Liveblogging SAP Investor Symposium (Part II)...

I had high hopes for the next two presentations, but was left wanting on both fronts. Up first, was Udo Waibel with an update on Duet. I've followed Duet with great interest but hoped to hear more today about the progress made since I last did a deep dive on the SAP/Microsoft collaboration.

• Duet: Product Demo and Update [pdf]

Waibel did a workmanlike job of articulating the opportunity for SAP (i.e., extending the reach of SAP to the tens of millions of productivity workers who have little reason to leave their Microsoft apps for most work processes) but lacked presence on-stage and had too few answers in the Q&A to indicate he's a driving force on the app. Personally I would've rather heard from Dennis Moore, who I know from firsthand experience is passionate and articulate about Duet.

Takeaways from Waibel

• The Good
  • Duet is launching two value packs in the coming months
    • Three new scenarios
      • Travel Management
      • Sales Management
      • Demand Planning
    • Multi-language support
    • Basic customization and configuration tools
  • Duet 1.5 planned for summer 2007
    • Two new scenarios
      • Purchasing management
      • Recruitment management
    • Advanced customization and configuration
  • To date...100 customers and 200,000 licenses
• The Bad
  • Fuzzy math 1.0
    
    • Why does a product launched seven months ago with a reported 200,000 licenses only have a handful of named accounts live? During the presentation Waibel made the point of how quickly Duet can be implemented, which belies the lack of live, reference accounts
  • Fuzzy math 2.0
    • Waibel was evasive on pricing, refusing to comment on Duet pricing. He was not alone in his evasiveness as several colleagues told me they were similarly stonewalled by other executives during the day. Again, if Duet is already in the market with several hundred thousand licenses, how is pricing a big secret? Particularly when Microsoft has been quoting a $125/seat price point since the day Duet was launched?
  • Versioning
    • A customer must be both an SAP and Microsoft customer to utilize Duet; but what versions must they be running?
      • Several times in the presentation Office 2007 support was listed as "coming soon"
      • What versions of SAP does a customer need to run? I've been told by several sources that you must be on R/3 4.6.3 or later
      • I've also been told that SAP is not using Duet internally. If this is true, why aren't they?

Next, came an update on SAP's Analytics strategy by Sanjay Poonen. Sanjay gave an energetic and polished presentation.

• Analytics and Performance Management Update [pdf]

Sanjay broke SAP's BI strategy into three components:

• Simplicity
• Relevance
• Agility

Simplicity = embedding BI functionality into existing UI environments; tailoring BI functionality to meet the sophistication of each user; creating central monitoring and minimal administration requirements by the IT organization

Relevance = providing a set of analytics applications (xApps) including a pre-built library in addition to tools for the creation of custom apps and reports.

Innovation = Leveraging the SAP BI Accelerator program to improve "go live" times and lower TCO.

Other takeaways from Poonen

• Poonen articulated a view of the bifurcation of BI...with traditional tools (ETL, basic querying) as becoming commoditized while analytical applications will provide the value. Obviously this is a self-serving view, but probably doesn't make SAP's BI partners feel very warm and fuzzy
• While SAP has primarily focused on organic growth, Poonen acknowledged that SAP will need to "own" many aspects of the BI roadmap; some of which will be easier to acquire than to build out internally

Up next...Doug Merritt on Governance and Compliance, Shai Agassi on the Technology Roadmap...

Note: At the time of this writing I, and/or funds I maintain discretionary control over, maintained long equity positions in MSFT and SAP. We also may, at times, carry derivative options on underlying positions as a hedge.

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