SAP CEO Christian Klein emphasizes the company's focus on CX
SAP CEO Christian Klein emphasizes the company's focus on CX

Can SAP Leapfrog Salesforce by Going All-In on CX plus ERP?

14877 0

As the world’s largest vendor of enterprise apps takes on the world’s largest vendor of cloud apps, SAP and Salesforce are offering wildly different approaches to helping businesses achieve the customer-centric capabilities essential for success in the digital economy.

(In my weekly Cloud Wars Top 10 rankings, Salesforce is #3 and SAP is #5.)

At its Customer Experience (CX) LIVE event yesterday, SAP drove home the point that the creation and fulfillment of superb customer experiences requires end-to-end capabilities across an enterprise that include but are not limited to CX.

And SAP attempted to position Salesforce, the world’s dominant provider of CRM applications, as a niche player focused on fragmented CRM transactions that are far too limited to deliver superb customer experiences.

“You cannot think about CX separately,” Klein said during his keynote at his company’s CX event. Rather, CX “needs to be considered as an integral part of an intelligent enterprise.” 

Klein is betting SAP’s future on its ability to convince business customers and partners that its vast and “holistic” suite of enterprise apps—including not just CX and CRM but also ERP and HCM—can create those seamless engagements and relationships that consumers and business customers are demanding today.

And while he didn’t say this specifically, it was clear that Klein and SAP believe that Salesforce—which since its inception in 1999 has focused solely on CRM—is simply too limited in scope and capability to match the end-to-end interconnectedness that SAP can deliver.

But that singular focus that Klein feels is a bug is something Salesforce CEO Marc Benioff believes is a feature—in fact, a killer feature.

In a recent analysis of Salesforce’s Q2 earnings call headlined The Magic of Marc Benioff: 10 Key Drivers behind Salesforce Q2 Surge, I posed this question and then offered up Benioff’s perspective from the earnings call.

In the article, I asked, “Is a relatively narrow product focus good or bad in the enterprise-software business?” And then I shared this earnings-call comment from Benioff: 

A lot of our competitors are everywhere. They’re in every market. Some of them are in enterprise and consumer. They’re not just in CRM, they’re also in HCM. They’re in ERP. They’re public cloud. I mean, we’re not—we’re singularly focused.

Out of that focus comes the unique Salesforce deliverable to which the company is passionately devoted: Customer 360. Or as Benioff often describes it, “A single version of customer truth.”

But at yesterday’s CX event, SAP rolled out its own distinct take on that all-important concept. And while SAP’s terminology might be a bit less colorful than Benioff’s, the power of the underlying concept is every bit as powerful because SAP can interconnect more data from more sources with more context than Salesforce can. (Or that almost anyone else can, for that matter.)

That introduction of the SAP Customer Data Platform was a highlight of Klein’s keynote, and here’s a description of it from an SAP blog post:

The new platform will enable organizations to create individual but anonymized 360-degree customer profiles using data from multiple sources within and outside of a company, including online sources and social channels.

Klein’s announcement, made on the first day of the online event, underscores SAP’s commitment to the growing market for customer experience (CX) software and its role in building the Intelligent Enterprise….

“We are continuously evolving our CX portfolio while keeping our focus areas at heart – SAP Commerce Cloud, SAP Marketing Cloud, SAP Sales Cloud, SAP Services Cloud, and our brand-new SAP Customer Data Platform,” he added. “Our investments in those areas — most recently the planned acquisition of Emarsys — demonstrate our commitment to the CX market.”

So we have two immensely successful and influential companies doing some similar things but in wildly different ways. Which approach is the right one?

You certainly cannot argue with the success of either company, and each has hammered out a unique position in the market in large part because it went its own way. Both approaches have great merit.

Salesforce will finish this calendar year with just over $20 billion in revenue and a growth rate of about 25%. If that’s not a great endorsement for being focused, then I don’t know what is.

SAP will finish the year with around $32 billion in annual revenue, with about one-third of that coming from the cloud. It’s showing significant growth in all segments of its huge portfolio, and the CX business should quickly become one of its fastest-growing units. So there’s a lot to be said for the big-portfolio strategy of SAP as well.

Business customers will reap big rewards from this fierce and high-level competition, and can also look at CRM/CX solutions from Adobe, Oracle, Microsoft and others.

But at least for a while, the primary head-to-head battle between CRM leader Salesforce and CX challenger SAP will be the primary driver huge amounts of innovation and customer-centric disruption for businesses in every industry.

Disclosure: at the time of this writing, SAP and Oracle were among the many clients of Cloud Wars Media LLC and/or Evans Strategic Communications LLC.

 

Subscribe to the Cloud Wars Newsletter for in-depth analysis of the major cloud vendors from the perspective of business customers. It’s free, it’s exclusive and it’s great!