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Note: This blog is the first blog in a two-blog series about the recent Sapphire event in Orlando. NetWeaver Cloud evangelist steinermatt tweeted asking about a delivery date, so I wanted to oblige him and get a first blog out.

At the recent Sapphire, SAP’s Cloud Strategy was given a great deal of attention and the keynote by Lars Dalgaard was given special prominence. The most important change was a simplification of SAP’s Cloud offerings with four new SaaS applications acquiring dominant positions:

  • My PEOPLE: Human Capital Management (HCM)
  • My MONEY: Finance
  • MY CUSTOMERS: Customer Relationship Management (CRM)
  • MY VENDORS : Procurement

Previously, there were a variety of OnDemand “solutions” that were available. The new applications combine various aspects of these applications and concentrate on particular use cases that are assumed to better reflect existing customer requirements for Cloud applications.

Musical Chairs

I was curious as to where SAP's old Cloud solutions would be end up in this new strategy, so I created a table to be able to track the changes. I based the table on various assets (videos, presentations, blogs, etc) and conversations that I had at the event.  I decided to expand the list of solutions to include all SAP’s OnDemand offerings that I knew about.

Note: Although I’ve created the table based on my understanding of the new offerings, it may include errors - so bear with me.  

  • =Present in the new application
  • ℹ = Would appear to be a good fit but no details







Business ByDesign

Business ByDesign - Financials

Employee Central

B1 OnDemand

BI OnDemand

Carbon Impact

Sales OnDemand

Travel OnDemand

SAP Information Interchange OnDemand

Content as a Service (CaaS): EHS

E-Invoicing for Compliance OnDemand

Sourcing OnDemand

Data Enrichment and Classification OnDemand

SAP Supplier Infonet powered by SAP HANA

SAP Social Customer Engagement OnDemand

Recalls Plus


Sales &



Ariba (new acquisition)

NetWeaver Cloud Portal

NetWeaver Cloud

NetWeaver Cloud Integration (real Name Unknown)

A quick analysis:

  • Although the simplification into four SaaS apps will help crystallize SAP’s Cloud marketing efforts, it is still unclear how the separate solutions (for example, those dealing with suppliers) will come together and form a cohesive whole.  Besides the obvious changes such as a common User Interface based on the latest SAP style guide, the potential integration difficulties and overlapping functionality make such endeavors a challenge.
  • Some existing offerings B1 OnDemand and core ByDesign functionality aren’t included in these new apps since they are directed at a different market segment – SME and midmarket rather than Large Enterprise (LE).
  • Streamwork will be absorbed into the new social “project” – Project Robus. I’m assuming that this functionality will be included in the four new SaaS applications.
  • What I don’t know is whether the individual solutions will disappear from the marketplace – absorbed into the new SaaS apps – or whether they will still be available as individual solutions.
  • I have no idea what happens to Carbon Impact and the CaaS offering. You can’t find any other details about their fate.
  • There are a variety of other SuccessFactors SaaS applications (for example, Compensation) that exist. I have  no idea how they fit into this consolidation.

There are two types of Cloud offerings included in my table that have different relationships with the four new SaaS applications.

  • The NetWeaver Cloud and NetWeaver Cloud Integration offerings perform complementary functions rather than being included directly in the four SaaS applications.
  • Although Lars stressed the critical importance of HANA in the applications in question, the applications based on the HANA AppCloud were not mentioned.

I tried to figure out how and why the three Cloud offerings types were distinct.   Some differences are based on the functionality provided. Another reason is associated with the organizational unit in which they originate. The three different types are based on three different organizational units in SAP.

Note: There are probably other SAP organizational units which are involved in Cloud activities but they are unknown to me. As an outsider who is not privy to all the internal details of the company, my understanding of SAP organization might not be 100% correct.

Type of Offering



NetWeaver OnDemand offerings

Technology and Innovation Platform Core (TIP Core)

This is the business unit headed by Björn Görke that provides OnPremise and OnDemand offerings which are usually with NetWeaver brand. This unit provides functionality that is used by Cloud Business Unit.

SaaS applications (LE) and their internal components. Cloud offerings for the midmarket and SMEs.

Cloud Business Unit

This is the new business unit controlled by Lars Dalgaard which is focused on selling Cloud SaaS applications. 

Applications running in the HANA AppCloud

“Hana Cloud Solutions”(I’m not sure of the name here)

This business unit is probably connected directly to Vishal’s Sikka team and is involved in creating Cloud applications that exploit the HANA technology.

Note: The supplier-related cloud activities could be associated with newly acquired Ariba rather than Lars’ Cloud Business Unit.

Upon completion of the transaction, it is planned to consolidate all cloud-related supplier assets of SAP under Ariba.  The existing management team will continue to lead Ariba, which will operate as an independent business under the name “Ariba, an SAP company.” [SOURCE]

The impact of this decision on the ability of the Cloud Business Unit to meet Lars’ sales goals is unknown.  The necessity of consolidating Cloud-related activities in one business unit would be detrimentally affected by such a split and might lead to exactly the organizational inefficiencies that Lars is hoping to decrease by centralizing Cloud activities.

Although bound by common corporate goals, each organizational unit has different goals that are specific to its particular function in SAP. These distinct units also have different types of relationships with each other – these distinctions impact their respective attitude towards the Cloud.

Too often, SAP’s Cloud strategy is viewed as being monolithic and only associated with the new Cloud Business Unit from Lars. This business unit might dominate the strategy in this area but a complete picture can only be provided when you look at how these various organizational units interact.

Can the NetWeaver Cloud survive Lars’ SaaS Chastity Belt?

Note: This section deals with my interpretation of the impact of SAP’s organization on its Cloud Strategy. Since I’m not sure that totally understands the relationships between various organizational units, it should be taken with a grain of salt.

As mentioned above, the NetWeaver Cloud originates from the TIP Core business unit which provides both OnPremise and OnDemand software for which there are various internal customer / stakeholders.

For the NetWeaver Cloud, there are various internal stakeholders (including the team creating the NetWeaver Cloud Portal).  The “premier” stakeholder, however, for the NetWeaver Cloud is Lars’ Cloud Business Unit.

As a PaaS, the NetWeaver Cloud is by nature “promiscuous” and can be used to fulfill a variety of use cases.

Like any software product, the needs of customers influence the evolution / developed feature set. The more important the customer the more emphasis is placed on meeting their respective business requirements.

If you look at the use cases on which NetWeaver Cloud’s premier customer focuses, you will see that the use cases relate to extending the four new SaaS applications.

Examining the use cases supported by the platform, I assume that we will see more emphasis on those use cases that originate from Lars’ group.

Furthermore, the initial Go-to-Market (GTM) strategy for the NetWeaver Cloud will also focus on tapping into the existing SAP customer base.

What impact will these two factors have on the evolution of the platform?

Support for other scenarios (BusinessWeb, etc) will proceed as well but with fewer resources and, therefore, at a slower pace. Of course, functionality that meets the requirements of Lars group may also be used for other scenarios but this will not always be the case.

The importance of these SaaS applications in SAP’s overall success makes this strategy understandable. Of equal importance is that the NetWeaver Cloud team must remember that its long-term survival depends on creating a broader developer base than that associated with use cases based primarily on the needs of the Cloud Business Unit.

Shift from midmarket / SME to LE

Previously, the focus of SAP’s Cloud Strategy was on the midmarket and SMEs. Historically speaking, Business ByDesign was the flagship of the cloud offerings.


The LoB applications (Travel OnDemand, Sales OnDemand, etc) were the major Large Enterprise (LE) offerings and – although available as standalone applications - provided “innovation without disruption” for existing OnPremise customers and were often seen as complementary to existing OnPremise offerings.

Business ByDesign was also present in the LE market but only as a vehicle to provide support for LE subsidiaries. 

The acquisition of SuccessFactors and the central role of Employee Central in SAP’s HR strategy signaled a first shift away from a mid-market and SME-centric focus.  Lar’s keynote at the Sapphire introduced three other major SaaS applications in the LE market and revealed the full extent of this change.

Although these new LE offerings can be integrated into OnPremise assets (for example, MyCustomer and SAP CRM), their positioning has changed. These solutions are complemented by OnPremise assets rather than the other way around. For some of these new solutions (for example, myMoney) there is no mention of integration with OnPremise assets.  SAP still pushes a hybrid model (OnDemand + OnPremise) but the balance of power between the two environments is more equal than in the past.

Note: I’m not saying that the midmarket and SME offerings are disappearing – as Lars emphasized, both ByDesign and Business One OnDemand will remain to service their respective markets.

This change in focus represents a more aggressive stance of the new Cloud Business Unit vs the OnPremise / Business Suite organization and allows the new SaaS apps to be a possible choice for LE customers who are presently not SAP customers.  It is this change in attitude which should also allow Lars to achieve his ambitious sales goals.

This shift doesn’t mean the characteristics of SAP’s cloud offerings for all three. markets share the same characteristics. What is interesting is that the SME and midmarket offerings from SAP are suites while the LE offerings are now focused on SaaS applications. In an internal email, Lars described the motivation behind these loosely coupled applications.

Most customers won’t buy a total cloud suite yet, but they will buy multiple products, loosely coupled together, especially in the enterprise. Often we won’t be able to predict how they will buy them, and we often see they buy combinations of products we would not expect. [SOURCE]

What remains unspoken, however, is whether this analysis is restricted to the LE market or whether the same issue exists for the midmarket and SME market. Could this be the reason for the relatively slow uptake of ByDesign?

Despite this shift towards loosely connected apps, SAP still seems reluctant to forgo the idea of the Suite. As Sven Denecken described in a recent slide set of SAP’s Cloud Strategy:  “When used together, these solutions offer the value proposition of a suite”.

Application focus:  Where are those consumer applications?

During Hasso Plattner’s keynote at the Sapphire, there was one slide that I found especially interesting – it showed a pyramid that showed the “best opportunities for applications”.

Although the keynote was focused on HANA-related use cases, the fact that consumers / customers are the most important market for such applications was a revelation.  The use cases related to internal / employee-related use cases are described as having less potential.

Since Hasso didn’t restrict his comments to OnPremise applications. I tried to figure out how this statement related to SAP’s Cloud Strategy

The role of SAP’s new Cloud Business Unit plays in such consumer-focused use cases appears to be non-existent. If you look at the material provided by Lars and his group, the focus is primarily on business / internal users rather than on consumers.

I remember one application that was released by SAP early this year called RecallsPlus that is a perfect representation of a new type of application that exploits HANA and is focused directly towards consumers.   The application is based on the HANA AppCloud.  Recalls Plus is supposedly the first in a series of consumer-oriented mobile apps (many of which originate in SAP’s AppHaus).

The SAP AppHaus is focused on developing applications that connect businesses with customers, filling unmet needs, and delivering a great user experience. In delivering apps to consumers, the SAP AppHaus serves SAP’s customers’ customers. According to Xiaquon Clever, SVP of HANA Applications, the aim is to give value to these customers’ customers and thereby generate indirect value for SAP’s customers. The vision is to eventually create applications that connect businesses and consumers more directly while giving value to both groups. [SOURCE]

I assume that these new applications will also be based on the HANA AppCloud.

Here is a quick depiction of this distinction.

Of the four new SaaS applications, myCustomers best meets this new customer/consumer-focus.

My colleagues from the SAP NetWeaver Cloud team will obviously say that this platform could also be used for this purpose. However, if you look at the slides from Lars’ keynote, you will see that the focus of this platform will be to extend the functionality of the four SaaS applications rather than look at other use cases. This restriction could be seen as another example of Lars’ SaaS Chastity belt.

Coming Soon

My next blog in this series should include the following topics:

  • The implications of the shift from a focus from PaaS to SaaS 
  • The process-related implications of loosely-coupled SaaS applications
  • A return to an emphasis of process-knowledge over technology in SAP’s Cloud offerings
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