Tag: SAP

SAP customers not evolving

Human evolution

Human evolution

The maker of expensive management software which no one is really sure what it does, SAP, is discovering that its customers are not so keen on getting the latest and greatest versions.

SAP appears to be struggling to get users to move to its S/4HANA offering with many quite happy sticking with their existing ERP products from the vendor.

Research from Rimini Street has found that the overwhelming number of respondents – 89 percent – were going to stick with existing products because they continue to meet business needs.

When asked if they would move to S/4HANA the reasons for not making the effort included struggling to find a strong business case, unclear ROI and fears of high migration and reimplementation costs.

Rimini Street CEO Seth Ravin said that the survey highlights that CIOs and IT decision makers prefer to maximize the value of their current robust SAP ERP system that more than meets their business requirements, rather than advancing to a new platform that is still in development with no current business case to support a full reimplementation.

“It also illustrates how they are pursuing innovation strategies, such as hybrid IT, to help their business gain competitive advantage now, without having to wait indefinitely for meaningful new innovations and capabilities from SAP,” he said.

The hybrid IT approach is also one of the reasons why many customers are quite happy to use software that has largely been designed for on-premise use.

Salesforce demands Demandware

Salesforce_Logo_2009Cloudy Salesforce has written a $2.8 billion cheque for Demandware whose software is used by businesses to run e-commerce websites.

The move is part of a cunning plan to open a new front as Salesforce wants to take more market share from traditional software providers such as Oracle and SAP who offer cloud-based e-commerce services.

The e-commerce market has been growing  as retailers expand their online presence, boosting demand for software that helps manage functions such as payment processing and inventory management.

Salesforce appears to have paid rather a lot for the company to see off any of the other outfits which were bidding for the company. Word on the street is that Adobe and Oracle were also snuffling around.

Demandware has not been doing that well. Its shares, which have fallen about 21 percent in the past year. Its customers include Lands’ End, L’Oreal (because it is worth it) and Marks and Sparks. It has  reported sales growth of more than 30 percent for the last 10 quarters.

While Salesforce has beaten up everyone in the CRM war, it still needs to stay in front.  To do that it needs lots of products which is something it lacks.

Global spending on digital commerce platforms is expected to grow over 14 percent annually to about $8.5 billion by 2020, Salesforce.

The deal, slated to close in Salesforce’s second quarter ending July, is expected to increase the company’s 2017 revenue by about $100 million-$120 million.

Salesforce had forecast fiscal 2017 revenue of $8.16 billion-$8.20 billion in May.


EU gives its cloud to BT, IBM, Accenture and Atos

Eu-flag-vector-material2The European Commission has announced BT, IBM, Accenture and Atos will get most of the contracts to supply its new cloud services.

Contracts were broken out into three “lots,” covering a private cloud setup, public cloud setup, and platform-as-a-service, for which it will pay $38.5 million.
The whole lot will be platformed by Telecom Italia which is a bit unfortunate. That outfit is under resourced and its mobile arm TIM just adopted the iChing hexagram for “standing still” as its logo.waiting

It is unusual that Microsoft, Oracle, SAP, Amazon and none of the other big cloud outfits managed to get their paws on the EU’s clouds.

The Commission said that all the systems will be physically located within the European Union, the Commission noted, “to be compliant with EU data handling requirements” basically it means that the US will not be able to steal it.

According to the announcement, the contract will “enable the Commission to follow the ceaseless pace of today’s technological race.”

The EU hopes that use of cloud services will help it come up with future improvements to how it works, such as using “Big Data.”

The private cloud service will provide computing and storage facilities through a private network link connected to the EC’s data centres, and will be hosted by a single provider. The public cloud infrastructure will be run over the public internet. And the public platform-as-a-service will include both operating systems and database services run over the cloud.

The first cloud services should appear this year.

Panama president linked to SAP bribery case

indexThe former president of Panama, Ricardo Martinelli might have been involved in a bribery scheme that helped SAP to sell millions of dollars in software to Panama.

According to Reuters, being SAP’s business partner is just one of the crimes that the former president faces at the moment.  He says they are all politically motivated.

The main case was against Vicente Garcia, a former executive at SAP, the German soutfit which makes esoteric business software which no -one is really sure what it does.

Garcia, 65, was sentenced to 22 months in prison on December 16 by a US court in the Northern District of California, after pleading guilty to conspiring to bribe Panamanian officials to secure contracts for SAP software.

Judge Charles R. Breyer’s told Garcia to avoid contact with “any co-conspirator in this case,” naming Martinelli and six others, as a condition of his future supervised release.

Martinelli has not been charged with any wrongdoing in Garcia’s case in fact his brief claims the former president had never met Garcia.

SAP fired Garcia in April 2014 and is cooperating in the ongoing investigation. The US Securities and Exchange Commission said Garcia “circumvented SAP’s internal controls” to fund the bribe payments.

Garcia admitted using bribe payments to secure a software contract to update technology for Panama’s social security agency. The scheme, which ran from 2009 until 2013, won an SAP reseller a $14.5 million contract. SAP itself received around $2.1 million in software sales thanks to the bribes, according to court records.


Salesforce does better than expected

Salesforce_Logo_2009Salesforce has surprised the cocaine nose jobs of Wall Street by raising its full-year revenue forecast for the fourth time after reporting a quarterly adjusted profit above market expectations.

As you might expect, the rise in money has been driven by higher demand for its web-based sales and marketing software.

San Francisco-based Salesforce has been benefiting as more businesses choose cheaper and easier cloud software services. The company provides its services online, with no software directly installed on PCs.

The company’s adjusted operating margin expanded to 13.3 percent in the third quarter ended October 31 from 11.3 percent a year earlier.

Salesforce raised its revenue forecast for the year ending January 2016 to $6.64 billion-$6.65 billion from $6.60 billion-$6.63 billion.

Revenue rose 23.7 percent to $1.71 billion in the third quarter. Analysts on average had expected $1.70 billion.

Salesforce has been slowly killing off Oracle and SAP in the customer relationship management software market.

The company’s net loss narrowed to $25.2 million from $38.9 million a year earlier.


Moose-sized SAP project mothballed in Alaska

mooseAlaskan natives are a little restless about a huge SAP project which is supposed to have been running since 2011.

The project, which said enterprise resource planning (ERP) software implementation, when they bought it was supposed to be state of the art. While it is unlikely that anyone really knew what the software did, they did know that it cost a lot of moose antlers to buy.

Now the City of Anchorage, Alaska has put the project on hold again and this time, its future is far from certain.

The project is tens of millions of dollars over budget and years behind schedule and the local council is not happy about putting more money into it.

At the time of its launch, the project was intended to replace Anchorage’s legacy

PeopleSoft system with ERP software from SAP. It was originally planned to cost $9.8 million and to go live at the start of 2013.

However toward the end of last year officials began an independent review of the project, after it missed its second “go-live” date. It has spent $35 million so far and budgeted another $11 million for the project, but a further $20 million to $30 million is expected to be required to complete it.

The council is looking at proceeding with a scaled-down version, or scrapping the lot.

SAP software is used successfully by tens of thousands of government agencies, including the U.S. Department of Agriculture, financial departments in the states of Florida, Pennsylvania, and South Carolina, and counties such as Howard County, Maryland, SAP said.

No one is sure quite how the project got to a 600 percent overrun, but it appears that the Alaskans did not have anyone who really understood the project or how it all worked.  But then they did buy SAP and anyone who knows what its business software does is worth their weight in HP printer ink and is as rare as a left wing politician in the US.

SAP boss alleged to have bribed Panama officials

PanamaHats1902The maker of expensive esoteric software, which no one knows what it truly does, has been involved in a conspiracy to bribe Panamanian officials in a bid to secure government contracts, it’s been alleged.

Vicente Eduardo Garcia was SAP’s vice president of global and strategic accounts for Latin America from February 2008 until April 2014, when he was fired. With the plea, he admitted to participating in a scheme to violate the Foreign Corrupt Practices Act, which prohibits bribing foreign officials to obtain business.

He will be sentenced in December 16 before Senior District Court Judge Charles Breyer of the Northern District of California.

It seems that the company is denying it knew anything about the scheme and seems to be blaming Garcia.

SAP said it will continue to cooperate with the Department of Justice and the Securities and Exchange Commission on the investigation, a spokesman said.

Indeed there is some evidence that Garcia “circumvented SAP’s internal controls, falsified the company’s books and records, and made false statements to SAP in order to lower the price of SAP software to fund the bribery and kickback scheme.”

In 2009 SAP hoped to obtain a multimillion-dollar contract to provide a Panamanian state agency with a technology upgrade package.

Garcia admitted that he conspired with others, including advisors and consultants to SAP, to pay bribes, disguised as sham contracts and false invoices, to Panamanian government officials.

SAP’s Panamanian channel partner secured the contract for $14.5 million, which included $2.1 million in SAP licences. Not long after, the Panamanian government awarded the channel partner additional contracts involving SAP products, the DoJ said.

The SEC said that it had settled with Garcia for enabling SAP to sell software to a partner in Panama at discounts of up to 82 percent while also receiving kickbacks himself.

Garcia has agreed to pay $85,965, the total amount of kickbacks he received, plus prejudgment interest, amounting to a total of $92,395.

SAP does well in the cheap cloud market

cloudbustThe maker of expensive, esoteric business software, which no-one is really sure what it does, is making a lot of dosh flogging cheap cloud products.

SAP reported mixed quarterly results as revenues topped expectations due to a surge in newer, lower-margin cloud software.

This should have been good but it stuffed up company margins pushing down profit to the very low end of forecasts.

SAP said second-quarter operating profit, excluding special items,rose 13 percent to $1.50 billion, which was the low end of what the cocaine nose jobs of Wall Street expected.

Europe’s largest software maker reported total revenue of $5.38 billion, up 20 percent.

Operating margin dropped to 28 percent from 29.8 percent a year ago. The decline reflected increased investments in SAP’s newer cloud-based software services, where revenues from new sales come later in the form of subscription payments.

SAP is taking on Oracle, IBM and Microsoft to boost Internet-based software sales and fend off pure cloud-based rivals Salesforce.com, Workday and, less directly, industry pacesetter Amazon.com’s web unit.

Salesforce.com in May raised its revenue forecast for the full year, after the cloud software company reported a profit for the first time in seven quarters.

SAP’s cloud subscription and support revenue from continuing operations jumped 129 percent. On the same basis, revenues from its mainstay software license business rose 13 percent. Without currency effects, software licenses grew 3 percent.


Microsoft bids for Salesforce

Microsoft campusMicrosoft is looking at buying Salesforce.

The cloud software provider has been approached by another, unknown, buyer, and told Microsoft, which put in a bid of its own.

Salesforce, which has a market value of almost $50 billion, is working with two investment banks to determine a response to approaches, two of the people said.

It has the option of telling any buyer to go forth and multiply or working out a sale.

Microsoft isn’t in talks with Salesforce, and no deal is going to be quick.  Microsoft  has said that it might compete for Salesforce if it was for sale.

Salesforce shares spiked and were immediately halted for volatility on the news

Salesforce offers a leading position in CRM, software, as well as cloud computing — the delivery of business software and services via the Internet.

Microsoft sells its own customer management software, but lags behind Salesforce.

Microsoft last week set a goal of increasing annual revenue from its commercial cloud business to about $20 billion.

Oracle Chief Executive Officer Safra Catz said  an acquisition of Salesforce would create disruption in the software market.

She declined to comment on whether Oracle was interested in buying Salesforce.

Salesforce was involved in strategic-alliance discussions with SAP last year and SAP has confirmed it is not thinking about a Salesforce bid.

SAP founder dies

Klaus-TschiraThe bloke who created an empire based on really expensive management software, which no one was quite sure what it did, has died.

Klaus Tschira, one of the co-founders of European software giant SAP, has died unexpectedly at the age of 74, his foundation said.

Tschira,  a trained physicist, left IBM to found SAP in 1972 together with four IBM colleagues: Hasso Plattner, who is still the company’s chairman, Dietmar Hopp, Hans-Werner Hector and Claus Wellenreuther.

SAP began by developing software that could process data in real time rather than overnight in batches, and went public in 1988.

It is now Europe’s biggest technology company, with revenues of $18.9 billion and had more than 74,000 employees in 2014.

He also founded the Klaus Tschira Foundation (KTF) in 1995 as a non-profit organisation to support projects in natural and computer sciences and mathematics.

Tschira, a billionaire, stepped down from SAP’s supervisory board in 2007. He is survived by his wife Gerda Tschira and two sons.

HP gathers legal Lynch Mob

The lynch-mob-21war of words between HP and the former owner of Autonomy, Michael Lynch has ended up in a court battle in the UK.

The maker of expensive printer ink has lodged a claim in London against Lynch and a former colleague for damages of about $5.1 billion over their management of Autonomy, the company it bought in 2011.

Lynch will counter sue, seeking $149 million for loss and damage caused by HP’s accusations.
Autonomy was supposed to be the $11.1 billion centrepiece of a move to becoming a more SAP style software organisation. But a year later HP wrote off three-quarters of the British company’s value, accusing Lynch and his colleagues of financial mismanagement.

HP filed a claim against Lynch, the co-founder of Autonomy, and Autonomy’s former finance director Sushovan Hussain in the Chancery Division of London’s High Court on Monday, alleging they engaged in fraudulent activities while executives at Autonomy.

“The lawsuit seeks damages from them of approximately $5.1 billion,” the spokeswoman added.
Lynch, speaking on behalf of Autonomy’s former management, has consistently denied any impropriety, saying the loss in value of the company was down to HP’s mismanagement.

HP’s case might have been weakened by the fact that Britain’s Serious Fraud Office (SFO) said there was not enough evidence to secure a conviction of Autonomy’s former executives.

Salesforce guns for SAP’s European crown

Salesforce logoSalesforce.com wants to overtake SAP in terms of sales on the German company’s home market in the coming years.

The outfit which has been making a killing on the cloud wants to get into SAP’s form of expensive esoteric business software line.

Salesforce’s Europe chief Joachim Schreiner told the German magazine Wirtschafts Woche that Salesforce wanted to become the biggest software company in Germany by sales.

He did not set a date for his conquest of Germany, but instead made it clear that Salesforce needed Lebensraum in the Fatherland.

Salesforce was growing at a rate of more than 30 percent per year in Europe, adding Germany was one of its strongest markets on the continent.

SAP last year generated sales of $19.2 billion, of which close to 2.6 billion were in Germany. Salesforce had revenues of $5.4 billion, of which close to $1 billion were in Europe. It does not break out figures for the German market.


SAP slashes jobs

sapbeerSoftware giant SAP said it will cut around three percent of its employees worldwide but added that it would create different jobs as it struggles to get up to speed on cloud computing.

The job cuts include SAP offering some employees early retirement, and won’t make forced redundancies in its European offices.

SAP has around 75,000 workers worldwide.

The company is struggling to compete with up to date cloud based companies including Workday and Salesforce and is working to beat the competition.

Reuters said that SAP will create new job opportunities in the cloud business, the database Hana and the expenses software Concur – it paid over $7 billion for Concur in 2014.

Microsoft reveals cloud roadmap

Clouds in Oxford: pic Mike MageeSoftware company Microsoft said it has introduced a web site that reveals details of its roadmap for its Cloud Platform.
Microsoft has been aiming to move to the cloud as fast as it can and now offers cloud services including Azure, Intone, Visual Studio and server platforms including Windows Server, SQL Server.  It also has covered system appliance offerings including Analytics and Stor System.
Takeshi Numoto, corporate vice president of the cloud and enterprise marketing group at Microsoft said the company wanted to be transparent about its cloud strategy.
He said that the web site, which you can find here, is intended to show what technology it’s developing and what’s coming in the next few months.
It also will include products in public preview.
Microsoft isn’t the only company struggling to re-invent itself as a cloud player.  Others in the game include SAP, Oracle and IBM.
Analysts predict that over the next few years the majority of enterprise IT users will use cloud computing and services more and more.


SAP wants its software on the cloud

cloud1SAP, the maker of expensive esoteric business software which no one really understand wants to deliver its product onto the cloud.

This means you can be completely baffled by the product, without having to store it on your local servers.

Luka Mucic told the Euro am Sonntag business weekly that contract cloud work becomes profitable over time and in the long term; they can definitely become more profitable than classic licence sales.

SAP said last week its push to deliver cloud-based products via the internet would “dampen profitability” until at least 2018, even if it attempts to blow dry its profitability with a hair-dryer or makes it stand in the sun for a few hours.

This is because unlike the packaged software SAP has been selling for decades, for which clients pay a immediate licence fee, cloud-based software is generally paid for by subscription over time, but most of the costs for the software provider are upfront.

Mucic said contracts were loss making for the first year of operation.

SAP agreed in September to buy cloud-based travel and expenses software maker Concur for $7.3 billion in cash, its biggest takeover ever, but about what you can expect to pay for a single SAP business consultant.

Mucic said SAP might add another, smaller tranche, perhaps as soon as the first half of this year, but added that otherwise the company had no need for further capital. He did not say why SAP needed the money.