Customer Relationship Management (CRM) is a mature market with a clear market leader in Salesforce. It has a bunch other enterprise players like Microsoft, Oracle and SAP vying for position. SAP decided to take another shot today when it released a new business products suite called SAP C/4HANA. (Ya, catchy I know.)
SAP C/4HANA pulls together several acquisitions from the last several years. It started in 2013 when it bought Hybris for around a billion dollars. That gave them a logistics tracking piece. Then last year it got Gigya for $350 million, giving them a way to track customer identity. This year it bought the final piece when it paid $2.4 billion for CallidusCloud for a configure, price quote (CPQ) piece.
SAP has taken these three pieces and packaged them together into a customer relationship management package. They see this term much more broadly than simply tracking a database of names and vital information on customers. They hope with these products to give their customers a way to provide consumer data protection, marketing, commerce, sales and customer service.
They see this approach as different, but it’s really more of what the other players are doing by packaging sales, service and marketing into a single platform. “The legacy CRM systems are all about sales; SAP C/4HANA is all about the consumer. We recognize that every part of a business needs to be focused on a single view of the consumer. When you connect all SAP applications together in an intelligent cloud suite, the demand chain directly fuels the behaviors of the supply chain,” CEO Bill McDermott said in a statement.
It’s interesting that McDermott goes after legacy CRM tools because his company has offered its share of them over the years, but its market share has been headed in the wrong direction. This new cloud-based package is designed to change that. If you can’t build it, you can buy it, and that’s what SAP has done here.
Brent Leary, owner at CRM Essentials, who has been watching this market for many years says that while SAP has a big back-office customer base in ERP, it’s going to be tough to pull customers back to SAP as a CRM provider. “I think their huge base of ERP customers provides them with an opportunity to begin making inroads, but it will be tough as mindshare for CRM/Customer Engagement has moved away from SAP,” he told TechCrunch.
He says that it will be important with this new product to find its niche in a defined market. “It will be imperative going forward for SAP find spots to “own” in the minds of corporate buyers in order to optimize their chances of success against their main competitors,” he said.
It’s obviously not going to be easy, but SAP has used its cash to buy some companies and give it another shot. Time will tell if it was money well spent.
By Ron Miller