Our company wants to reach 1 billion users by 2015 says SAP's Bill McDermott the time interviewed by author, management guru and venture capitalist Geoff Moore at a Churchill Club event Wednesday night in Palo Alto.He added "We're giving the customers what they want...", when asked how SAP is doing so well in the midst of a financial crisis.
Here are some of the highlights from the conversation and about SAP Giant Mr.Bill McDermott Powered by forbes. The below points copied from Forbes.com for SAP Techno users:
- More notes that SAP is thriving at a time of disruptive change – unlike many other leading technology companies.
- At Moore’s prompting, McDermott starts by talking about his background. He was born in New York, and grew up on Long Island. At age 16, he bought a delicatessen for $5,500 in notes. He said he had to convince kids to walk past the 7-11 and come into his store. He also gave them credit when no one else would. And he did deliveries for seniors who did not like to leave home. McDermott also set up a separate room with video games, and split the cash with the video game company; in a few months they paid off the store.
- Eventually he sold the store and bought his parents a beach house.
- His first real job was at Xerox. He was there 17 years. Then Gartner and Siebel. He’s been at SAP since 2002.
- In 2010, he and Jim Snabe became co-CEOs of SAP; Moore notes that the co-CEO arrangement is rare. But McDermott says the co-CEO approach has a long history at SAP. McDermott says what makes it work is trust.
- He says their mission was to give the company a mission and a strategy. Moore asked what bets they decided to make.
- McDermott says he got a call from Hasso Plattner, who asked him to be the co-CEO of the company. So he asked who the co- would be. He called up Jim. He was flying to Hawaii that day for a sales recognition event. He says he had a long conversation with Snabe from outside a hotel on the big island of Hawaii, standing near a dumpster surrounded by a swarm of bees.
- Anyway, he says there was a lack of connection between R&D and the value chain. The company needed leadership, a vision, a strategy, he says. McDermott says they spent two weeks recasting the company’s strategy.
- McDermott says they try to focus on “keeping the main thing the main thing.” At SAP that’s being the market leader in business software and analytics. They targeted “innovation without disruption.” He says they could have tried a different strategy.
- They saw three turbo engine. Mobility. Mobile was the new desktop. There are mobile devices than toothbrushes. He says they saw what was going on, the “i-economy and all that.” He knew people needed to manage and secure those devices.
- The second thing is they knew cloud was going to be big, not just in virtualizing and private clouds; companies did not want to buy hardware. They want solutions that might have hardware attached to it. Solution bundled with a service is what you need to get their attention. The cloud as a force we cared a lot about, he says. What we learned is that small and mid-sized companies don’t have lots of users; thought we had to focus on larger companies.
- We also had a conversation around software-as-a-service, and the only asset they had was Business By Design. “If I take off my shirt, I have so many stretch marks,” he says.
- He also says they knew they had to go after database in technology; he knew HANA would be the innovation of the last 30 years. High Performance Application Network Appliance (and a city on Maui). The idea was to create a way to Google your own data in main memory, to create much faster decision making cycle. 100,000x faster than any other technology in the world, he says.
- So cloud, mobile, database technology in HANA led to early moves in the strategy.
- In less than a year, HANA will be close to a $500 million market. Banking industry is a customer for cash management.
- Within the first 100 days, they bought Sybase. He notes that they had a partnership with Sybase to move CRM application to the iPad. McDermott says SAP called Apple to order a few thousand iPads. Steve Jobs called him and said, what are you doing. The same night, they called John Chen, the CEO of Sybase; he says they agreed to do a deal in 16 days.
- On the company’s SuccessFactors acquisition; he says they wanted to add talent management. Now they’ve bought Ariba, which has a real time marketplace to connect buyers and sellers on a live platform. With HANA, that gives you a real-time trading network for every industry, he says.
- McDermott says companies depend on SAP more than ever to innovate; CEOs look into my eye and say I need you to help me improve my business.
- The company wants to reach 1 billion users by 2015.
- SAP will invest $2 billion in China by 2015; to do that they need a complex ecosystem with partners.
- They will hire 6,000 people this year out of universities; some of them at SAP, some placed with partners.
- There are 61,000 people at SAP right now.
- Moore says that change management was the heaviest burden for all of McDermott’s predecessors, that it was deeply anchored in its heritage; but he adds that he does not see that at all in McDermott. He says the results actually show the company is changing.
- McDermott responds that none of us is as smart as all of us. He says you need to use them and get them in the game. Have managers that make the news, not report the news. I despite bureaucracy, he says. People in management need to be on the front lines, he says. With HANA, he says, everyone has the same set of facts. It’s all in HANA, all in real time. He says they decided they will run the company on their own software. Even in the boardroom, he says…technology can change the name. You need a culture focused on the right things.
- On how they changed the culture: He says people will do the good work if you have the right strategy. If you give them a bad strategy, they will dig all night and the ditch will just get deeper. You also have to have a bias toward innovation. If you aren’t going to innovate, go home. And some of that innovation has to be through M&A. He says you need to nail it in 60-90-120 days if you are going to make changes. Everybody starts moving in a solid direction in terms of strategy.
- On what students need to have coming out of school: STEM – sciences, technology, engineering and math – and also designers. (Very interesting answer; SAP needs designers…)
- On growth strategy, he says they are primarily an organic growth company; you can’t grow only via M&A. (Which is not to say they’re finished doing acquisitions, of course.)
- Our relationship with Oracle is “a complex one,” he says. Heh. McDermott says it is not in SAP’s interest in spending a lot of time worrying about what Oracle and others are doing. He says they are a step or two behind where SAP is right now. He says they don’t do that locker room talk anymore. “As a company, we’re in a whole new place.” He says they “warmly would welcome them using HANA.”
- Who are the future competitors? Amazon is a partner. Would love to have Facebook and Google as a partner. All could compete with part of the SAP business model. You have to change your attitude and be more accepting of other people’s business models, as opposed to taking a military stance, “we will crush you.” We’d like to partner with Facebook and Google, and we look forward to that.
- What’s one user from Salesforce.com? User experience. He says they are really going for “user force,” making beautiful applications, and provide a service, to customize something just the way you want it. Give it to you your way. Design things that are pleasing to the user. That is something we have learned.
- One lesson from IBM: They really do keep the main thing the main thing, and then innovate around it. They have a big software business, and we do, but a different type. They have kept their main culture and values for 100 years. But they changed when they had to. And they really understand an ecosystem approach. And they are very good at account management.
Thanks
Forbes - The above points impressed me personally as well(USERS: Like SAP
Techno please keep watching Forbes also)
