Wow, Leo Apotheker’s gone already?

Unbelievable that Leo Apotheker has already fallen on his sword.  There has been tons of chatter about Leo and his demise (Dennis Howlett here, Larry Dignan here, Michael Krigsman here, and the #leogone Twitter feed is here).  Here are a few of my thoughts and questions:

  • Everyone at must be relieved that Hasso is back in charge, morale at SAP has been a mess for a while.  The honesty from Hasso in his press conference was refreshing…the lack thereof is one of the reasons I’m not there.
  • Blaming Business By Design on Leo seems ridiculous…I’ve seen that mentioned a couple of places (here’s Bloomberg).  Didn’t Peter Zencke fall on his sword for this already?  Anyway, absurd.
  • How can anyone have any confidence that giving the development side more power will be fruitful? (see “Blaming Business By Design on Leo seems ridiculous” above)  I agree this represents a shift back to product development.  But what then? 
  • What does the field have left?  Leo supposedly represented the field, but IMO the field has been carrying SAP for a long time.   Will Werner Brandt’s beatings continue until the field’s morale improves?
  • Who else is leaving?  I’m not sure that current leadership gets what Peter Goldmacher states bluntly: “I think SAP is structurally impaired.”  The rot runs much deeper than Leo.

This downturn’s test for SaaS/On Demand

This almost-inevitable downturn will answer one of the open questions about SaaS/On Demand: How “recession-proof” is Saas, really?   Already, an number of SaaS vendors have seen their forecasts taken down, just like normal enterprise vendors (here and here, for example). 

Of course, many still believe that SaaS is recession-proof (see Jeff Kaplan posts and comments here and here).  I certainly don’t believe that as a blanket statement.  In fact, I believe that on demand vendors that focus on edge processes will be in deep trouble.   That’s because one of the benefits of SaaS to customers is the ability to stop consuming whenever they like — and edge applications will get stopped first. 

It is funny how we don’t hear about the benefits of “consumable” services now that consumability doesn’t exactly match the “SaaS is immune” narrative.  Per my earlier rants on this topic (here and here):

The ease with with one can consume services — which certainly does promote usage — is matched by the relative ease with which one can stop consuming services.  If one can get in easily, one can get out easily…. Also, trying to mitigate that risk by locking-in revenue with longer subscription periods sounds good, but it makes SaaS/On Demand too strongly resemble an On Premise relationship.

That last sentence is one example of the On Demand catch-22: as SaaS gets more embedded in the enterprise core, the more it behaves like on premise (e.g., SFDC’s lengthening sales cycles). 

Maybe Harry Debes isn’t so crazy after all (here and here)!

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