Never compromise on the caliber of your employees, says Franck Cohen, President, SAP Europe, Middle East & Africa. In an interview with SAP, Franck Cohen is in a reflective mood.
Franck, EMEA is a highly diverse region. Can you make out any general trends, though?
Franck Cohen: The trend we are seeing now is the opposite of what you might expect. In our mature markets, you would think that most new business would be cloud projects, and that we would have more on-premise implementations in our growth markets. Yet over the past months, especially in Spain and Italy, we’ve closed a lot of on-premise deals. In Africa and the Middle East, on the other hand, customers mostly want cloud solutions. The recent past shows that the new markets are leapfrogging entire generations of IT. Why wait five years to fine-tune an on-premise installation when you can implement a cloud solution now?
What about digitalization? Which industries are the fastest adopters?
Franck: Banks, insurance companies, and the media. Lots of industries are experiencing dramatic change, as is retail. Even luxury brands are adopting digital omnichannel strategies. In every industry, though, there are companies that are holding back. But there are also companies that are trialing early solutions, and others that can genuinely be called digital disruptors. The number of companies coming out of the trial stage and going digital on a broad scale will increase rapidly.
What about IoT? Is it taking off?
Franck: IoT itself is a commodity. Many sectors already use sensor data as a matter of course. It’s what you do with sensor data that matters. Applying algorithms, artificial intelligence data models, and machine-learning capabilities bring meaning to it and will become a key differentiators in today’s digital economy. Let me give you an example: The fact that the temperature of a pump can be measured 10 times a second does not add any value. But if I am told that in two days’ time the temperature of the pump will reach a critical point, then I can take the action required. Better still, the action would be triggered automatically. The “on-top” algorithm makes the difference by detecting and interpreting changes in order to forecast events. I believe that the most significant advances will come from machine learning and artificial intelligence. The future belongs to models that automate and manage processes without human involvement and that way generate value.
SAP’s installed base is moving to the cloud. Is that a curse or a blessing for SAP?
Franck: Many pure cloud companies offer just one product, which means they can devote all their resources to it. They have a different focus. We compete with each and every one of them at best-of-breed level. That is a challenge. On the other hand, there is no-one else out there who offers as many cloud products as SAP for all sorts of segments and industries, plus an end-to-end data model and a full range of functions. We have so much more to offer, and can massively simplify our customers’ businesses. Data consistency is one argument that always wins. Our customers can capitalize on that.
Since you mention cloud, is there any news on the talks with the European Union on a white paper for cloud computing vendors? Or will Brexit delay it?
Franck: The EU is keen on an agreement because it doesn’t want to lose cloud business to other parts of the world. If cloud is the future, Europe can’t risk being left behind. Besides, a lot of jobs depend on it. Data protection is a major consideration in Europe. If the EU can’t come up with a data protection policy that everyone follows then who can? No one country is strong enough to push through an agreement that everyone will follow. Brexit won’t change that.
Will Brexit harm SAP’s revenue?
Franck: Look, I don’t have a crystal ball. The negotiations haven’t even started yet, but uncertainty is never good for investment decisions in general.
In the second quarter EMEA and MEE regions proved once again that they are growth engines…
Franck: That’s right, we had a great second quarter because we were firing on all cylinders: double-digit growth in on-premise and 41% growth in the cloud. You can’t complain about that.
How come SAP in Europe did so well?
Franck: Our business is very robust and we also have a stable team of excellent people. They know how to deliver no matter what. It’s straightforward really: Never compromise on the caliber of your employees.
Some of your staff say you are a stickler for standards.
Franck: I guess I am. Every country in EMEA used to do its own thing. We all know you can’t simply take Germany’s processes and apply them one-to-one to Saudi Arabia, for instance. But we don’t need to reinvent the wheel each time. I want my people to channel their creativity toward their customers, rather than spreadsheets and reports. That’s why I wanted to simplify our tasks and free up their time so they can concentrate on getting the real job done.
SAP executives across the board keep emphasizing how important the SAP HANA Cloud Platform is to the business. Why is that?
Franck: Because customers are shifting their IT investments from the back end to the front end. Companies used to spend money primarily on IT infrastructure and ERP systems to manage their core business, and then on consolidation and optimization projects. Now, they need intelligent solutions, like Big Data analytics, to better understand customer behavior and IoT to boost productivity. In marketing, social media analytics are being used to find out what customers are saying about a new product and why. Scenarios like these are on the rise. Software developers need the right kind of platform on which to build applications that can handle all types of information, including unstructured data. That platform is the SAP HANA Cloud Platform.
What else is on your mind when you think about the rest of H2?
Franck: That sometimes we aren’t innovative enough and not as open to new ideas as we should be. If you rely on the experience and knowledge you acquired when you first started out, you will become irrelevant at some point. In our business, you have to stay curious.