 1000. It is going to be huge.
Let me give you an example of the changes. There’s an Office Equipment Distributor in Africa that based their business on SAP BusinessOne, and they reached their limits, and migrated to SAP BusinessOne on HANA. Now they’re very happy with the speed and the type of real time reports they can get. So this is an example of small customers embracing HANA. What‘s truly amazing is that 50% of SAP BusinessOne is deployed on HANA here in EMEA now. Our small customers have a lot of interest in the benefits they can gain from in-memory computing.
Another data point: over 50% of SAP Suite on HANA sold in first 9 months this year was sold to customers with revenues less than 500 million euros.Big data is important and impacts all customers, big and small.
We have expanded our coverage into different customer sizes.. In fact, we have dedicated teams working with just Small Businesses and they’re really successful. For example, the fastest growing segment is customers below 100 million euro in revenues. This is a convergence of market trend, with small businesses wanting to compete in global economy and they need the same tools as the large companies. Small businesses need to be as good if not better than their large, global competitors. In order to compensate with the scale of the larger player, Small Businesses need to be innovative and more agile. And it is happening in EMEA, right now, in real time.