SAP vs. Salesforce.com -- The Great Debate
By Rory Doherty
Editorial Director, Optimal Solutions Integration, Inc.
Much has been made of the Plattner/Benioff -- ‘Future of Enterprise Software’ debate held recently at the Computer History Museum in Mountain View, California, with the preponderance of commentary focusing on declaring a winner. Because of this, the greater importance of what was revealed through this debate has been for the most part overlooked.
What was perhaps the most noteworthy aspect of this debate occurs beyond Benioff’s chest-pounding bravado and on-demand proselytizing, and beyond Plattner’s obvious displeasure with being prodded by his impetuous younger opponent -- both of which were reported on aplenty.
To be sure, the ‘future of enterprise software’ question was not definitively answered in this debate, but through the often heated exchanges of these two industry luminaries something of significant import was made manifest, though it was not what most sought -- a decided victor, be it in terms of Plattner vs. Benioff , SAP vs. Salesforce.com, or on-premise vs. on-demand.
It was the subtle yet salient shaping or framing (in German Fragestellung) of the ‘future of enterprise software’ question that Plattner orchestrated by asserting three words crucial to any meaningful exploration-past, present or future -of the enterprise software industry: integration, customization and commoditization.
Plattner spoke the first two words directly and repeatedly to Benioff in his questioning of Salesforce.com’s ability to do all that Benioff claimed it could. The third word, commoditization, though not spoken aloud by Plattner, resonated just as meaningfully through its unavoidable inference should Salesforce.com not be able to deliver on the integration and customization fronts.
Without an inherent capacity for integration, a software’s value-however great it might initially be is essentially limited, finite. More to the point, an application’s inability to integrate ultimately relegates it to becoming yet another costly siloed repository of data to be maintained.
Inflexibility in regard to customization is another death knell for enterprise software. Sell the same cookie-cutter, non-customizable software to every company on the planet and while your coffers will initially overflow, over time Nicholas Carr’s polemic prediction inevitably comes to pass-and your software becomes a non-differentiating IT commodity.
From its inception in 1972 to the present, SAP has developed and brought to market a comprehensive suite of integrated, highly customizable on-premise enterprise applications upon which many of the world’s largest global companies run their entire business. Over the past four years SAP has successfully transitioned its entire suite of business applications to the enterprise SOA-enabled NetWeaver platform. During roughly the same time period, SAP dedicated 2,500 developers to build Business ByDesign, the company’s new on-demand product for midsized companies.
Steering through all of this product development -- on premise as well as on-demand -- is strict adherence to the enterprise software mandates of integration and customization. Whether it’s the 1,000 and growing enterprise services SAP has delivered for creating a virtually infinite number of SOA-based composite applications, or the 2,100 interfaces SAP plans to provide with Business ByDesign -- integration and customization factor heavily in SAP’s present and future product development initiatives.
On the other hand we have Salesforce.com, basically an on-demand CRM application striving mightily (and a tad hubristically) to morph into the de facto on-demand delivery platform for a comprehensive offering of on-demand enterprise applications to be consumed by businesses of all sizes.
Salesforce.com’s success to date is impressive. The company’s revenue is nearing $1 billion. Most importantly, Benioff and Salesforce.com deserve genuine kudos for validating and advancing the model for on-demand enterprise software.
Yet Despite Benioff’s rhetoric of revolutionary change, the relative inability of his company to do just that, to break out of the CRM niche and through the midmarket barrier, attests to the formidable challenge before him.
At one point in the debate Benioff excitedly states: "I want to figure out how to get SAP to build on our platform," a comment intended as a dig at SAP’s Business ByDesign product, but one which, in effect, evidenced Benioff’s mounting fear and frustration over his platform’s potential limitations.
The comment also came across as somewhat of a desperate sales pitch to SAP, belying Benioff’s thunderous claim that Salesforce.com is “at the verge of a breakthrough, and it is as big as the software-as-a-service business has been.” Clearly, Benioff and Salesforce.com will need considerable outside help to realize this ambitious vision.
Truth be told, with the exception of a tiny sliver of potentially competing on-demand offerings, these two individuals and their respective companies operate in entirely different worlds, universes even. (A forced David vs. Goliath analogy wouldn’t come close to conveying the vast differences in both personal accomplishments and respective company sizes/statures.)
Another telling moment in the debate came when Plattner offered Benioff a bit of sage advice, warning the upstart not to “overestimate your platform.” And to this we might add Plattner’s unspoken thought: particularly if you’re flirting with commoditization because your product falls short in the vital areas of integration and customization.
