While SAP expects a return to growth in 2010, there will be no return to business as usual, according to SAP CEO Leo Apotheker, who credits “the worst recession in decades” for driving lasting change in how the world’s largest provider of business software will sell and implement its products.

SAP forecasts a 4% - 8% year-over-year growth in revenue for 2010. But the company must adapt to changes in how purchase decisions are made today, as well as to changes in customers’ expectations for the implementation process, said Apotheker.

"Purchasing decisions are made much more cautiously and with some delay," Apotheker said. "The way software is implemented and used has also changed. Customers want to generate value from their investments faster, and they want to implement solutions faster than ever before."

Read InformationWeek article: SAP Details Prospects for 2010

Industry research firm Gartner also predicts a return to growth for worldwide IT spending in 2010, forecasting a year-over-year increase of 3.3%.

Like Apotheker, Gartner notes significant changes in IT buying practices. Most notably, a shift from capital expenditure to operational expenditure; and, the inviolable prerequisite of a compelling business case for any IT spending.

So, how is SAP executing on Apotheker’s rhetoric of change?

For large enterprise customers, here are a few examples of how SAP is lowering TCO, facilitating easier implementations and upgrades, providing faster time-to-value, and demonstrating increased sensitivity to budgetary constraints:

• Powered by the SOA-ready NetWeaver 7.0 business-process platform, modularity of ECC 6.0 and SAP Business Suite 7.0 applications allows for faster implementation, faster time to value and a build-as-you-grow strategy.
• Fast, easy, differentiating business-process innovation via enterprise services & composite applications.
• SAP’s extension of "flexible licensing agreements" to 500 customers that spend at least $2.2 million annually.
• The development of on-demand, cloud-based extensions to SAP business applications.
• Upgrade only what is needed/wanted today via enhancement packages.
• SAP/SUGEN working together to identify/measure key metrics that justify a maintenance-fee hike to 22%. SAP’s postponement of maintenance-fee hike and tiered support offering.
• Development of in-memory analytic technology for anywhere/anytime reporting.
• Integration of BusinessObjects BI capabilities for enhanced enterprise performance management, business analytics, and governance, risk and compliance solutions.

Collectively, the following articles provide a solid overview of SAP’s vision for 2010 and beyond:

SAP Intros Tiered Support

SAP Sets Pace on Flexible Software Pricing

The Road Ahead

SAP’s 5-year Software Plan

SAP Planning to Open On-demand Development Platform

SAP Wants to Transform its ERP Image

SAP has made quite a bit of noise with media over the past few weeks with a display of customer responsiveness on a scale that is unprecedented among large enterprise software vendors. From a new hosted, subscription-based model for SMEs, to tiered support for its large customers, SAP’s sensitivity to the economic plight of its customers rings loud and clear.

In a move that enables mid-market companies to reap the benefits of running their business on SAP while preserving cash flow, SAP recently announced a new program that allows select SAP partners to offer qualified, industry-specific SAP Business All-in-One partner solutions on a hosted, subscription basis.

Read ChannelInsider article: SAP Offers Subscription Pricing

Adding more fuel to its mid-market push, SAP recently named former HP and Arrow Electronics exec Kevin Gilroy VP of its North American SME channel.

Said Elliott Garofalo, senior vice president, SME, for SAP Partner Optimal Solutions:



“Kevin Gilroy brings a wealth of SME channel experience to SAP during a pivotal period in the company’s history. This is a very exciting time for SAP partners such as Optimal who have ramped up their offering of qualified SAP Business All-in-One partner solutions for the mid-market. We’ve broken new ground with our hosted, subscription-based delivery model, which has generated quite a bit of interest among SMEs, and we believe 2010 will mark an inflection point for Optimal in terms of mid-market sales. That SAP has appointed such a high-caliber, experienced industry veteran to lead its North American SME channel attests to the company’s commitment to its channel partners as well as to its aggressive mid-market growth goals.”

Said Kevin Gilroy:

“I'm passionate about the channel. I've always been an advocate for the channel and a good listener. I'm empathetic for what [VARs] need from SAP. But I'm also empathetic for what we need [at SAP] in terms of growth, market reach, things like that. I'll drive the agenda in a hard, aggressive way.”

Read ChannelWeb article: Gilroy On New SAP Job: I’m Jazzed

Reversing its 2008 decision to make  Enterprise Support mandatory for all of its LE customers, and bucking the industry trend of charging customers 22% annually for maintenance and support, SAP announced earlier this week that, in response to customer feedback, it will introduce a tiered support system, charging 18% for standard support and 22% for its more proactive Enterprise Support.

Read InformationWeek article: SAP Offers Two-Tiered Support

The marketing mantra “Voice of the Customer” will resound throughout 2010 among virtually all enterprise software vendors. But how will the customer's elevated status play out in terms of tangible, measurable and meaningful customer-facing initiatives implemented by software vendors in 2010? As the world’s leading provider of business software, all eyes turn to SAP at the beginning of this new year to see if the “Voice of the Customer” is being heard and to learn how SAP is responding.

Already in 2010, SAP has set the bar high in terms of customer responsiveness, listening (and responding) to its user groups, postponing (maybe even quashing) a planned maintenance fee hike, and breaking new ground (for SAP customers of all sizes) with flexible pricing.

Have ears to listen

Listening to 92,000 customers across 120 countries and spanning hundreds of industries is no easy task. Customer user groups are instrumental in SAP’s commitment to listening to its customers. Today, SAP global user groups span 30 unique chapters across 6 continents – these groups help approximately 8,000 companies and 120,000 individual members to achieve their business goals.

Learn more: SAP Customers: User Groups

Keep maintenance costs low

A significant example of SAP's willingness to listen to its customers and respond accordingly is the company’s decision to put off its proposed hike in maintenance fees. Working closely with the independent SAP User Group Executive Network (SUGEN) a selection of Value Key Performance Indicators have been established for SAP Enterprise Support to ensure that the value delivered by Enterprise support aligns with the needs and expectations of SAP customers. Moreover, it has recently been rumored that SAP may inject flexibility into its maintenance fee, offering a tiered model instead of a flat 22%.

Read InformationWeek article: SAP Tiered Maintenance Fees?

Offer flexible pricing

Nothing drives down capital expenditure faster than a tough economy, and SAP extending subscription pricing to its largest, cash-strapped customers is one way the software giant is helping these companies weather today’s recession. Extending this goodwill, around October of this year, SAP began offering subscription pricing to 500 customers that spend at least 2.2 million per year on SAP software.

Read BusinessWeek article: SAP Sets Pace on Flexible Software Pricing

Blazing the trail for subscription-based SAP pricing for SMEs, in May 2009 with SAP's blessing SAP partner Optimal Solutions announced a unique subscription-based model for buying, implementing and supporting SAP solutions.

Read eWeek article: Optimal Unveils Subscription-based Pricing  

During the first 9 months of 2009, SAP’s software licensing revenue fell 35%. During this same period, SAP’s subscription revenue grew 21%. While subscription revenue accounted for a mere 4% of SAP’s Q3 earnings, the opposite directions of these two revenue streams bring into clear relief the growing popularity of subscription-based pricing for SAP software.

Is this uptick in subscription-based pricing a short-lived anomaly occasioned by today’s turbulent economy? Or are we witnessing a bona fide and sustainable trend toward subscription pricing over traditional product licensing?

According to Gartner, by 2012 at least one third of business application software spending will be subscription-based instead of product license.

Read Gartner press release: Key Predictions for IT Organizations and Users in 2008 and Beyond

SAP has always provided flexible payments to its very biggest customers, but around October of this year, after its fourth straight quarterly decline in license sales, SAP began offering subscription pricing to 500 customers that spend at least 2.2 million per year on SAP software.

Read BusinessWeek article: SAP Sets Pace on Flexible Software Pricing

Nothing drives down capital expenditure faster than a tough economy, and SAP extending subscription pricing to its largest, cash-strapped customers is one way the software giant is helping these companies weather today’s recession. Earning additional goodwill, SAP has also postponed the timing of its planned price increase for maintenance, and it is rumored that SAP may even inject flexibility into its maintenance fee, offering a tiered model instead of a flat 22%.

Read InformationWeek article: SAP Tiered Maintenance Fees?

But SAP’s direct offering of subscription pricing covers only a minute fraction of its total customer base. After all, 75% (70,500) of SAP’s 92,000 customers are SMEs. And not only do SMEs represent SAP’s largest market segment, they are also SAP’s fastest growing market segment, with SAP acquiring approximately 35 new SME customers every working day.

So how, exactly, will the subscription-pricing trend play out in the world of SAP SME customers?

So far nearly 90% of the 160 respondents to an informal poll initiated several months ago (and still running) in the Optimal SAP Blog (eyes right) and the Optimal SAP Implementation webisode series have expressed interest in learning more about a subscription-based pricing model available today for SAP.

Clearly, if subscription pricing for SAP is truly going to take off, it will have to catch fire with SAP’s SME customers. For this to happen, SAP partners will have to step up their subscription-pricing models, as the lions’ share of SAP’s SME customers are generated by SAP partners. (50,500 of SAP’s 70,500 SME customers are acquired through SAP’s 5,400 partners).

Blazing the trail for subscription-based SAP pricing for SMEs, in May 2009 SAP partner Optimal Solutions announced a unique subscription-based model for buying, implementing and supporting SAP solutions.

By offering fixed monthly payments over 3, 5 or 7-year contracts that comprise SAP licensing, maintenance, implementation, hardware, hosting, and support, Optimal Solutions provides midsize companies flexibility, predictability and affordability for running their businesses on SAP.

Read eWeek article: Optimal Unveils Subscription-based Pricing

The budget situation at the state level looks dire: 43 states reported a budget shortfall for fiscal year 2009, totaling $183 billion. That figure increases to $200 billion for fiscal year 2010, according to the National Conference of State Legislatures.

More than ever before, federal, state and local government organizations need a software solution specifically developed to help them make fast, fiscally sound budgetary decisions by providing accurate, real-time information and automating core, decision-related processes.

SAP’s new Public Budget Formulation (SAP PBF) solution addresses the unique budgetary needs and processes of federal, state and local government and education organizations, including incremental, zero-based and performance-based budgeting.

Read SAP press release: Smart Budgeting Helps Optimize Scarce Tax Dollars

Optimal Solutions, a leader in SAP-based business transformation, is among the first SAP partners to receive SAP Certification to market and implement the SAP PBF software solution to public sector organizations throughout the United States and Canada.

Read Optimal press release: Optimal Solutions Receives SAP Certification to Market and Implement SAP Public Budget Formulation Solution

Optimal’s strong SAP expertise and proven public sector ability factored heavily in the firm's selection for SAP PBF certification.

Optimal's SAP consulting experience in the public sector includes work on projects at NASA, the U.S. Department of Defense, the District of Columbia, the State of Washington, Howard County, and the Port Authority of New York & New Jersey, among other public sector SAP sites.
 

Optimal Solutions Integration, Inc., a leader in SAP-based business transformation, has big plans for near- and long-term growth, and has added a big gun to the company's board of directors to help guide Optimal's aggressive growth strategy.

“Optimal is well known as an SAP consulting firm that excels in planning, deploying, and maintaining world-class SAP solutions for public sector organizations and companies spanning a wide range of industries,” said Tomb. “Optimal’s sustained growth over the past decade is impressive. The company is actively bringing to market a portfolio of SAP Business All-in-One solutions, which positions Optimal well to capitalize on the strong demand among mid-market companies for fast, affordable and effective SAP solutions that address immediate business challenges and easily scale to accommodate growth. I’m excited to assist Optimal’s executive team as the company enters into its next phase of growth.”

Read Optimal Solutions Integration press release: Former CEO of SAP North America Greg Tomb Joins Optimal Solutions' Board of Directors  

In February 2009, with economic doomsayers monopolizing headlines, Sam Sliman, president for Optimal Solutions, wrote an article with a strikingly contrarian premise; namely, that individual businesses as well as the overall economy would recover quicker than expected and at a much faster pace than recoveries from past economic downturns as a direct result of investments made over the past several years in SAP software.

Sam’s three-part article was originally published in the Optimal SAP Advisor newsletter in February and March of this year.

Today, we are about one-third of the way into the quarterly earnings season and a remarkable 78% of the S&P 500 companies have delivered a positive earnings surprise, according to HSBC as reported in Financial Times.

Does this mark the beginning of a sustainable economic recovery? Only an accredited prophet can say for certain, but it is certainly a positive sign, and adds further prescience to Sam’s article published again last week by InsideSAP.

Read Sam Sliman’s three-part article published in toto by InsideSAP:

SAP’s Role in the Economic Upturn (Part One)

SAP’s Role in the Economic Upturn (Part Two)

SAP’s Role in the Economic Upturn (Part Three)

NOTE: Updated information on SAP's global reach: SAP currently has more than 89,000 customers in more than 120 countries, and 69% of the Forbes 2,000 companies run SAP software.

85% of respondents to the survey currently running on the Optimal SAP Blog and the Optimal SAP Implementation Documentary Blog have expressed interest in learning more about a hosted, subscription-based delivery model available today (other than Business ByDesign) for running their business on SAP.

Not too surprising when one considers the significant benefits of a hosted, subscription-based delivery model for SAP against the backdrop of today's capex crunch, steep maintenance fees and rising risk aversion among CIOs and CEOs tasked with plotting a course to sustainable growth and competitive advantage as the economy recovers.

Read Optimal Solutions press release:  Subscription-based Model for Buying, Implementing, Hosting and Supporting SAP Solutions.

Given today's challenging economic and business climate, more and more C-level execs are open to innovative models such as subscription-based SAP.

Read InformationWeek article by Mary Hayes Weier: Alternative IT

We'll keep our poll regarding interest in hosted, subscription-based SAP open through the remainder of 2009, so vote now if you haven't already, and check back frequently to check out the tally. 

Much substantive debate and meaningful discussion remains before universal consensus is achieved on the true meanings of Cloud Computing, On-Demand and SaaS.

But let’s put aside nebulous terms and amorphous labels just long enough to answer a single straightforward question: 

How interested are you in learning about a hosted, subscription-based model available today (other than Business ByDesign) for running your business on SAP?

Eyes right. Weigh in with your vote. Learn what your peers are thinking. Thank you for voting!

Now, on with this post…

Technology landscapes are transitioning right now before our eyes, particularly for small and midsize companies with tight budgets and aggressive growth goals.

The well-known benefits of – Cloud Computing, On-Demand, SaaS (pick your term) – are, in large part, driving this rapid transition.

Fast implementation. Minimal upfront expense. Little-to-no training. Low total cost of ownership. No internal management. No capacity planning, etc.

This is not to say that the current offering of commercially available, pure-play – pick your term – solutions are without blemish or risk.

Questionable scalability. Limited functionality. Governance and security. Generic industry-indifference. Well-publicized outages. Lack of historical performance data, etc.

The reigning, more pressing question: When will the larger, well-established software vendors SAP and Oracle have a viable – pick your term – solution commercially available for fast-growing small and midsize companies?

According to Oracle CEO Larry Ellison, the transition from the traditional on-premise model to the emergent – pick your term  – model will take his company about 10 years.

You read that right. Straight from the horse’s mouth. 10 years. That's eons in the world of technology innovation.

Read Global CIO Blog post by Bob Evans: Oracle And SAP Race For Mid-Market Opportunities

SAP’s time frame for Business ByDesign, while markedly tighter than Oracle’s, has been derailed by well-documented setbacks.

Read Optimal SAP Advisor blog post: Media Overweights Business ByDesign

Equally telling is the stark difference between SAP and Oracle’s approach to developing a commercially available – pick your term – offering.

In the September 2009 issue of SAP Spectrum, John Wookey, vice president in charge of SAP’s on-demand offering for large enterprises, matter-of-factly states:

“From the very start of the development process, we have to have an intimate knowledge of the customer problem that we’re trying to solve.”

Contrast this with Larry Ellison's thoughts on his company’s – fill in your term – offering, shared during a recent Q&A event.

Reportedly, Ellison touched on virtually every technological and competitive aspect of the question, but surprisingly made little-to-no mention of the customer’s perspective.

Said Bob Evans, TechWeb's senior vice-president and content director, who attended the event: 

“It just seemed a bit odd – actually, maybe more than a bit – to see these sweeping and penetrating and candid comments from one of the world's top executives with so little mention of the role that customers are playing in [Ellison’s] thinking.”

Read InformationWeek article by Bob Evans: An Open Letter To Oracle CEO Larry Ellison

In his article comparing and contrasting SAP and Oracle’s mid-market strategy, particularly on the – fill in the blank – front, Bob Evans posits the following, poignant and arguably decisive question:

“Will [SAP and Oracle] try some customer-focused experiments with SaaS products and services to give these medium-sized companies additional choice and flexibility?”

Answering the bell, SAP premier consulting firm and channel partner Optimal Solutions Integration recently launched the company’s innovative FlexChoice Advantage program, a hosted, subscription-based delivery of SAP for midsize companies via fixed monthly payments over 3, 5 or 7-year contracts that comprise SAP licensing, maintenance, implementation, hardware, hosting, delivery and support.

Read Optimal Solution’s press release: Optimal Solutions Announces Hosted, Subscription-Based Model for Buying, Implementing and Supporting SAP Solutions

So as not to muddy the marketing waters around SAP’s on-demand Business ByDesign product and Wookey’s – pick your term – project under development for larger customers, SAP has requested that Optimal Solutions refrain from using – fill in your term – when describing the company’s innovative FlexChoice Advantage offering.

No worries. Not a problem for Optimal. Benefits speak louder than industry jargon.

In the spirit of preserving its long-standing harmonious and productive partnership with SAP, Optimal does its utmost not to use – fill in your term – verbiage when discussing its FlexChoice Advantage program, available for the company’s growing portfolio of OPTIMIZE qualified SAP Business All-in-One solutions for fast-growing small and midsize customers.

After all, what's in a name? That which we call - fill in your term - by any other name would smell as sweet...

Provided the business benefits are real, tangible, meaningful and measurable - which in the case of FlexChoice Advantage they are.

So, if you voted for wanting more information about a hosted, subscription-based model available today (other than Business ByDesign) for running your business on SAP, give the expert SAP consultants at Optimal Solutions a ping: info@optimalsol.com.

And if you're looking for a great source of breaking - fill in your term - news and insightful analysis, be sure to check out Mary Hayes Weier's blog: Plug Into the Cloud.

A sluggish economy has done little to lessen the anticipated global shortage of SAP consultants. On Monday of this week an SAP official remarked that currently 30,000 openings exist for SAP consultants to support the company’s worldwide base of more than 82,000 customers.

Read Global CIO blog post: 30,000 Job Openings For SAP Consultants, SAP Official Says

As an integral part of its plan to proactively address this shortage, SAP has been hitting the college campus trail and ramping up enrollment in its University Alliance Program.

SAP's stated objective, as of June of 2008, was to quadruple participants in its University Alliance Program from 900 to 4,000 universities over the following few years. SAP's latest conquest in this mission: NC State College.

Read Carolina NewsWire article: NC State College of Management Joins SAP University Alliance Program

SAP also relies heavily on its partner ecosystem to ensure there is enough SAP talent to meet present and future demand, calling upon its largest 20 services partners to recruit, train or retrain a growing number of pros now and in the years ahead.

SAP also has high talent recruiting and development expectations for its network of 3,000+ tier two consulting partners, many of whom are well positioned to cultivate and grow SAP talent in vital geographic regions and vertical industries.

Read article by Sam Sliman, president for Optimal Solutions Integration: Surviving the SAP Talent Crunch  

Around May of 2008, SAP went on record to say that it anticipated a global shortage of 30,000 - 50,000 skilled SAP professionals in the years ahead. AMR analyst Bruce Richardson put this number closer to 70,000. So what is SAP doing to ameliorate this shortage? For starters, collaborating with LinkedIn, the 44-million-member social networking website for business professionals.

Several months after SAP publicly acknowledged the pending shortage of skilled SAP professionals, SAP Ventures, a division of SAP AG, invested in LinkedIn.

Read LinkedIn press release: LinkedIn Raises $22.7 Million

SAP’s August 13th announcement of a collaborative effort with LinkedIn to help SAP SME channel partners tap the deep LinkedIn SAP talent pool (approximately 140,000 SAP consultants) is the first fruit borne of this investment.

Read SAP press release: SAP Connects Midmarket Channel Partners to LinkedIn to Support Recruiting Efforts

SAP channel partners working with companies that have 1,000 or less employees can use the LinkedIn Recruiter Basic Starter Package to search through LinkedIn’s database of 140,000 SAP consultants for those SAP professionals with the specific experience and skill sets they require.

The Recruiter Basic Starter Package is available to anyone and starts at $25,000 per year for three seats.

According to LinkedIn, SAP is the first software company to collaborate with LinkedIn on a job-recruitment offering, and SAP is offering the package at a "discounted" rate to more than 4,000 of the company’s SME channel partners.

Read InformationWeek article: LinkedIn Tool Searches For SAP Talent

Read InternetNews.com article: SAP Cozies Up to LinkedIn to Push Channel Jobs

Read PCWorld article: SAP Offers LinkedIn Recruitment Tools to Channel Partners

No stranger to social media, SAP was named one of the top-10 global brands for engaging social media in the recent Wetpaint/Altimeter Group’s ENGAGEMENT db report.

Read Wetpaint/Altimeter Group’s report: ENGAGEMENT db – Ranking the Top 100 Brands

SAP has led the way among global brands in leveraging social media and Web 2.0 technology and tools to keep its ever-growing ecosystem of customers and partners up to date on the latest SAP product enhancement and on the cutting edge of innovation.

Read Optimal SAP Advisor article: SAP’s Web 2.0 Smarts – Part One: Tapping Collective Intelligence to Educate

Read Optimal SAP Advisor article: SAP’s Web 2.0 Smarts -- Part Two: Tapping Collective Intelligence to Innovate

Continuing to invest and expand its involvement in social media, SAP recently announced the launch of several new community network offerings as well as enhancements to its social media tools. To date, the SAP Community Network has more than 1.7 million global members.

Read SAP press release: SAP Launches New Social Media Tools For SAP Community Network

While media may be fixated on SAP’s slow road to market with Business ByDesign, SAP channel partners are making significant headway in the SME on-demand space, providing hosted offerings of SAP Business All-in-One.

In May of this year, SAP channel partner Optimal Solutions was among the very first to offer SMEs a subscription-based model for buying, implementing, supporting and hosting SAP All-in-One and SAP BusinessObjects solutions.

Read Optimal Solutions press release: Optimal Solutions Announces Subscription-Based Model for Buying, Implementing and Supporting SAP Solutions

Read eWeek article: Optimal Solutions Integration Unveils Subscription SAP Business All-In-One Solution

SAP recently announced traction of on-demand All-in-One among its global SME customers.

Read SAP press release: More Customers Adopting Hosted SAP® Business All-in-One Solutions from Certified SAP Partners

Some 78 percent of SAP's 89,000 worldwide customers fall into the small to medium-size (SME) business category. SAP has more than 68,000 small and midsize customers using its SME solutions. Of these, approximately 46,500 customers are from channel partners.

SAP Business One solution is for small companies only (less than 100 employees).

SAP’s on-demand Business ByDesign offering is for companies with 100 to 500 employees and is presently in use by only 90 customers.

For companies with up to 2,500 employees, SAP offers the SAP Business All-in-One solution.

Clearly, SAP Business All-in-One has the greatest penetration of all of SAP’s SME solutions.

So which SAP SME solution will play the greatest role in SAP’s SME on-demand strategy?

Do the math.
 

SAP is the leading business software provider in every industry and solution segment with 32.8% share among core enterprise application vendors.

Read SAP Fact Sheet: SAP Facts and Fiqures  

According to a recent report by Gartner, SAP is at the top of the Customer Relationship (CRM) market, a market segment that, according to Gartner, grew 12.5 percent during 2008, increasing to $9.15 billion.

Read InternetNews.com article: SAP Keeps Lead in CRM as Market, Rivals Grow

SAP also ranks number one in Supply Chain Management (SCM) according to AMR Research. AMR reports that the SCM market topped $6.68 billion in 2008, a 4% increase over 2007.

Read Modern Materials Handling article: Top 20 SCM Software Suppliers, 2009

So how is it that, through good times and bad times, SAP sustains across-the-board leadership?

While there is no one silver-bullet answer to this rather large question, all answers must include examination of SAP's rigorous, laser-like focus on data management, analysis and distribution.

By providing the best tools for extracting, profiling, cleansing and integrating data from SAP and non-SAP sources, SAP ensures that reliable data is fed downstream to BI, CRM, ERP, and SCM applications, among other core business applications.

Read eWeek article: SAP Enhances Its Information Management Portfolio

Ironclad predictions about acquisitions in today’s topsy-turvy enterprise technology market are best left to accredited prophets. Just the same, bullish comments by SAP CEO Leo Apotheker on his company’s $7B acquisition war chest have many pundits predicting future SAP buys.

In early June, Bloomberg reported that Leo Apotheker told the French daily Le Figaro that SAP could spend as much as $7B on acquisitions.

Read Barron's article: SAP Says it Could Spend Up To $7 Billion on Acquisitions

Later in June, the German news agency Welt am Sonntag reported that SAP is in preliminary talks about an acquisition in the neighborhood of $2.1B.

Read Barron's article: SAP: In Talks on Large Acquisitions?

Apotheker is quoted in a recent Wall Street Journal blog as being "open to acquisitions." Regarding SAP's future growth, Apotheker lays bare the greatest difference between him and his predecessor Henning Kagerman: "“Henning has an infinite amount of patience,” he says. “I do not.”

Read Wall Street Journal blog post: SAP to Stick to Software, Says CEO

According to a leaked document, SAP plans to double its current revenue over the next five years.

Read Global CIO blog post: SAP Looking At 35% Margins And Doubled Revenue By 2014

Collectively, these juicy tidbits of information are prompting predictions on possible SAP acquisitions by many industry pundits. Moreover, many pundits are speculating on larger buys -- a departure from SAP's established practice of smaller 'tuck-in' acquisitions.

JMP Securities analyst Patrick Walravens singles out Tibco and Software AG as candidates because both of these companies, according to Walravens, bolster SAP Process Integrator, a component of the company’s NetWeaver middleware suite.

Industry blogger Dennis Howlett does a good job at laying out the rationale for SAP to acquire TIBCO and/or Software AG. Howlett also throws enterprise content management vendor OpenText into the mix.

Read ZDNet blog post: What should SAP do with its $5 Billion War Chest?

As is always the case when a tech company makes noise about possible acquisitions, inverse rumors  arise. Namely, that said tech company is itself an acquisition target. In the case of SAP, age-old rumors of a possible acquisition by Microsoft surfaced but were quickly dispelled by Microsoft CEO Steve Ballmer.

Read Reuters article: SAP Aqcuisition a 'Random Rumor," Says Microsoft

Since SAP VP John Wookey’s announcement on June 9th regarding SAP’s stepped-up SaaS strategy, there has been no shortage of speculation, misinformation and sensationalism in the news reporting on the why, what, how and when of SAP’s plan.

For more on this, and for some helpful and accurate reporting that is balanced and objective -- what reputable journalism is supposed to be -- check out post by Bob Evans on his Global CIO Blog.

Read Bob Evans' Global CIO Blog Post: SAP Turns To SaaS 'To Avoid Extinction,' Says BusinessWeek'

For more accurate reporting on SAP's On-demand plan, see roundup below of news articles compliled by the Optimal SAP News Desk.

In a keynote presentation at the OnDemand Europe conference in Amsterdam yesterday, SAP executive VP John Wookey made clear SAP's commitment to on-demand applications: “On demand is the next stage in the evolution of application development [… ] It is absolutely essential from SAP’s perspective that we embrace this change.”

In the days, weeks, and months ahead, much will be made of Wookey's address. There no-doubt will be a great mish-mash of fact, speculation, fawning and bashing. The Optimal SAP Advisor editorial team will do our best to serve as your one-stop resource for all breaking news and commentary relating to SAP's latest initiative to advance the on-demand cause. Check back frequently as this post will be updated regularly.

The story of SAP's expanded on-demand strategy breaks...

While direct reporting of Wookey's address first broke with a post by ZDnet blogger Phil Wainewright, Wall Street Journal enterprise technology blogger Ben Worthen and Financial Times reporter Richard Waters both wrote pieces one day prior to the OnDemand Europe conference. All three articles present interesting and unique high-level perspectives on SAP's latest major announcement pertaining to on-demand applications.

Read WSJ blog post by Ben Worthen: SAP to Make Online Push

Read Financial Times article by Richard Waters: SAP Reshapes Online Strategy

Read ZDnet blog post by Phil Wainewright: Wookey: SAP's Future is On-demand

Setting the table with a bit of background on SAP's on-demand play...

Most are familiar with SAP's Business ByDemand offering, the company's first major foray into the on-demand space loudly announced in 2007 and targeted sharply at the low end of the SME space. SAP made some pretty bold claims on the future of BBD:

• BBD will generate $1 B in annual revenue by 2010
• SAP will rack up more than 1,000 BBD customers by 2008 and more than 10,000 customers by 2010
  
• Market potential for BBD is $15 B
• SAP co-CEO Kagarmann on BBD: "the most important announcement of my career"

SAP's BBD launch hit a few snags -- the more serious of which revolve around devising a profitable business model for the fledgling product. Today, SAP has 80 BBD customers and has pushed full market rollout to sometime in 2010 - 2011, with SAP co-founder Hasso Plattner stating that "a market-ready [BBD] product will become available within two years."

Rummors of BBD death, however, have been greatly exaggerated. According to Jeff Stiles, Senior Vice President of SME Marketing, "SAP is 100 percent, unequivocally committed to bringing Business byDesign to market for the long haul." Moreover, during his 2009 SAPPHIRE keynote address, SAP co-CEO Leo Apotheker said he was there to "kill a rumor" about the death of BBD, and invited attendees to check out the BBD demo at SAP's booth.

Read Michael Krigsman's ZDNet blog post: Understanding SAP's Business ByDesign SaaS Strategy

Read InformationWeek article: Inside SAP's Idled Business ByDesign Suite

Read InformationWeek article: SAP Braces for Change

Read Rob Preston's Global CIO blog oost: SAP's Apotheker Holds Forth

Stay tuned for our next post: Opening eyes wide shut -- BBD is just one piece of SAP's broader on-demand play... 

"See Your Way Clear" was the theme for SAPPHIRE 2009, and SAP clearly sees changes ahead in how the company and its partners will deliver and support SAP solutions. One striking example of this change is Optimal Solutions' FlexChoice Advantage offering, a first-of-its kind subscription-based pricing and delivery model for providing SAP Business All-in-One qualified partner solutions to SMEs across North America and Canada.

Read eWeek Channel Insider article: Optimal Unveils Subscription SAP for SMEs

Read press release from Optimal Solutions Integration, Inc.: Optimal Solutions Announces Subscription-Based Model for Buying, Implementing and Supporting SAP Solutions

Read "Times are Changing' post below for more on how times are changing in the SAP world!

One of the major changes for SAP widely discussed at SAPPHIRE is the pending appointment of Leo Apotheker as SAP's sole CEO. During his keynote address, Apotheker touched on the theme of change frequently, underscoring the need for SAP to be a more agile, responsive and customer-centric company. Signs of change are present in SAP's newly launched Business Objects Explorer, a solution that allows business users to easily search extensive databases for vital information using natural language. Another recent and significant example of change is SAP's willingness to work closely with customers to prove the value of its across-the-board 22%-of-license cost for maintenance. SAP and SUGEN have established Value Key Performance Indicators for SAP Enterprise Support to ensure that the value delivered by Enterprise Support aligns with the needs and expectations of SAP customers. Specifically, an independent party will monitor 100 Enterprise Support test customers, and SAP will implement its 22% price tag for support only if this study reveals a 30% improvement in critical areas such as total cost of ownership. Change indeed. No other large enterprise applications vendor (i.e., Oracle charges 22% for maintenance) is willing to validate its support offering in such an objective manner.

Change is also present on the SAP SME front. During SAPPHIRE, Optimal Solutions announced FlexChoice Advantage, a new, highly flexible subscription-based pricing and delivery model that makes it easy and affordable for midsize companies to implement and quickly realize the benefits of running their business on SAP solutions. Optimal's FlexChoice Advantage provides SMEs the option of fixed monthly payments over 3, 5 or 7-year contracts that cover SAP licensing, maintenance, implementation, hardware, hosting, and support. To date, Optimal Solutions is the only vendor offing a subscription-based model for pricing and delivery of SAP All-in-One qualified partner solutions.

Read InformationWeek article: SAP Braces for Change

Read press release from Optimal Solutions Integration, Inc.: Optimal Solutions Announces Subscription-Based Model for Buying, Implementing and Supporting SAP Solutions

Soon after launching FinanceOne, a qualified SAP Business All-in-One partner solution for midsize companies that provides built-in, preconfigured financial planning, reporting and governance capabilities, Optimal Solutions notched a major customer win in Cano Petroleum, an independent Texas-based energy producer with properties throughout the mid-continent region of the United States.

Optimal announced the Cano win at SAPPHIRE 2009

Read press release from Optimal Solutions: Cano Petroleum Selects OPTIMIZE FinanceOne for Finance and Controlling from Optimal Solutions

Corporate finance has never been more challenging. In addition to traditional duties like financial planning, reporting, and governance, CFOs and financial managers are now being tasked with far more strategic responsibilities. Join Optimal Solutions and Ben Daitch, SVP & CFO of Cano Petroleum , a leading oil and gas producer, for an informative webinar hosted by Business Finance Magazine to discuss how Cano is leveraging OPTIMIZE FinanceOne from Optimal Solutions to streamline finance operations and drive growth despite the current economic turbulence.

When: May 19, 2009  2:00 EST

Webinar available for download: STREAMLINE FINANCE OPERATIONS AND DRIVE GROWTH IN A CHALLENGING ECONOMY

Attending educational sessions currently holds the top SAPPHIRE 2009 agenda spot, racking up 38% of votes cast in an informal poll conducted by Optimal SAP Advisor. Evaluating an SAP vendor service or solution ranks a close second with 25% of votes. Demoing an SAP solution, attending a keynote session and taking in a Don Henley concert, rank 3rd, 4th, and 5th, respectively.

The SAP Advisor SAPPHIRE 2009 Top Agenda Item 'Quick Poll' will stay open through Friday, May 8.

Be sure to cast your vote if you haven't already. And be sure to visit Optimal Solutions at SAPPHIRE 2009: Booth#344!

SAPPHIRE 2009, aptly themed “See Your Way Clear,” is sure to be one of the more work-intensive conferences ever as SAP customers keep agendas clearly focused on learning new, meaningful ways SAP can help their organization pull through today’s tough economy and capitalize on immediate market opportunities.

See SAPPHIRE 2009 'Quick Poll' to the right to vote for your top SAPPHIRE 2009 agenda item.

Be sure to visit Optimal Solutions at SAPPHIRE 2009: Booth#344

Sam Sliman, president for Optimal Solutions Integration, is busy building his SAPPHIRE 2009 schedule. Part Two of Sam’s article “Survive Commoditization and Capitalize on Change” will run in a post-SAPPHIRE installment of Optimal SAP Advisor (as soon as Sam catches his breath ;).

Read article by Sam Sliman: Survive Commoditization and Capitalize on Change – Part One

Read article by Sam Sliman, President, Optimal Solutions Integration, Inc.: SAP's Role in the Economic Upturn - Part Three  

Read article by Sam Sliman, President, Optimal Solutions Integration, Inc.: SAP's Role in the Economic Upturn - Part Two

Read article by Sam Sliman, President, Optimal Solutions Integration, Inc.: SAP's Role in the Economic Upturn - Part One

In this three-part article, Sam Sliman shares his best bets on what the top three SAP spending trends might be in 2009. Sam's first pick was SAP upgrades. He spread his second wager among SAP projects in the areas of consolidation, GRC and BI. Closing out Sam's trifecta for SAP spending in 2009 is accelerated adoption of SAP among small businesses and midsize enterprises (SMEs).

Read article by Sam Sliman, President for Optimal Solutions Integration, Inc . SAP 2009 Spend Trend Trifecta - Part Three

In this three-part article, Sam Sliman shares his best bets on what the top three SAP spending trends might be in 2009. Sam's first pick -- SAP upgrades -- was covered in Part One . Sam spread his second wager among cost-reducing, efficiency-driving SAP projects in the areas of consolidation, GRC and BI.

Read article by Sam Sliman, President for Optimal Solutions Integration, Inc.: SAP 2009 Spend Trend Trifecta - Part Two

According to a recent report by financial analyst firm UBS, European and US businesses expect to cut technology spending by 2% in 2009. While bad news for most tech vendors, the same study forecasts spending on SAP to increase this year. So what are the top three trends that will drive SAP spending in 2009? In this three-part article, Sam Sliman, president for Optimal Solutions Integration, shares his best bets for the SAP 2009 Spend Trend Trifecta.

Read article by Sam Sliman, President of Optimal Solutions Integration: SAP 2009 Spend Trend Trifecta - Part One 

Do not underestimate the importance of professionalism in the SAP consulting industry, particularly during tough economic times.

While strong technical skills will always be at the top of the list for SAP consultants, professional skills rank a close second, and can often be the differentiator among equally qualified SAP consultants.

Read article by Valeri Wickersham, HR Director for SAP Consulting firm Optimal Solutions Integration: Professionalism Helps SAP Consultants Stand Out

Part One of this two-part article by Rory Doherty, editirial director of Optimal SAP Advisor, examined SAP’s use of Web 2.0 tools and technologies to harness the power of collective intelligence to educate its expansive ecosystem of customers and partners on the many changes and opportunities that accompany the transition to SAP 6.0 and the SOA-ready NetWeaver platform. In Part Two of “SAP’s Web 2.0 Smarts” Doherty examines how SAP is leveraging Web 2.0 collective intelligence to help its customers spike productivity and drive business process innovation.

Read article by Rory Doherty, editorial director of Optimal SAP Advisor: SAP's Web 2.0 Smarts: Part Two -- Tapping Collective Intelligence to Innovate

SAP, the world’s largest provider of enterprise applications, is utilizing cutting-edge Web 2.0 tools and techniques to accomplish a Herculean task at a time when the stakes -- from an economic perspective -- have never been higher.

Read article by Rory Doherty, editorial director, Optimal SAP Advisor: SAP's Web 2.0 Smarts, Part One - Tapping Collective Intelligence to Educate the Market