Friday, November 14, 2008

SAP Hires Guy Who Couldn't Get it Done at Oracle

SAP has sent a strong signal to its customers by hiring John Wookey to run its enterprise on-demand business, saying that, in effect, it will really, really integrate SAAS into its overall business plan.

Joshua Greenbaum is probably right in surmising that Wookey will start slowly, though, selectively adding applications to the cloud that complement SAP's existing on-premise software, rather than trying to create a SAAS alternative to every perpetual license product.

SAP’s large enterprise, on-demand efforts will likely start with running specific processes and services in the cloud that are both highly discrete and have a distinct value-add above and beyond the cost benefits of merely flipping on-premise functionality into the cloud a la That latter model eventually ends up in a price war, and flies in the face of SAP’s higher value market position.
But Wookey also brings Oracle's acquisition-happy culture in his baggage, and will probably try to buy--rather than build--other complementary pieces for the on-demand business.

That may not sit well with SAP's engineering-focused culture, but the fact that SAP hired Wookey may be an indication that CEO-elect Leo Apotheker is ready to break with some tradition.

On the flip side, Wookey is available because Oracle CEO Larry Ellison got tired of waiting for him to deliver the Fusion product that is to be the glue for the disparate systems Oracle has bought and dumped in its customers' laps over the past few years.

SAP is hoping that Wookey will have more success blending products this time around, but SAP customers should be wary of any product-service integration promises. Just ask Oracle customers what they think.

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