JONATHAN BECHER: Because we’re a technology company, we can experiment with a lot of technology SAP [already] has to solve marketing problems, and not just digital marketing problems. A lot of applications we’ve launched into market to sell to our customers – not all of them, but some of them – were incubated inside of us. We operate in 100 countries and in 40-plus languages, and even though we look B2B, we have a lot of B2C attributes as well. I don’t think we’ve ever released the number of employees in marketing, but I think it’s probably ok to say north of a thousand. It’s a pretty big group.
How do you differentiate from what Adobe, IBM, Salesforce.com and Oracle are doing with digital marketing tech?
Some vendors have an automation focus where it’s “figure out what your processes are and then make them less manual and more augmented.” That’s OK, but that’s not our primary axis. Then some marketers and vendors would have a primary data focus of, “build a big data warehouse and store every click and transaction,” which is valid too, but has not been our way of thinking about it. For us, the experience is at the center. I know that’s become a buzz phrase, but I’ve gone on the record in that I don’t think there’s a real, fundamental difference between B2B and B2C anymore.
How do you feel about Oracle, which has a B2B platform in Eloqua and a B2C platform in Responsys?
It would be inappropriate for me to guess what Oracle’s strategy is for acquiring those two assets. I will say that one of the trends I see here in the Valley and around the world is people are starting to worry about the dichotomy between best of breed and integrated. There are a lot of siloed marketing technologies and I think that’s caused us to not really have a universal view of how the customer behaves. And the current generation doesn’t want a separate thing to do in digital and a separate thing to do in-store. They all need a common backbone, so rather than come at the problem from “apps in,” and you probably know who I mean, we’ve been trying to think about it as backbone out.
Are you an applications or a platform business?
We can build apps until the cows come home, and you can quote me on that. But when we do acquisitions, we go a very different direction. The most visible one you’ve seen us do is hybris, when we said “the false dichotomy between traditional commerce and ecommerce has to go away.” Hybris’ part was, “there should be no silos.” Nobody wants to be told, “Sorry, that transaction you did was with another division.” The hybris strategy was “create that backbone that treats the customer universally and then build on top for the Web or what you need for the call center, etc.,” but it’s got to have a unified backbone. [Ed: As with hybris, SAP says the "platform" approach is critical to its business, vis-à-vis HANA.]
Speaking of best of breed vs. integrated, SAP is now reselling the Adobe Marketing Cloud. What do both sides get out of the deal?
I was front and center for that agreement and am a large Adobe user here inside of SAP as well. As a company, we’re not a big believer in vendor lock-in. I know that may go against the historical perception you have of us, but that’s where we’ve grown up in the last decade. We built this framework and of course I’d love it if people only used our apps, our contact intelligence, social media, analytics, display, CRM, apps, but the reality is we live in a heterogeneous world. And while there are some customers that will mostly use us, there will be some customers that use some of us and some of something else. We have a “build-buy-partner” strategy and we try to be the agnostic backbone that is open to everybody. We have a very good relationship with Adobe, and when you think of Adobe apps, primarily Experience Manager and Analytics, what used to be called Omniture, it’s plugging in to the HANA backbone. But over time, it could be their entire suite as well. We do the same thing with other companies.
So is this more of a technology or services play?
There’s a technology relationship where they’re going to leverage the HANA platform so that we can do things like universal identification and things like “never have to trade aggregates.” One of the things you do in analytics all the time is storing a summary about who visited a website recently, [comparing that] to who went in the store [and computing] that on the fly with HANA. [Adobe has] stuff in their portfolio that we don’t have, mainly CQ5 and Omniture [Ed: content management and web analytics, respectively]. We can provide that directly to our customers and they can have one hand to shake or if you prefer the slightly more sinister approach to that, one throat to choke…so they can come directly to SAP and know that we sell those.
Why not Oracle?
We [would love for Oracle] to have a similar relationship with what we have with Adobe, where they take Eloqua and import it to HANA and take advantage of it, and you could quote me on this. We’re open to that. We’re agnostic. And I think we’ve said that a number of times onstage before.
I think that would probably be hard for [Oracle] to do because it would probably suggest perhaps their current platform isn’t sufficient. But if they want to do it, we’d be interested.
Is SAP going to build its own marketing cloud or will it mostly partner? Last fall, you launched with Accenture a Marketing Performance Solution for CMOs.
We organize [marketing tech] into three categories. First is those that allow a marketer to capitalize on data-driven insights. The second category is [delivering] engaging customer experiences. The third category is [increasing] the speed and agility of your marketing operations. And we have more than a dozen applications that fit in those three categories, [such as a] classic Audience Discovery and Targeting, a real-time segmentation engine.
Who, in a prospect’s organization, does SAP sell to?
Part of the challenge is we aren’t historically known as a marketing company. Our background for 42 years is ERP, so we’re much more familiar to the head of HR and finance and, frankly, even the CEO than the marketer. The challenge we have is to reset people’s expectations to get them to realize, “Ah, I can bet my technology on SAP and some of it will be homegrown, some of it will be through partnerships, and some if it we may acquire,” but SAP can be the end-to-end partner for the CMO. I will admit as the CMO of SAP, that story is not as well known yet as I would like.
What is that story?
[SAP] can’t just [offer] technology for the marketer, for the finance exec, for HR. That’s how most vendors are thinking about it. [SAP] has to be technology that enables the brand’s customers or the company’s customers to have better interactions with them. That’s why I think the heart has to be the experience and not the silo that happens to be where you’re organized. Yesterday, I sat for lunch with a fellow CMO of a huge B2C brand and we both lamented on, should we even have sales and marketing jobs? Are we part of the silo problem with our own customers? Should we sit around and think about the processes our customers want to engage with instead of [thinking about it in terms of sales or marketing]. You know how it is. We want to try and build our software so it works that way.
Will SAP ever be relevant to a media buyer on Madison Avenue?
At the risk of showing my hand on strategy too much, I think the answer is absolutely yes. The lines between marketing, sales and technology are somewhat blurring and we, SAP, plan to be a big part of what advertising feels like. I have to be a little careful because we’re a publicly traded company, but there is a reason why we’re taking a more public persona in New York City. Let’s be fair, will it change overnight? I’m not suggesting everybody on Madison Avenue will run and be employed by SAP next week or even next year, but I think it will increasingly be a destination they will consider.
If you’re acquisitive, which companies do you want to buy?
Compared to some, we’re a modestly acquisitive company. We just announced one in the last couple of weeks, a company called Fieldglass, which is a very nice complement to our Ariba and SuccessFactors portfolio, which were acquisitions as well. And we will probably continue to do acquisitions at probably the same pace as we have over the last couple of years. Whether we do them in the marketing space, you know I cannot comment on that. Though, we are pretty pleased with assets we have in house, so we don’t have any huge sense of urgency right now.
Correction: An earlier version of the story noted a "built by partner" strategy. The correct phrase is "build-buy-partner" strategy.