SAP will introduce a new hire Tuesday. However, the real news isn’t the man but his title: executive vice president of large enterprise on demand.
How serious is SAP about online software?
That title is tantalizing because it implies a major strategic shift for SAP that the company hasn’t so much as hinted at previously. SAP makes software that helps businesses with tasks like balancing the general ledger, tracking inventory, and managing customer contacts. It’s the epitome of traditional software: Companies pay millions of dollars upfront, and then spend months or years installing the stuff.
Lately, most of the buzz in the tech industry has been around online, or on demand, software. Proponents say that businesses will eventually choose to buy software that they access over the Internet because it doesn’t require them to buy tech equipment or keep staff on hand to install the software. For companies like SAP that sell traditional software, the online variety presents a dilemma: Either ignore it and hope customers continue to buy traditional software, or develop online software and compete with yourself.
SAP’s previous foray into online software, Business ByDesign, hasn’t exactly gone well. The company said it wouldn’t sell it to businesses with more than 500 employees, has cut the amount it intends to invest in the software, and its sales force has basically tabled it.
John Wookey, the former Oracle exec SAP hired—before the company’s hiring freeze went into effect, we’re told—won’t be in charge of Business ByDesign. Instead his mandate is more bold: design SAP’s strategy for developing and selling online-software strategy for its core customers. We don’t know much more than that, unfortunately, but the fact that SAP created the position, and did so at this high a level, speaks for itself.