CRN Interview: Shai Agassi, SAP

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Shai Agassi, the SAP executive board member responsible for product design and marketing, gave his perspective on SAP’s channel approach, the software giant’s latest moves and the competitive landscape in an interview with CRN Industry Editor Barbara Darrow at the Sapphire 2006 conference in Orlando, Fla. SAP used the annual event--this year combined with the Americas SAP Users Group conference--to announce the general availability of MySAP 2005 ERP, a new business-intelligence accelerator and an updated plan to offer "hybrid" on-premise and hosted CRM based on the same code foundation.

CRN: What’s your reaction to Sun Microsystems’ news that they're open-sourcing Java?

AGASSI: Before I comment on anything, I would like to see what the announcement is and understand it. We are a Java licensee and are happy with the license and have a relationship with Sun around that. If they change the nature of that license model, we would study it. I still don't understand it, so I don't want to comment.

CRN: What are you seeing among SAP’s enterprise accounts in terms of Linux adoption?

AGASSI: We definitely see Linux as the fastest-growing operating system platform for our application server and database server. But obviously, it's the fastest-growing from a very small point. It's not going to go away. It's going to be a significant play, but we also have a significant market share of customers coming in on Windows. My personal feeling is that Linux servers are coming in at the expense of other Unix-based servers. Windows is still strong. Unix, in the aggregate, is staying at about the same spot.

CRN: Some VARs and integrators say they get mixed messages from SAP. Even some original BusinessOne partners say they ran into too much conflict with SAP sales. Can you address this perception that SAP is not very partner-friendly?

AGASSI: You mentioned small and large. Here's some interesting data. If you talk to some partners--we have Accenture, IBM, EDS, Cap [Gemini]--they're driving business in the billions of dollars around SAP. They probably influence business in the tens of billions of dollars for us. I would love to get a partner who would drive tens of billions of dollars in my business, [but] where I would also influence tens of millions in their business. So far, my definition of partner-friendliness is somebody that I drive 100 times what they influence for me, that I drive to them.

We're the most partner-friendly company in the world. We've been there. We've created tremendous opportunity for everybody who works around us. We have a great symbiotic relationship [with partners]. It's not that we don't need them or they don't need us. We both need each other and provide each other with tremendous value.

And we both focus on customers. Now, can you please everybody at all times? Absolutely not. Is there a great opportunity around SAP? Yes, absolutely.

We don't design our business without going through every single channel at all times. When Leo [Apotheker, SAP’s executive board member charged with sales] thinks about taking a product to market, he doesn't say, ‘Let's keep this product only direct sales.’ In some cases they have the expertise, in some cases they don’t. Not every partner has the same skill set, expertise and sales skills for every product.

CRN: Well, with Duet [SAP’s project with Microsoft to make SAP’s back end accessible via Office front ends], that was an interesting contrast. SAP said it will not put Duet through its partners. Meanwhile, Microsoft is putting it through its partners. The same with your new business-intelligence appliance [developed with Intel, Hewlett-Packard and IBM]. It’s unclear whose channels or if anyone's channels are selling it or if it's going direct.

AGASSI: When you have an HP or IBM SKU, every HP partner can sell it. Every IBM partner can sell it.

CRN: So you're saying that SAP partners can sell this appliance and Duet?

AGASSI: I've never blocked anyone from buying a server from HP. Why would I block them from buying one I actually worked on?

CRN: So SAP partners can sell it?

AGASSI: Sure, I'd love that.

CRN: In terms of the Microsoft relationships, clearly, BusinessOne competes with Microsoft Business Solutions [MBS] in the midmarket. When do you start worrying about Microsoft coming into SAP’s enterprise business?

AGASSI: What does Microsoft say?

CRN: It's kind of changing. At first, they said they were not an enterprise play. Now they're saying they'll come into the enterprise through subsidiaries, departments and divisions.

AGASSI: To really do complete enterprise systems, you need to fail first. You need to learn. There are not a lot of enterprises today that are willing to give you the luxury of failing at their expense. We started in 1992 with R/3 and had the luxury of going to Chevron and Hershey. No one remembers that we actually are extremely successful at Hershey. What they remember is the failure. We have learned from those failures, whereas others have not even reached that point. By making Hershey successful, by making Chevron successful without failure, by making these companies scale and grow, the ecosystem of knowledge around that success is SAP. But to get there, you have to try and fail at first.

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