SAP CX — A Deep Look into the Glass Ball

What we know and can observe

  • SAP is strong with B2B customers. Manufacturing, but also CPG companies are some of the biggest customers.
  • In the CX area, SAP is not particularly strong in with its Marketing Cloud (although the software is underrated in my eyes)
  • With SAP Commerce, SAP owns one of the leading E-Commerce solutions.
  • The Sales- and Service Clouds are pretty strong and do not need to hide.
  • Growth in the Sales Cloud seems to be declining.
  • The Sales- and Service Clouds are functionally adjacent to SAP’s core business, which is the ERP aka Digital Core. Marketing is not.
  • SAP is investing in the service area, especially in S/4. The customer service module in S/4 is also essentially the former CRM Service.
  • One of the four core processes that SAP has defined is lead to cash, which includes a lot of Commerce Cloud and Sales Cloud, augmented by quite some ex Callidus (CPQ, Commissions) and some Marketing Cloud.
  • SAP CPQ, the former Callidus CPQ has been moved organizationally towards the ERP group.
  • A good part of the on premise SAP CRM Sales and Service have been made part of S/4HANA.
  • SAP has invested a lot into integrating the acquired solutions into the own software; this to an extent that made customers worried about the further roadmap.
  • SAP has created a number of microservices on the SAP Cloud Platform that resemble business objects, in particular the business partner and with SAP Graph has introduced a business object orientated access model for its solutions, which abstracts away from the actual data layer.
  • The Commerce Cloud is undergoing some modularization and the storefront is getting disjoint with Spartacus; this essentially creates a headless commerce solution, which goes beyond E-Commerce but makes commerce channel agnostic.
  • In a recent investor interview (to which I wasn’t invited, so I took the quotes from a cloudwars post by Bob Evans), SAP CFO Luka Mucic made a few interesting statements about the SAP CX stance:
  • So, first of all, customer experience is absolutely a key market in which we want to be a significant player but with a focus on those categories where we clearly see that there is potential for SAP to be a strong #1 or #2 player.
  • There is a very obvious one in which we are leading the market and that’s the whole area of experience management, where we have Qualtrics, which is the category leader and that we are truly excited about and we are obviously looking at a partial IPO of Qualtrics to even further exemplify and magnify our growth opportunities.
  • The other area as I mentioned before is e-commerce, where we have with Hybris a very strong cloud fit that is growing in the high double-digits and that is in huge demand these days in particular with the challenges introduced by COVID. We think this is one of the core investment priorities for many companies around the globe.
  • And then also areas like customer data cloud, for example, where we also have a leading solution that can help customers manage the GDPR and triggers a digital sales motion in a way that is conducive to consumer preferences.
  • In others that from our perspective more translate into commodity markets where the growth rates are coming down and admittedly there is clear market leadership by others, we might look also at one or the other partnership opportunities. And in the meantime of course we see that the rising tide lifts many boats in many of those areas and so we will continue to look practically at an opportunity to participate in this growth.
  • But we don’t necessarily see it as an area in which we would dramatically double down on our investments. But clearly, CX remains a critical pillar of our cloud strategy, just in a little bit more of a focused sense.
  • Not surprisingly, the CX team is incredibly busy.
  • There seems to be considerable effort spent into re-platforming the CX suite, moving it away from the underlying Netweaver, making it cloud native software.
  • The team is building something that they are calling a Customer Data Platform ++. This CDP seems to be built around the Customer Data Cloud as part of its core.
  • SAP has moved a few of its main business objects and engines into the SAP Cloud Platform and/or is breaking them down into micro services.
  • A strategic partnership with Thunderhead seems to be evolving, which is not overly surprising after Thunderhead’s partnership with Salesforce cooled down sudden- and rapidly and with Bob Stutz being the one who initiated the partnership at Salesforce
  • There is some B2B marketing functionality that currently makes its way into the Sales Cloud.

And now you surely ask yourself where all this does lead to?

And finally, some suggestions

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Thomas Wieberneit

Thomas Wieberneit

Helping businesses to improve in Digital Transformation, Customer Engagement, Customer Experience, CRM, Innovation