“Frenemies With Benefits”: A Deeper Look into Microsoft, SAP and Duet

This week my interview in an ASUG News article written by Thomas Wailgum sparked a number of comments and messages on Twitter.  I took to the SAP Community Network (SCN) to provide a follow-on point of view regarding the intricacies of the SAP – Microsoft relationship as a partner and influencer to both global software makers, and what current market dynamics mean for both partners and customers.

Can … er … business partners be software friends? (Credit: Funny or Die)

There can be no question that Microsoft is the dominant player in office management application software.  I cited in my recent SCN post to this very Duet Enterprise page that 3/4 of all large enterprise customers either use Microsoft SharePoint or plan to do so in the future.  That’s a heady number.  So what drives SharePoint adoption without the exclusion of other web-based portal environments like SAP?  In short: SharePoint is easy to use, secure to store large amounts of documents in repository fashion, with helpful plug-ins to native Microsoft platforms (like Microsoft Project) that drive the need to get work done.  And we all use them.  Even if we are working on an enterprise risk management (ERM) initiative using SAP RM10, or a project plan using SAP Project Schedule (PS), we have the smart ability to output to Microsoft platform tools.  Even SAP’s Planning and Consolidation tool (formerly known as BusinessObjects BPC) runs natively on a Microsoft Excel environment as a ribbon plug-in.  The integration is quick, intuitive, painless and in a native environment that everyone has and knows how to use.

SAP’s major offensive push is to create a low-cost of entry user adoption scenario for large enterprise customers who already have Microsoft SharePoint as a user interface investment well established in their user groups with the need to access SAP Business Suite and LOB solutions.  This reduces user ramp-up and training costs (no need to learn SAP GUI or web-based environments) and provides incremental sales in SAP base user licenses (BULs). “Power users” who have more administrative and higher governance roles inside of customer organizations will likely still see the need to purchase full user licenses (FULs) however this is an incremental expense for some rather than a high expense for all.

Another key point is that SAP needs a defensive strategy as well for Microsoft, particularly as its flagship AX offerings start to move up-market and Business Suite – with clearly defined and easy to implement All-in-One (A1) solutions – move down-market and out to subsidiaries.  In a recent conversation with a Microsoft partner, it was clear that their business plan with Microsoft would run in conflict with the opportunities to build new solutions bridging the platforms via Duet Enterprise.  This is not surprising – while customers can “menu select” how best to deliver business processes to their various user groups, partners need to be more deliberate in their go to market solution strategies.  The SAP and Microsoft alliance can be problematic for some Microsoft partners who are well-established in the small to mid-size business (SMB) and lower end of the large enterprise customers space.

Read my full SCN blog for my complete analysis.  Stay tuned for the upcoming SAP SAPPHIRE and ASUG Annual Conference in Orlando for more information on solutions based on the Duet Enterprise platform.

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Filed under Business Analytics, Change Management and Leadership, Information Technology, Innovation, Millennial Worker Shift, Operations, Strategy, Technology

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