SAP’s Sleeping Product Giant

Michael Krigsman and I had a chance to chat last week — he recorded a podcast w/ me that will be up on his blog before too long — and thankfully the chat got my blogging mojo going again. 

I don’t want to steal our podcast’s thunder, so I’ll focus on a tangent from our call — SAP’s innovation problem.  Michael himself has hoped that SAP’s leadership change would help to bring more innovation to market.  Ray Wang put it more bluntly in his take on Leo’s ouster:

[T]he issue is not sales. It’s products. Snabe and Vishal will need strong product vision to right SAP and point it in a forward direction. Engineering and products need more attention to bring out trapped innovation at SAP.

“Trapped innovation”… that’s so much of what I saw at SAP.  There are many cool technologies floating around, but they don’t fit in the “margin now” mindset that has pervaded the company.   The company is stuck in the classic [successful]  innovator’s dilemma:

By only pursuing “sustaining innovations” that perpetuate what has historically helped them succeed, companies unwittingly open the door to “disruptive innovations”.

Even worse,  SAP had deluded themselves into thinking they were responding appropriately — what was marketed as real innovation was simply new wine in old skins.  Exhibit 1 — 2007-2009 versions of Business ByDesign.

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