- SAP made enormous claims around Leonardo. Several years after, these claims are so false.
- Find out the current state of Leonardo.
SAP Leonardo is part of a broad issue at SAP regarding failures with new product introductions.
October 2018: The Stock Drops 14%
Immediately after 3Q 2018 regulatory filing with the SEC, SAP stock dropped 13.83%. SAP SE (NYSE:SAP) declined 9.36% since February 2018 and is downtrending. It has underperformed the S&P 500 by 9.36%.
A year-long downtrend is too long to be seasonal.
In SAP’s case, analysts and investors see a problem with SAP’s product vision. Brinker Capital decreased its stake in SAP by 34.5%. SAP’s innovation centers around the “intelligent enterprise”. This innovation was expected to drive growth from products like S/4 HANA, Leonardo IOT and AI, and the SAP cloud platform (SCP).
- None of these product lines, despite massive marketing spend, gained material market traction over the past 2 years.
- On the opening day of the SAP UK and Ireland user group conference in Birmingham on November 2017, a survey revealed that only 2% of SAP’s customers intend to use the much-trumpeted Leonardo artificial intelligence (AI) initiative, and 43% were unaware of its
- Leonardo kept changing its primary scope starting as as an IoT platform then morphing into predictive analytics and then AI.
Is Leonardo for IoT or for analyzing Videos with Machine Learning? Is it all just the same thing?
January 2019: 4,400 Employee Layoff
The announcement said SAP will replace 4,400 employees with people who have artificial intelligence and machine learning skills. In other words, SAP is going to hire thousands of data scientists. That is all lot of hiring for a product area where SAP has a negligible footprint. Companies double down when they see signs of demand growth, not the other way around.
February 2019: SAP Announces Departure of Bernd Leukert
According to his LinkedIn profile, Leukert heads strategic innovation initiatives at SAP. His role is driving the development of new growth opportunities for SAP in the area of the Internet of Things (IoT) and Industrie 4.0. He was the Godfather of SAP Leonardo and the concept of the intelligent enterprise.
Bernd gets into Leonardo 8 minutes into this video. Notice that Leonardo is connected to everything: Big Data, machine learning, and SCP. Nothing Bernd said about Leonardo turned out to be true.
February 2019: SAP Announce Partnership with Microsoft Azure IOT
At the MWC, SAP announced that SAP Leonardo will leverage services from Azure IoT, including Azure IoT Hub and Azure IoT Edge, to provide access to secure connectivity at scale, powerful device management functionality, and industry-leading edge computing support.
Connecting the Dots
SAP is resetting its product strategy. Leukert left SAP with immediate effect and Michael Kleinemeier got an extension of his contract until 2020. S/4 real adoption is estimated at around 5% and HEC is one foot out of the door. Leonardo is a complete flop and is no longer mentioned even by SAP’s mighty marketing machine. The layoffs are a global cull of underperforming teams across S/4HANA, HEC, SCP, and Leonardo product groups. SAP has decided to use Microsoft Azure for IOT instead of pursuing further Leonardo development.
SAP Leonardo almost replaced HANA and S/4HANA as the primary marketing tentpole for SAP. Leonardo was the star of the 2017 SAPPHIRE conference but notably diminished in stature by the 2018 SAPPHIRE conference.
We predicted that Leonardo would fail back in May of 2017 in Why Does Leonardo Seem so Fake? We also critiqued SAP consulting firms who blindly promoted Leonardo when we questioned How Accurate Was Bluefin Solutions on Leonardo?
The marketing noise around Leonardo died. Now, it looks like the product that never was.
Financial Bias Disclosure
Neither this article nor any other article on the Brightwork website is paid for by a software vendor, including Oracle, SAP or their competitors. As part of our commitment to publishing independent, unbiased research; no paid media placements, commissions or incentives of any nature are allowed.
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