Global CIO: SAP Transformed: From Stuffy ERP To Real-Time iPad Analytics

1) A return to growth. The company's growing again, and growing at pretty heady rates. Said McDermott in a phone conversation yesterday, "What's amazing is our growth has resulted in a truly balanced approach, with 25% of our fourth-quarter revenue coming from deals greater than" $6.8 million. "Our largest deal was in Brazil, we had lots of big transactions in Asia Pacific, Europe rebounded strongly in the quarter, and the U.S. continues to be strong, notably with a lot of buy-in for innovation." Wells Fargo lead technology analyst Jason Maynard offered this analysis: "SAP reported a solid Q4 with revenue in line with its preview and EPS ahead of our estimate. Guidance for 2011 is solid, but in line with consensus estimates," added Maynard, who said he's raising his 2011 targets for SAP revenue, earnings, and stock-price target.

2) On-demand is contributing. McDermott said SAP's goal is to have 1,000 Business ByDesign customers in 2011, adding that he believes "we'll probably be halfway there by Sapphire," which is the company's global customer and partner conference scheduled for May 15-18. McDermott was excited by the range of objectives for which customers are adopting the ByDesign platform: "Some are doing on-demand CRM as a starter kit, others want to run their entire business on ByDesign, and others want to run it as a component for special on-demand applications within the enterprise."

3) SAP's Mobile Position. Asked about the blending of the iPad into enterprise deployments, McDermott ratcheted up his typical high-energy staccato delivery even more in a way that reflected the subject he was discussing: the need for corporate speed. "In my own company, we now have about 3,000iPads in use, and we're also gonna have RIM tablets as well and people throughout the organization want to unchain their apps from their desktops and they're dying to go mobile because it's the new reality of connected enterprises from the boardroom to the shop floor and out to the customer reps on the front line," he said. "Every CEO I talk to wants to connect via mobility to increase the clock speed of their organizations and increase the pace and effectiveness of communications, so that's a very easy conversation for us to have about the value of what we can bring with our software on these mobile devices. This is the year when enterprises are really going to get serious about getting unwired."

4) Hana And Real-Time Analytics. (Hana is SAP's new optimized system and stands for High-performance Analytic Appliance.) Throughout McDermott's comments on the earnings call and during the phone conversation he had with me and my colleague Doug Henschen (see Doug's news story on SAP's earnings here), he mentioned only occasionally the product category that made SAP one of the most successful and powerful software companies in the world: ERP. And while those enterprise-backbone tools remain vital for businesses, it was clear from McDermott's comments that those products have now become the foundations for customer value, and that future gains in that value for SAP customers will come through its new generation of products: mobility, Hana, ByDesign, and in-memory technology. In fact, Hana could well become one of the industry's most-visible success stories for in-memory technology in 2011, as more than 50 customers are now "co-innovating" with SAP in using Hana to extract meaning and insight and value from stupendous volumes of data. In the case of one SAP customer, a global CPG company can now run extensive queries against Hana involving 460 billion customer records and get answers back in less than a minute.

5) The Power of Real-Time Business. "Real-time business means no more management by inspection," said McDermott, "and that means no more managers going around inspecting workers by asking what they're doing. When you can truly work in real time with the types of analytical tools we can deliver, then you can democratize information and make sure that everyone in the organization can get the information they need when they need it, and then you can have everyone focused on moving the productivity needle and exceeding customer expectations and getting things done and adding value, instead of trying to figure out where to find the information that will help them decide what they should be doing." And at the heart of SAP's strategy for delivering that type of real-time capability is the 3-part combination of its Business Objects products, which McDermott referred to broadly as "BI 4.0—the entire suite of BI products and apps"; the mobility technologies and expertise Sybase brought to SAP in its acquisition last year; and the game-changing real-time capabilities of Hana and future products based on SAP's in-memory technology.

McDermott said he believes that no other company—not IBM, not "our number two" (that would be Oracle), and not anyone else—can do in 2011 what SAP can do: "Whether you currently operate on-premise or on-cloud or on-device, we can unwire your enterprise while maintaining your integrity and security and we can orchestrate all those heterogeneous devices without interruption. Nobody else—nobody—can do that," he said.

"SAP is wide awake, we're ready to grow, we've put out some strong guidance for the coming year, and with the products and people we have, we're ready to live up to that."

RECOMMENDED READING: Global CIO: SAP's Striking Turnaround Triggered By Customer-Centric Strategy Global CIO: Inside SAP: 2,500 iPads Are Only The Beginning Global CIO: Top 10 Most Influential IT Vendors, Part 2 (Microsoft And HP?) Global CIO: SAP's Sweeping Turnaround: Exclusive Co-CEO Interview Global CIO: The CEO Of The Year Is SAP's Bill McDermott Global CIO: How SAP Is Leading The Mobile-Enterprise Revolution Global CIO: SAP's Last Chance: It's The Customers, Stupid! Global CIO: An Open Letter To SAP Chairman Hasso Plattner Global CIO: Larry Ellison Declares War On IBM And SAP Global CIO: SAP's McDermott Slaps Back At Oracle And Refocuses On Customers Global CIO: Inside SAP: 10 Factors Behind Its Dramatic Turnaround Global CIO: SAP: The Top 10 Reasons We'll Beat Oracle In Applications Global CIO: SAP's Hasso Plattner On Databases And Larry Ellison Global CIO: An Open Letter To HP CEO Leo Apotheker Global CIO: SAP Stunner: ERP Deal Boosts Customer Profit $100M Per Year Global CIO: As HP And Oracle Brawl, IBM And SAP Snatch Customers Global CIO: SAP Confronts The Real-Time Culture Wars Global CIO: Are HP And SAP Perfect Match Or Train Wreck? Global CIO: SAP Promises Business Value Over Products: Can It Deliver? Bob Evans is senior VP and director of InformationWeek's Global CIO unit.

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