SAP’s Orwellian Memory Hole: The Response to the 2025 SAP ECC Support Deadline Extension

Executive Summary

  • The response to the extension of the 2025 deadline has been that it was “not a surprise” even by those that just until recently state the 2025 deadline was solid.
  • This brings up the topic of the lack of accuracy in the SAP ecosystem.

Introduction

A number of people have commented that the extension of the 2025 ECC deadline was “no surprise.” This statement is, in many cases, genuine. However, there are also many cases where it is not genuine, and this is particularly true in the cases where individuals held to the previous deadline as if it was what was going to occur.

Many of these people are the same people who aggressively contradicted the Brightwork Research & Analysis estimates of the success that SAP has had with taking customers live with S/4HANA. Brightwork Research & Analysis has, by far, the lowest estimates of the number live S/4HANA instances.

Was It “No Surprise?”

In the previous article, SAP Reverses its Cynical 2025 ECC Support Deadline, where we analyzed the history of the ECC 2025 support deadline, we noted we could not find any IT media entity that had predicted the 2025 deadline was going to change.

If one quickly switches from being emphatic about “2025 is the deadline,” to it being nonplused or unmoved after the change is made by SAP. And furthermore, if that same person now accepts the new status quo, but without holding SAP accountable for what they said or why they said it, it appears something strange is occurring.

Something strange is occurring if you are continually being told that a constantly changing story makes sense and if there is a reticence by others to observe the inconsistencies. 

As I pointed out, the only purpose of the deadline was to be used as a burning platform to push companies to S/4HANA, and now that it is changed, to charge extra for support post-2025 as if the change is some gift to customers. 

The Consequence of Orwell’s Memory Hole

The SAP market is very similar to something called the Memory Hole in George Orwell’s book 1984. In “SAP Land,” everything that is the current policy is “as it has always been.” This is necessary to keep SAP from losing credibility as its strategy and statements bounce around like a ball inside a pinball machine.

Let us review the features of Orwell’s Memory Hole.

“The concept was first popularized by George Orwell’s dystopian novel Nineteen Eighty-Four, where the Party’s Ministry of Truth systematically re-created all potentially embarrassing historical documents, in effect, re-writing all of history to match the often-changing state propaganda. These changes were complete and undetectable.

Nineteen Eighty-Four’s protagonist Winston Smith, who works in the Ministry of Truth, is routinely assigned the task of revising old newspaper articles in order to serve the propaganda interests of the government. For example, Smith may be called to retroactively change a statement about food rationing to reflect new policies.” – Wikipedia

1984 is not a book that many institutions want people to read. This is because they want to keep using the tricks described in the book.

1984 is, of course, considered a classic work. However, it is neutered in its teaching by teachers providing the “context” that the techniques described in the book only apply to “evil totalitarian regimes” such as the Soviet Union. Orwell wrote an introduction to the book that stated that while the book does apply to those systems, much the same thing could be found in England in 1948 (when he was working on the book). That introduction was conveniently left out of the book by the publisher, and was only found many years later.

Why SAP Needs a Memory Hole

That is easy to answer.

SAP is continually changing its stories.

This is a constant feature of the SAP space. (first HANA will change civilization, then it is a development environment, now it is more of a background item. First, all HCM customers will move to SuccessFactors, then they will keep HCM, first, everything is about X and O data and survey software is the key to “empathy,” then it disappears, first Leonardo is an IoT platform, then it is a predictive analytics platform, then a machine learning platform, and then it is gone, and now it is on to a different topic)

SAP can pinball all over the place and in any direction, without commentary around SAP related to SAP saying..

“Hey wait that is inconsistent.”

..because whatever SAP says, well that becomes the new normal.

Remember that thing you thought you remembered about SAP? No, you don’t!

The SAP Ecosystem Memory Hole

SAP’s ecosystem reinforces the memory hole. It does this by repeating whatever SAP says and never pointing out the actual history of SAP. These are the sources relied upon by IT media for “information.” This is shown in the following quotation.

On the cost side, SI/consultants are urging customers to weigh the risks of resource constraints. iTelligence is typical of advice offered saying:

The longer you wait the higher the risk and cost to your organisation will be as the best resources become scarcer as the deadline approaches.

Even if your company decides not to adopt S/4HANA immediately, you still need to consider the changes imminent with S/4HANA and create your plan. – Diginomica

So iTelligence, which very obvious falsehoods published at its website, and which previously repeated what ended up being false information for five years (that 2025 was a firm deadline) now is quoted as a reliable source by Diginomica. iTelligence is allowed to re-present the same argument they have been making but proved to be wrong. What iTelligence is saying here is false. Due to the shortage of S/4HANA projects, the shortage of S/4HANA skills is more prevalent now, than it will be in the future. It is also not true that companies need to consider changes imminent with S/4HANA. This entire statement from iTelligence can be roughly translated into “hire us so we can implement S/4HANA for you.” It is not advice, it is sales copy. We have a better quote for iTelligence.

It goes like this.

Remember how we tried to use a fake support deadline to sheepdog you to S/4HANA so we could make money? Well we are now doing the same thing for this new deadline. We are not accountable for what we said before, and don’t expect to be held accountable for what we are saying now.

Living in SAP Land..or Oceania

All of this requires significant mental gymnastics on the part of SAP resources, just as it was for the citizens of Oceania in 1984, as is explained by a second important Orwellian concept called “doublethink.” 

Don’t Just Think…When You Can Doublethink

The novel explicitly shows people learning doublethink and Newspeak due to peer pressure and a desire to “fit in”, or gain status within the Party—to be seen as a loyal Party Member. In the novel, for someone to even recognize—let alone mention—any contradiction within the context of the Party line is akin to blasphemy, and could subject that person to disciplinary action and the instant social disapproval of fellow Party Members.

Earlier in the book, doublethink is explained as being able to control your memories,(emphasis added) to be able to manually forget something, then to forget about forgetting.(emphasis added)

In the case of workers at the Records Department in the Ministry of Truth, doublethink means being able to falsify public records, and then believe in the new history that they themselves have just rewritten. – Wikipedia

Does this last sentence sound familiar or vaguely reminiscent of something?

It should because that is the role filled by SAP marketing. As was covered in our analysis of the 2025 deadline extension, SAP even used the PR release to try to say that the extension of the 2025 deadline was related to how successful S/4HANA has become.

War is Peace

Issues with Consistency?

Let us imagine that any of us had a friend that said they were going to art school, then joining the monastery, going to chef school, becoming a dance instructor, and then planning to teach at the Top Gun school for fighter pilots.

Eventually, we would stop listening to that friend.

But not with SAP.

SAP can say anything, and millions of SAP consultants will engage in doublethink and immediately switch to the new framework pretending to forget the old framework, and agree that it is at has always been. IT media and IT analysts will bend reality to SAP’s will and to their reality. 

Conclusion

Whatever SAP says, it has always been that way. This is as true now as it has always been and will always be.

Long live Oceania and long live SAP.

The Necessity of Fact Checking

We ask a question that anyone working in enterprise software should ask.

Should decisions be made based on sales information from 100% financially biased parties like consulting firms, IT analysts, and vendors to companies that do not specialize in fact-checking?

If the answer is “No,” then perhaps there should be a change to the present approach to IT decision making.

In a market where inaccurate information is commonplace, our conclusion from our research is that software project problems and failures correlate to a lack of fact checking of the claims made by vendors and consulting firms. If you are worried that you don’t have the real story from your current sources, we offer the solution.

References

https://en.wikipedia.org/wiki/Political_commissar

https://www.scribd.com/article/414457668/Doublethink-Is-Stronger-Than-Orwell-Imagined

https://en.wikipedia.org/wiki/Nineteen_Eighty-Four

https://diginomica.com/fresh-color-sap-r3-ecc-transition-s4hana-post-2025

https://en.wikipedia.org/wiki/Memory_hole

See Our Other SAP Support Content

SAP Reverses its Cynical 2025 ECC Support Deadline

Executive Summary

  • Since SAP introduced S/4HANA, it stated it would stop supporting ECC by 2025.
  • SAP reversed this deadline, precisely as we predicted.

Introduction

Ever since, SAP announced the 2025 end of support for ECC and has been using this as a hammer against customers to get them to move to S/4HANA. This deadline was used along with a large amount of other false information about the technological benefits of S/4HANA, that have been thoroughly debunked here at Brightwork Research & Analysis.

The Official Statement on Feb 4th on The Change to the ECC Support Deadline

Here is the official change in the ECC support policy.

SAP will provide mainstream maintenance for core applications of SAP Business Suite 7 software*(ECC) until the end of 2027 followed by optional extended maintenance until the end of 2030. – SAP

This is how Co-CEO Christian Klein “spun” the announcement.

“Our customers show us that SAP S/4HANA is their future direction and that they expect a long-term commitment from SAP to this platform,” said Christian Klein, Co-CEO and Member of the Executive Board, SAP SE. “We know that our customers have deep business transformations underway using the unique capabilities of the solution. Our user groups confirm this. A recent survey from the Americas’ SAP Users’ Group did not show a single customer not planning to migrate to SAP S/4HANA. In addition, the German-Speaking User Group indicates in their lately published survey that customer investments in SAP S/4HANA are increasing significantly. In response to this and to our customers’ demand for choice, SAP will provide additional flexibility to fully embrace the groundbreaking opportunities of SAP S/4HANA that reflects the individual pace and complexity of our customers’ projects.” – SAP

This quote deflects from the main point of the announcement to make a false claim around the health of S/4HANA in the market, which has been a colossal failure for SAP, with many SAP consulting firms now decreasing their internal emphasis on S/4HANA.

Secondly, Christian references ASUG, which is not a research entity, and routinely publishes surveys without any supporting data as we cover in How Accurate Was ASUG on its S/4HANA Poll?

When we predicted that SAP would extend the 2025 support deadline, we predicted that they would justify it because of their love of customers. And this is precisely what happened when Thomas Saueressig of SAP commented.

SAP’s Newfound Interest in Choice?

After five years of telling customers that they had no choice and that they had to move to both S/4HANA and HANA (HANA is obligatory with S/4HANA as it only runs on HANA), SAP now changes course and becomes interested in choice. This is expressed in the following quotation from Thomas.

SAP is committed to our customers’ success and choice. Offering these maintenance periods is further delivering on transparency and trust. The significant growth in 2019 confirms our SAP S/4HANA strategy and demand.” – SAP

Why wasn’t SAP committed to trust and choice back when they were force-feeding S/4HANA into accounts with the fictitious 2025 deadline?

Like Christian, Thomas adds that S/4HANA, which is not in demand, is in demand. This change in support policy is yet another sign that S/4HANA’s usage and go-lives can’t support any claims regarding ending support for SAP, but of course, SAP spins it the exact opposite way.

A Deluge of False Information

The SAP announcement goes on to say the following, all of it incorrect.

SAP S/4HANA is the next-generation intelligent suite, enabling the move to a digital intelligent enterprise based on next-generation best practices and artificial intelligence–enabled automation. At the same time, it is paving the way to the cloud and hybrid architectures, driving a substantial level of landscape simplification and TCO reduction. Over 13,800 customers have already chosen SAP S/4HANA. – SAP

When we say this, we mean it. There is not a single assertion in this paragraph that is correct, and we have fact-checked all of them individually in separate previous articles.

SAP then sets its new claim at 13,800 customers, which is only customers that have a license. Something that is never admitted by SAP is that many of these customers never paid for the S/4HANA license they own, or they were coerced to purchase S/4HANA as part of a settlement for an indirect access claim as we cover in the article How Indirect Access Drove S/4HANA Purchases. This means that that the 13,800 “customers” number is not a true reflection of the interest in holding and S/4HANA license. However, when SAP reports this number to Wall Street, they state that the number is clear evidence of authentic customer demand. How the customers ended up with the S/4HANA licenses is left out of the conversation. SAP is not the only vendor to do this, and it is the crux of the lawsuit by the City of Sunrise Firefighter Fund against Oracle as we cover in How SAP and Oracle Coerce Customers into the Cloud.

The actual number of live customers is far lower than this, and the number of real live S/4HANA customers far lower than this reduced number. We are repeatedly contacted by various people trying to analyze the S/4HANA numbers by people who work for customers who don’t have any idea what they are doing, and report SAP’s false numbers to their higher-ups, and call this analysis. The questions are odd because they can’t seem to imagine that the official numbers are incorrect.

The conversation invariably goes something like the following.

I just wanted to verify a few things with you. “So the number of S/4HANA is X, and the number of live S/4HANA is Y, right?”

The overall PR release by SAP is roughly four times longer than it needs to be. This is because it contains so much marketing literature around S/4HANA, which is available in many other places on the SAP website and does not have anything to do with the change to ECC’s support deadline change.

Time to Ask Josh Greenbaum

The PR release then switches to a quote from Josh Greenbaum. Josh Greenbaum is a captive analyst for SAP and is yet another source that can be relied upon to repeat what SAP says as we cover in the article Why Josh Greenbaum Continually Carries Water for SAP.

And he does so again in this quotation.

“Customers making the commitment to SAP S/4HANA for their digital transformations need a partner that is equally committed to supporting innovation across their businesses and processes. Providing maintenance for SAP S/4HANA until 2040 represents a commitment to SAP customers that should give them the confidence to plan for the future,” said Joshua Greenbaum, principal, Enterprise Applications Consulting. “These customers also need the flexibility to plan their transformations carefully and with a minimum of disruption to their ongoing business processes.

This is not really Josh speaking, he is just being puppeteered by SAP, so this comment should be considered an SAP statement. Speaking from logic, it is unclear why SAP saw the need to include the maintenance date for S/4HANA in this PR release, except perhaps to distract from the fact that it was waving the white flag of surrender on its ECC support deadline, which it previously said was immovable.

SAP’s Specifics Around the ECC Support Deadline

SAP then provides the most critical part of the PR release, which is the details of the support extension for ECC.

Following this phase, SAP will offer customers a choice of how they would like to continue with the maintenance for core applications of SAP Business Suite 7 from 2028 onwards:

Customers needing support for their applications in longer conversion phases to SAP S/4HANA can leverage the proven extended maintenance offering. This comes with a premium of two percentage points on the existing maintenance basis for core applications of SAP Business Suite 7 for all support offerings. It will be available for three additional years beginning at the start of 2028 and ending at the close of 2030.

Customers who do not decide for the extended maintenance level of support by the end of 2027 but choose to carry on with their SAP Business Suite 7 software systems will automatically be transferred to the customer-specific maintenance model. This includes problem solving for known issues at unchanged fees.

This is interesting, but nothing that SAP says about its support deadlines is reliable anyway (as this recent extension yet again proves). SAP will continue to support products as long as it is economically beneficial for them to do so, and this can be predicted by merely analyzing the usage of various SAP products.

However, what is important to note is that SAP is using this idea of extending the support deadline to squeeze even more money in support out of customers. So support, which won’t increase in cost for SAP, will increase in cost for SAP customers after 2028. Before the deadline was changed, they were proposing a premium after 2025.

What the Ecosystem Said About the 2025 Deadline

The entire SAP ecosystem was required by their SAP partnership agreement to parrot SAP’s statement that ECC would no longer be supported. This deadline was also repeated ad nauseam by SAP consultants on forums like LinkedIn.

What We Said About the 2025 Deadline

The 2025 deadline make little sense from first time we heard of it because it presumed the type of conversion to S/4HANA that is without precedent even in previous versions of ECC. But this would be particularly problematic for the migration to S/4HANA. As the only entity to publish realistic estimates of S/4HANA migration (all of the other sources are financially connected to SAP and try to help SAP promote their programs). We knew that the live S/4HANA instances were far below what SAP was telling customers and the media. We have been uncovering hidden S/4HANA failures such as we cover in the article The Hidden S/4HANA Failure at LeasePlan, and The Hidden S/4HANA S Oliver and KPS Failure. S/4HANA failures are harsh…they exceed ECC wipeouts, and they are one of the most covered up failures of the implementations that we track. We have covered the reasons in many other articles. However, the upshot is that SAP was never going to have enough customers on S/4HANA to move so many customers off of support for ECC to have the 2025 deadlines make any sense.

We took an official position predicting the deadline would be extended in June of 2019 in the article What is the Reality of SAP’s 2025 ECC Support Deadline? This was not the first time we had told people or had been writing on forums that the 2025 support deadline would have to be extended, but the first time we got around to writing an article on the topic.

The first cracks began showing when SAP began to tell customers that they could buy their post-2025 ECC support, albeit at a premium as we cover in the article Why SAP Will Charge a Premium for 2025 ECC Support.

Creating the Burning Platform…to Push S/4HANA

SAP has better access to the actual numbers in many dimensions that we do. However, they kept to the 2025 support storyline because it helped them create what is called a “burning platform” for customers to move to S/4HANA. SAP and their consulting ecosystem are both responsible for providing false information about the deadline (SAP for license revenue and consulting firms for billing hours).

Furthermore, they were trying to get customers to move to an application that was not ready to be implemented. We have read several accounts of the extension of the 2025 deadline and yet to have run across a single article noting how deceptive it was to tell customers that was obviously not true. This is like trying to analyze any topic only from the announcement of a change while projecting into the future, without asking the question.

“Why was this stated as a policy in the first place?”

This burning platform trick is adopted by SAP, but it was initially perfected by IBM, as the following quotation from a comment on The Register explains.

Our IBM sales engineer told us that support for the DOS/VSE operating system would likely be dropped within 18 months, and that we could get a license for MVS for free for the 1st year.

After that, the license would go from $4200 / month to $11400 / month. Is that a great deal or what?

The upgrade commenced but performance on the 4381 mainframe declined 20%. no problem, there was an upgrade available to fix that. the monthly lease went up by many (MANY) thousands of dollars.

I left the mainframe world in 1987 while all this chaos was taking place. came back 20 years later for a visit and there were no mainframes of any kind to be seen anywhere.

But – interestingly enough, DOS/VSE is still available as a virtual machine in the latest incarnation of z/OS. IBM never dropped support for it.

Heck, Hewlett-Packard supported the HP3000 minicomputer environment from 1978 through 2010.

The SAP folks will be fine if they don’t upgrade.

Who at SAP Knew The Reality of the Fake 2025 Deadline?

In terms of who lied, it would be all of the senior people at SAP who trafficked in this fake deadline at SAP. SAP continues to reduce the experience level of its salesforce, and its salespeople often have very little knowledge and are normally highly mind-controlled by SAP. Many of the salespeople likely thought the deadline was real. Furthermore, SAP salespeople don’t live in a world where things are true or not true, and they would generally see such a deadline as something to help them close a deal. SAP says something, tells them to say something, therefore that thing is true. If later that thing turned out to be false, and a new thing is stated, then that new thing is true.

What Did the SAP Ecosystem Know About the 2025 Deadline?

The 2025 ECC support deadline was plastered all over the websites of the major SAP consulting firms and peppered in their conversations with their clients. It is difficult to say what percentage of the senior members at the major consulting companies knew the 2025 deadline was fake or unrealistic. Still, either way, the fact is that they were once again wrong about SAP, and provided “official” information from SAP to their customers, but were once again wrong.

What did The Media and IT Analysts Know about the 2025 Deadline?

As for the media and IT analysts. The vast majority don’t know enough to know if SAP tells them something if it is true or not true, and they know they have to publish what SAP tells them so that they can keep advertising and other associated revenue coming in from SAP. In analyzing the articles by IT media and analysts, I could not find a single entity that predicted the extension of the deadline.

If any reader can find an example of any media entity or IT analysts that predicted the extension of the 2025 ECC deadline, reach out and we will add links to that article here.

What did Third Party Support Providers Know About the 2025 Deadline (A Hint of Why the Deadline Was Extended)

But I was able to find an insightful article that proposed that the 2025 deadline was actually working against SAP, the author is Mark Smith the CEO of Support Revolution — therefore a financially biased entity (as they want to have the SAP support contract migrated away from SAP), but this quotation rings true.

Six years to go, and SAP’s 2025 deadline still doesn’t seem to be convincing businesses to move to the cloud. The ticking clock means that in 2019 many more businesses will start to make decisions on what to do about their legacy software and many of them will decide to stick with what they have. Securing and supporting what a business knows to work is likely to beat rushing to the cloud to meet a deadline. The 2025 deadline is having an effect, but not necessarily the one SAP wants.(emphasis added) Users are feeling abandoned due to SAP’s not being able to provide support as from the stated date and are focusing on its flagship S/4HANA. “We provide investment protection for the current on-promise solutions of businesses, they can move to the Cloud this way”says Bernd Leukert, member of the Executive Board, Products & Innovation.

But we can say that the stated promise of moving to the cloud is actually not completely true. S/4HANA forces its clients to move to a new data base due to its design and structure. This situation will bring along a complexity within itself without a doubt. Organizations have two options with regard to the 2025 Deadline in the decision stage;

This may be the most insightful reason as to why SAP extended the ECC support deadline. If you had asked us when we made our prediction about the date of the extension, we would have not guessed the very beginning of 2020. The reason? Because we would have thought that SAP would have wanted to continue to use the fake 2025 deadline to batter its customers into moving to S/4HANA. This “early” extension of the 2025 deadline (5 years before the deadline was to take effect) is evidence to us that this deadline was simply working against SAP, and causing SAP customers to “explore their options.” SAP does not want this. They want everyone in the SAP bubble, drinking from the fountain of false information provided by the SAP consulting firm, paid off IT media and IT analysts. As soon as one begins looking options and takes “the red pill,” other options begin to look very appealing. A very high percentage of SAP’s continual revenue flow is built around its customers not having the interest or time to actually investigate their options. And the SAP consulting companies sit out at accounts providing a steady stream of false information about SAP.

What Did Customers Know About the 2025 Deadline?

Some customers knew the deadline would be extended. This is expressed in the following quotation.

SAP user and industrial vacuum manufacturer Edwards is considering this move to S4/HANA, but is finding the business case for process change difficult to justify.

Rob Moore, SAP business information manager at Edwards, said users were aware of the proportion of the community yet to move to the new platform. “Given those figures and the fact that the deadline is only five years away, I think SAP is going to have its work cut out to get everyone moved in that time, and then be able to declare that support is finished.” – The Register

A customer can say this, but no one else who covers SAP could say such a thing. They would be immediately reprimanded by their manager/partner/etc.. and told to take down the comment, article.

Support for ECC After 2030?

This is an excellent time to make a further prediction.

SAP will extend the support of ECC past 2030.

The reason is that even by 2030, there will be a sizable number of customers that have not migrated to S/4HANA. And something that is never discussed in the SAP ecosystem, there will also be a large number of companies that never move to S/4HANA. They will eventually move off of ECC onto something else.

To drop support for ECC would be to lose out on a great deal of money, and as we cover in the article How do SAP and Oracle’s Support Profit Margins Compare to Pablo Escobar?, SAP, similarly to Oracle, has an 85% margin on its support. Neither entities that traffic in blood diamonds, nor international drug lords, nor SAP or any other company will ever turn down 85% margins.

SAP is proposing that companies can now have support post-2025 if they pay a premium. However, with an 85% margin, why is a premium even necessary? Because SAP can pitch it as a win for customers. This is just a ridiculous mind control tactic. And once again, while scouring the Internet, I could not find a single article that even brought up this subject.

SAP receives our Golden Pinocchio Award for telling its customers what it would have known would end up being untrue. 

Conclusion

This was not a particularly difficult prediction to make, but we were one of the only entities to publish this prediction. This illustrated how restricted the vast majority of entities that publish information around SAP are censored in what they can publish.

We have added this accuracy data point to our accuracy measurement of SAP predictions that you can view in the article A Study into SAP’s Accuracy. As you can see in the article, we are far better at predicting what will happen with SAP than is SAP (or, of course, any of the ecosystems that merely repeats what SAP says).

Honorable Mentions

In 2018, Jarret Pazahanick, a SuccessFactors consulting previewed the change from the 2025 deadline. This quote provides an excellent example of how SAP puts its customers in no-win situations, and how the 2025 deadline caused a large amount of unnecessary hand wringing, all for a deadline that was eventually extended in any case.

The bottom line is SAP has really struggled to convince their 12.5k SAP HCM customers to move to SuccessFactors as the last provided info has 600 out of the 2,000 SuccessFactors Employee Central customers coming from SAP HCM. Many of these customers understandably want some assurances that SAP will continue to support SAP HCM further out than 2025. which could easily have been provided by getting an agreement to move the entire Business Suite out to 2030. Instead, SAP has decided to introduce a new license offering called SAP HCM On-Premises S/4HANA that will be built by 2023 and will be based on SAP HCM so they are counting on customers trusting SAP will deliver something five years from now, being willing to do an upgrade, signing up for a new license, moving to HANA all to get virtually the same functionality they have today and an extension of support until 2030.

My thought is eventually SAP will realize that slow adoption in FI to S/4 + all the areas in the SAP Business Suite where S/4 does not have enough functionality to date will drive them to revist the entire strategy and extend the business suite to 2030. Time will tell and will be interesting to look back on this comment thread in 3-4 years.

The Necessity of Fact Checking

We ask a question that anyone working in enterprise software should ask.

Should decisions be made based on sales information from 100% financially biased parties like consulting firms, IT analysts, and vendors to companies that do not specialize in fact-checking?

If the answer is “No,” then perhaps there should be a change to the present approach to IT decision making.

In a market where inaccurate information is commonplace, our conclusion from our research is that software project problems and failures correlate to a lack of fact checking of the claims made by vendors and consulting firms. If you are worried that you don’t have the real story from your current sources, we offer the solution.

References

https://news.sap.com/2020/02/sap-s4hana-maintenance-2040-clarity-choice-sap-business-suite-7/

https://www.theregister.co.uk/2019/12/04/users_call_for_sap_flexibility_in_2025_software_support_deadline/

*https://erpnews.com/saps-2025-deadline-will-focus-on-minds/

*https://itpsap.com/is-saps-2025-deadline-real/

*https://techhq.com/2019/06/s-4hana-upgrade-proves-unpopular-among-sap-users/

We found some interesting quotations in this article around support.

Fifty-three percent intend to keep SAP running “at least until 2025” and 26 percent will do so “beyond 2025”. That’s possibly due to the poor service that SAP gives its customers (at least, those surveyed by Rimini Street), with a miserly 5 percent only stating that the support fees paid to SAP were “well worth the value we receive.” When asked “What are your biggest challenges with SAP support today?”, 20 percent complained that SAP responded that they should solve the problem by applying a support patch or update. Many SAP implementations are deliberately not updated or patched due to the bespoke nature of their installations either breaking or preventing the update. With the average cost of a re-implementation of SAP Business Suite 7/ECC 6.0 to SAP S/4HANA at over US$30 million, and allegedly variable quality in expensive help and support, no small wonder that many are treading water, and intend to continue doing so well after 2025. The issue experienced by SAP is one that any software development company will attest to: making 30 bespoke installations of a single piece of software effectively means supporting 30 different apps.

https://diginomica.com/sap-announces-critical-changes-maintenance-policy-post-2025-it-enough

https://e3zine.com/end-road-sap-2025-deadline/

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A Quick Summary of: A Brightwork Warning on SAP’s Cloud Extension Program

Executive Summary

  • SAP has created a sales program that will cause a number of customers to convert their on premises SAP environments to cloud — on paper that is.
  • We cover this program that SAP does not want to be known outside of just those customers they share this with.

Introduction

This is a summary of the article A Brightwork Warning on SAP’s Cloud Extension Program, This provides the highlights of the article, but not the details to read the details, see the link above.

The Article Summary

SAP has created a sales program that will cause a number of customers to convert their on premises SAP environments to cloud – on paper that is.

SAP has introduced a program for migrating SAP customers to the cloud but migrating them only on paper.

The customer may partially terminate existing on-premise licenses and associated maintenance payments in conjunction with a purchase of a subscription to cloud solutions from SAP. Premium support engagements cannot be terminated in conjunction with a subscription to cloud solutions from SAP. SAP Business One is not in scope.

Who Should Consider the Extension Policies?

Any existing SAP customer with unused, perpetual licenses that are shelfware who is moving to SAP Cloud or any licensed solution offering should make use of the Extension policy.

This is the problem with getting advice around SAP from an entity that receives around $150 million from SAP as we cover in the article How to View Gartner’s Financial Bias in Favor of Large Vendors, and Understanding The Brightwork Estimate of The Amount of Money Paid by SAP to Gartner Per Year.

SAP Analytics Cloud has an attractive vision: ONE SIMPLE CLOUD with smart features, integration with live SAP data and applications.

Commercial incentives make it financially attractive to adopt SAP Analytics Cloud and stay with SAP rather than competitive tools.

SAP Analytics Cloud Enterprise Readiness contributes to the modernization of analytics as part of the SAP Intelligent Enterprise realization.

SAP will pretend to migrate customers to SAP Analytics Cloud with this program.

What it Means

This pushes SAP Analytics Cloud into the account, but it has nothing to do with whether SAP Analytics Cloud is a good fit for the account.

The presumption will be that because the company has BusinessObjects and because SAP has an application called SAP Analytics Cloud, that has zero to do with BusinessObjects, that SAP customers will naturally move to this new application.

Why would any company migrate to SAP Analytics Cloud without performing a detailed analysis of whether SAP Analytics Cloud is the best possible option? There is, of course, no discussion of this in any of the SAP documentation.

What SAP Wants from the Program

SAP wants customers to migrate to SAP Analytics Cloud-based on the logic of directly converting the support for BusinessObjects to SAP Analytics Cloud as an example provided in the article, but this generalizes to other cloud extensions into other SAP cloud products.

Iver van de Zand or SAP proposed in a sales leadership webinar thinks that they can compete with Tableau when SAP Analytics Cloud is nowhere close to competitive.

SAP intends to push its customers to the “cloud on paper” so that SAP can then report enormous cloud growth to Wall Street.

To see the full details, see the original article A Brightwork Warning on SAP’s Cloud Extension Program.

The Necessity of Fact Checking

We ask a question that anyone working in enterprise software should ask.

Should decisions be made based on sales information from 100% financially biased parties like consulting firms, IT analysts, and vendors to companies that do not specialize in fact-checking?

If the answer is “No,” then perhaps there should be a change to the modern approach to IT decision making.

In a market where inaccurate information is commonplace, our conclusion from our research is that software project problems and failures correlate to a lack of fact checking of the claims made by vendors and consulting firms. If you are worried that you don’t have the real story from your current sources, we offer the solution.

Financial Disclosure

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.

Search Our Other SAP Cloud Content

How Real is SAP’s Intelligent Enterprise?

Executive Summary

  • SAP introduced the concept of an Intelligent Enterprise as a significant driver for its software.
  • We answer where this concept originated and how valid it is.

Introduction

The term intelligent enterprise is an outgrowth of the current obsession and hype around the term artificial intelligence. The term is problematic because it contains a virtue necessarily within its name, and so like terms such as “smart bomb” or “smartwatch,” it tends to be self diluting over time.

But let us keep an open mind and review what SAP says about its Intelligent Enterprise offering.

Straight From SAP….or, That is ASUG

We found several articles about the SAP Intelligent Enterprise from SAP, but we thought the article published at ASUG’s website was the most understandable. SAP marketing writes most of ASUG’s material, os when something is published at ASUG, it should be considered approved by or entirely written by SAP.

Let us take a look at how the article begins.

Intelligent Enterprise is for Next Generation Businesses?

Technology pundits, industry analysts, and enterprise technology providers are fond of sharing their visions for how next-generation businesses should operate. At the 2018 SAPPHIRE NOW and ASUG Annual Conference, SAP introduced its own vision, described as the “Intelligent Enterprise.” But what does this term really mean? And what does it mean for SAP customers?

Right off the bat, we now define one virtuous term, intelligent enterprise, through endorsing that it is what “next generation” businesses use. What is a “next-generation business?”

This is another reference to “something good.”

The logic goes something like this.

Good Item is Used….Only by Excellent Entities

This builds a series of positively associative assertions; good things are connected to other good things, which, of course, is all linked back to SAP.

Data-Driven Accelerated Outcomes?

SAP defines the term like this: “Intelligent enterprises effectively use their data assets to achieve their desired outcomes faster—and with less risk.” The speed comes from automating complex processes within the business and bringing them together around a united core of master data in the cloud.

Organizations need to buy into certain philosophies for this approach to work. SAP identifies four key enablers to the intelligent enterprise:

1. Customer-centricity

2. Data that drives differentiation

3. Digitized processes

4. A cloud-first approach

This is a bit generic. Several of these items are things that no company would not admit to following, except perhaps being “cloud-first.”

However, it does not ring true when SAP proposes this, because while SAP is aggressively cloud washing its revenues as we cover in the article A Brightwork Warning on SAP’s Cloud Extension Program. This is because most of SAP’s customers use their SAP applications on premises.

Business Processes + Intelligent Technologies?

When you consider SAP’s Intelligent Enterprise vision, it functions a little like a formula. It serves these key business processes through its intelligent suite of products:

  • Customer Experience
  • Manufacturing and the Supply Chain
  • Digital Core (ERP)
  • People Engagement (HR)
  • Network and Spend Management (procurement)

So SAP has very little customer experience business (read CRM). Yes, SAP customers use SAP for a lot of manufacturing and supply chain and ERP, and they use SAP for HR, and quite a bit less for procurement (SAP has little overlap between its ERP customers and its customers that use Ariba).

So all that we have here is a statement of things that SAP customers use from SAP. There is nothing notably different about this — and the same usage pattern could be documented ten years ago on SAP accounts.

AI/ML/IoT/Leonardo

Then, where businesses want to apply intelligent technologies like artificial intelligence, machine learning, the Internet of Things (IoT), and more, they’re able to add those through SAP Leonardo. Finally, businesses need to go through the process of making sure their data is not only harmonized but moving much of it to the cloud, so they can manage it efficiently.

This is the obligatory or seemingly obligatory part of the article that mentions AI/ML. SAP has close to nothing to do with AI/ML so that we can throw those terms out.

Now we are left with IoT and Leonardo.

This article was written in 2018, but at this time, Leonardo was already dead, which we officially declared in 2019 in the article Our 2019 Observation: SAP Leonardo is Now Dead. SAP has stopped promoting Leonardo — so if the SAP Intelligent Enterprise was based upon Leonardo, well, that is a problem as it does not have any real future.

Intelligent Enterprises in Practice?

Given SAP’s focus on financial ERP applications, it often cites the example of invoice and payment matching, along with all the related approvals and subsystem ratification procedures such as separation of duty. We can now almost completely automate these procedures, while leaving a gateway for human hand-offs when we need to resolve anomalies. Of course, these anomaly resolutions can also be significantly automated as needed.

SAP’s financials in its ERP system is the most robust functionality in any of its applications.

However, it is not true that these processes are “completely automated.” They function about the same in S/4HANA as they did in ECC, and not many companies have moved to S/4HANA (and far fewer than stated by SAP).

This quotation is just inaccurate.

Embracing Automation?

Customers today can start to use this intelligent software-supported automation to shoulder repeatable, definable tasks. Embracing this change will allow companies to free up employee time and empower them to do more meaningful and strategic work.

What is intelligent software?

Did we miss something?

This is the same software as before SAP’s Intelligent Enterprise program was rolled out. All software contains intelligence, as does SAP’s, but there is nothing here to support the creation of a new term.

Let us see if the rest of the article justifies this claim.

Deeper Human-Like Intelligence?

As mechanized and back-end as these technologies are, customers can use SAP products to bring a human-like front end to the intelligent automation now being engineered into the enterprise. For example, we can create personalized and unique customer experiences using AI, chatbots, and other related voice technologies.

What is the human-like front end? I am serious because I have never heard this term before. It implies that the front end is like a human. I have never used or seen a UI that looks like a human. The author may have meant that it is user-friendly.

SAP has SAPGUI and then lower used applications like SuccessFactors or Ariba that have more usable UIs (as they are acquisitions), but it is not like human-like. There is no new automation. The AI is non-existent, and no one is using chatbots on SAP projects. Chatbots are for a company’s website, which is not something that SAP competes in, and chatbots aren’t particularly useful. Try asking one a question sometimes.

Applying Something That is Not Demonstrated

Companies that want to apply these intelligent technologies can turn to SAP for frameworks to make this happen, such as SAP Conversational AI, an end-to-end toolkit for training, building, and monitoring chatbots. According to SAP, “These chatbots can be integrated with SAP and non-SAP systems and are available as preconfigured industry-specific bots. So far, users have built 60,000 SAP Conversational AI chatbots.”

Is this primarily coming down to adding chatbots to SAP? Again, chatbots are for website visitors (at least mainly).

The Crucial Cloud Connection?

The cloud is the essential connection across the entire intelligent enterprise. Whether on premises, public, or hybrid, the degree to which the intelligent enterprise gets smarter is a direct factor of the amount of secured network connectivity it engineers into the fabric of its new computing stack.

Why is that true? A hosted solution, hosted in a data center (that is not cloud) is also a connection across the entire intelligent enterprise. SAP then contradicts itself by saying

“whether on premises, public or hybrid”

Doesn’t that deny the claim that it is cloud….that is what was stated in the previous sentence?

Intelligence that Comes from…..Blockchain?

Part of this “connectedness factor” will set customers up to harness new innovations like blockchain. SAP says it has recognized the part that blockchain plays in creating more-intelligent enterprises, so it’s developed SAP Cloud Platform Blockchain. This offers blockchain as a service, delivered at the right power and scope, based on individual customer needs.

SAP may have a cloud blockchain offering, but many SAP customers do not use blockchain. Furthermore, blockchain is an online register — so why is it intelligent, or why does it contribute to the SAP Intelligent Enterprise?

It is not at all clear. SAP also states that it has 65 customers that participate in its blockchain initiative, but that still does not explain why blockchain is part of something intelligent.

The Intelligent Enterprise Adoption Curve

Ultimately, becoming an intelligent enterprise is about adapting and changing so you’re ready for what’s ahead. These types of enterprise-wide changes require significant investments and culture shifts, so SAP acknowledges that customers will adopt these changes in phases. And some organizations will undoubtedly move faster than others, acting as the early adopters.

But the nature of these changes can start to create a virtuous cycle. As organizations adopt technologies such as automation controls, chatbots, blockchain, and machine learning (ML) to gather more information, they will get smarter—continuing to speed up the cycle of innovation.

Many customers will still have a way to go before they become full-on intelligent enterprises. But these technologies exist, and SAP is ready to help customers start getting the most from them now.

In this explanation, SAP threw a lot of somewhat disassociated things into a big Christmas stocking and called it “Intelligent Enterprise.” And many of these things are things that SAP has very little to do with.

Conclusion

This article by SAP is an incoherent and disassociative attempt to make some old things that SAP is involved with and things that are trendy but have little relevance to SAP to create something new and sexy for customers to get excited.

There is no evidence from SAP that its Intelligent Enterprise is anything.

The Necessity of Fact Checking

We ask a question that anyone working in enterprise software should ask.

Should decisions be made based on sales information from 100% financially biased parties like consulting firms, IT analysts, and vendors to companies that do not specialize in fact-checking?

If the answer is “No,” then perhaps there should be a change to the present approach to IT decision making.

In a market where inaccurate information is commonplace, our conclusion from our research is that software project problems and failures correlate to a lack of fact checking of the claims made by vendors and consulting firms. If you are worried that you don’t have the real story from your current sources, we offer the solution.

Financial Disclosure

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.

Search Our Other Digital Transformation Content

References

https://www.asug.com/insights/what-makes-an-intelligent-enterprise

How Executives and Companies Now Make Up Transformations That Never Occurred

Executive Summary

  • Executives have begun referring to transformations that never occurred as resume builders.
  • Using the term transformation is now a way to take credit for a hazy accomplishment.

Introduction

Digital transformation is a common term used in the IT space and, in particular, in the SAP space. It is a recent term and also a highly problematic term. I now come across the statement that some SAP application was implemented for digital transformation or part of a digital transformation program.

Transformations Became a “Thing”

The term is now often shortened to just “transformation.” Increasingly any corporate initiative is being labeled a transformation to give that initiative extra cache. Many executives desire to enhance their resume by being thought to have lead transformations at their companies. We noticed this in the analysis of the description by former Infosys CEO, Vishal Sikka as we cover in the article How Much of Vishal Sikka’s Explanations on Artificial Intelligence is Complete BS?

From this article, we noticed a rewriting of history to fit his background into participating in the transformations category.

Rewriting History

Vishal has a curious explanation for why he is so uniquely qualified to lead an AI startup, and at least of the reasons he listed was his participation in transformations.

I have a Ph.D. in AI and have had the opportunity to work in large companies in enterprise software and services. I understand transformation in a way that few people do because I have lived through two large-scale, successful transformations. I thought it was time to take advantage of the unique gifts I have been given. That’s how I ended up here.

Also, what transformation is Vishal referring to?

Did SAP Transform When Vishal Sikka Was CTO?

SAP degraded as an organization while Vishal worked there, with more employees and work being done in India. This led to terrible support, and then Vishal getting tied up in what Teradata asserts is IP theft from building HANA as we cover in the article How True is SAP’s Motion to Dismiss the Teradata Suit. (And Teradata further says in court documents that Vishal Sikka was entirely on board with the IP theft.) I have been following SAP since 1997, and I don’t know what transformation Vishal is referring to.

Vishal then left SAP unexpectantly and under unusual circumstances.

Did Infosys Transform When Vishal Sikka Was CTO?

Next, he took the top position at the horrible Infosys — a firm which does nothing but US worker displacement and rigs the H1-B visa program for which they were found to have defrauded as we cover in the article Who Got the $34 Million Fine from the Infosys H1-B Fraud Case?

When Vishal started working for Infosys, they were an H1-B mill that engages in H1-B fraud and is known for nothing except low priced, low skilled IT bodies. And after Vishal left, Infosys is known…..for the same thing.

What is the transformation again?

Conclusion

The term “digital transformation” is a throwback to an age when digital technologies transformed processes. Still, at this point, it makes little sense to use it as a term as what is currently happening is that new hardware and software are merely replacing older hardware and software.

The term “transformation” is an outgrowth of the term digital transformation. It is nearly untestable in that just about any executive is prone to state that their involvement in a company leads to a significant improvement. However, in the examples provided above, the companies used in the case presented by Vishal Sikka work about the same as they did before Vishal Sikka’s addition, as they did after Vishal Sikka moved on. This term will most likely be continued to be used in this fashion until it ceases to have the same impact it once did, and then at that point, a new term will be created that carries a further appeal by its novelty.

The Necessity of Fact Checking

We ask a question that anyone working in enterprise software should ask.

Should decisions be made based on sales information from 100% financially biased parties like consulting firms, IT analysts, and vendors to companies that do not specialize in fact-checking?

If the answer is “No,” then perhaps there should be a change to the present approach to IT decision making.

In a market where inaccurate information is commonplace, our conclusion from our research is that software project problems and failures correlate to a lack of fact checking of the claims made by vendors and consulting firms. If you are worried that you don’t have the real story from your current sources, we offer the solution.

Financial Disclosure

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.

Search Our Other Digital Transformation Content

References

How a New Startup Aims to Use AI to ‘Amplify Humanity’

Why Jelena Perfiljeva Refuses to Debate Brightwork Research

Executive Summary

  • SAP resources tend to live in a bubble where they only consume biased content.
  • This makes it very difficult for them to tolerate fact checking.

Introduction

We perform fact checking, and we fact check SAP along with several other entities in the IT space. As this fact checking contradicts SAP’s marketing, this causes cognitive dissonance on the part of many SAP resources, for whom all they know is repeating SAP information. One such resource is Jelena Perfiljeva.

Jelena Perfiljeva wrote the following tweet about Brightwork Research & Analysis.

This tweet is in response to use contradicting anti-Brightwork comments on SAP’s page by SAP resources. The comments repeatedly asked for the SAP resources to do something other than making personal attacks and to provide specific details that Brightwork Research & Analysis published that were false. Not one of the SAP resources replied, which includes Jelena Perfiljeva. But what Jelena Perfiljeva did is instead change venues to Twitter where she commented that I lived “under a bridge.”

This goes along with a storyline that I am a troll. The evidence that I am a troll according to SAP resources is that I fact check or contradict SAP.

Our Response to Jelena

We reached out to Jelena on Linkedin. Here is the message.

If you want to debate me, I am right here. We can have a debate on HANA or any other topic. What it looks like to me is that you are trying to stay away from any substantive debate and are trying to smear Brightwork, but without doing the work to understand the topics. A person with your background is not really in a good position to debate me, so you appear to be having an emotional reaction and are trying to get back at me.

But if you are going to do it, you need to provide evidence. Calling people you disagree with mentally unbalanced is unethical on your part. Responding to comments in batch is not an indicator of a person being unbalanced. If you and others are going to comment, I am going to comment in return. You should expect that.

Jelena’s response to this message? She disconnected from me on LinkedIn.

SAP Resources Often Lack Calls for Evidence

Jelena is generally offended by our repeated requests for evidence, as can be seen in the following tweet from Jelena.

I repeatedly asked for evidence or some specifics from SAP resources in numerous comments, and Jelena does not appreciate this. As with many SAP resources, they prefer to work off of feelings and not to contradict Brightwork’s conclusions with evidence.

Jelena’s Ready-Made Excuse for Not Being Able to Debate the Specifics

By categorizing a fact-checking service as a troll and she justifies being unwilling to support here positions. We have debated Jelena previously and found she argues about things she knows nothing about — and takes whatever position SAP takes and assumes it is right.

This is the same strategy used by Barbel Winkler as we cover in the article Is Bärbel Winkler Correct the Brightwork SAP Layoff Article Was Fake News?

 

Conclusion

Most SAP resources and Jelena Perfiljeva is yet another, don’t care what is right. They are not able to debate their positions (Jelena is an ABAPer and knows next to nothing about most of the research at Brightwork), but instead choose to smear any entity that covers SAP, but is not paid off by SAP.

SAP resources like Jelena Perfiljeva, Barbel Winkler, and so many others will tolerate and amount of inaccuracies from SAP, and the SAP ecosystem because they feel like it lines their pockets. This is under the idea that any lie is acceptable, as long as it comes from your side.

The Necessity of Fact Checking

We ask a question that anyone working in enterprise software should ask.

Should decisions be made based on sales information from 100% financially biased parties like consulting firms, IT analysts, and vendors to companies that do not specialize in fact-checking?

If the answer is “No,” then perhaps there should be a change to the modern approach to IT decision making.

In a market where inaccurate information is commonplace, our conclusion from our research is that software project problems and failures correlate to a lack of fact checking of the claims made by vendors and consulting firms. If you are worried that you don’t have the real story from your current sources, we offer the solution.

References

See Our Other SAP Support Content

The Brightwork SAP Bribery Tracker Per Country

Executive Summary

  • SAP has several international bribery cases.
  • This table was created to keep these bribery cases and to catalog likely future SAP bribery cases.

Introduction

At Brightwork Research & Analysis, we have long held that SAP is a highly corrupt company, and its rise had much more to do with its ability to corrupt other entities in IT than anything to do with its technology.

Soft Versus Hard Corruption

Internationally “soft corruption” is a daily activity with SAP. For example, SAP applications are recommended for the only reason that it is profit-maximizing for SAP consulting companies, even though it is infrequent that an SAP application can meet its sales conjectures. SAP has some of the lowest success levels of any software vendor. SAP partners repeat any falsehood proposed by SAP and work against the interests of their “clients,” as we cover in the article What is the Real Story with SAP’s Run Simple? 

This table only catalogs the “hard corruption.”

SAP Bribery Cases Per Counry

 
Bribery Case
Country
Description
1The Guptas Scandal
South Africa
SAP is accused of using its partners in South Africa to pay off Gupta companies in order to obtain contracts from Eskom and South Africa Rail, which we covered in the article How Deloitte, McKinsey, the Guptas and SAP Ripped Off Eskom
2Tanzania Port Authority
Tanzania
SAP is accused of using its partners in Tanzania to pay off companies in order to obtain contracts from The Tanzanian Port Authority.
3Unspecified
Kenya
SAP is accused of using its partners in Kenya to pay off companies in order to obtain contracts from The Tanzanian Port Authority.
4Various Panamanian government contracts
Panama
"Vicente Garcia, SAP International’s former vice president of global and strategic accounts. now sits in a federal prison serving a 22-month sentence for bribing foreign officials. Garcia pled guilty to one count under the Foreign Corrupt Practices Act (FCPA) in August 2015 for bribing Panamanian government officials in a successful attempt to win large software contracts for SAP."

Conclusion

Overall, in our estimation, “soft corruption” far exceeds the “hard corruption” that is listed in the table above.

Hard corruption makes the headlines because it is explicitly illegal. However, soft corruption is a far more significant issue with SAP, and it is accepted as merely a natural part of IT.

The Necessity of Fact Checking

We ask a question that anyone working in enterprise software should ask.

Should decisions be made based on sales information from 100% financially biased parties like consulting firms, IT analysts, and vendors to companies that do not specialize in fact-checking?

If the answer is “No,” then perhaps there should be a change to the present approach to IT decision making.

In a market where inaccurate information is commonplace, our conclusion from our research is that software project problems and failures correlate to a lack of fact-checking of the claims made by vendors and consulting firms. If you are worried that you don’t have the real story from your current sources, we offer the solution.

References

https://www.bloomberg.com/news/articles/2019-02-28/sap-eoh-unit-accused-of-bribery-in-tanzania-techcentral-says?sref=tnzoy5oH

http://www.fraudjournals.com/sap-liable-for-employee-bribery-scheme/

https://www.channelpartnerinsight.com/channel-partner-insight/news/3071905/sap-faces-second-public-sector-corruption-investigation-in-africa

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How SAP is Cutting Some of Its Partners Out of the SAP Support Business

Executive Summary

  • SAP has had a long term arrangement where it allows partners to take first level support.
  • With its Cloud Extension program, SAP is changing this arrangement for many SAP partners.

Introduction

We covered in the article A Brightwork Warning on SAP’s Cloud Extension Program, how SAP has pushed for customers to convert to their on premises SAP applications to cloud applications, and how this extinguishes the support contract and is converted to a cloud subscription.

When is cloud not cloud? When it is cloud on paper. This is the second innovation we have been able to trace to SAP regarding cloud, after their upcharge as a service as we covered in the article How to Understand SAP’s Upcharge as a Service Cloud.

What is Cloud on Paper?

Cloud on paper is where an on-premises application is “converted” to a cloud application, even though the conversion may not happen for years, while SAP claims the conversion to cloud to Wall Street.

This takes the support contract and converts it to a cloud subscription that cannot be canceled for normally between 3 to 5 years.

It should be pointed out that cloud was originally supposed to reduce lock-in and was supposed to be a month to month term (at least). However, SAP violates nearly every tenant of cloud and like Oracle, continues to call its offering “cloud.” We are covering this issue, and it extends far past SAP and Oracle with vendors claims to be cloud without even trying to meet the definition of cloud.

SAP has still yet to master multitenancy, nor have its HANA Enterprise Cloud (HEC) partners. The SAP Cloud (which is managed by SAP unlike the HEC) is really just a storefront at this point. The HEC “constellation of hosting providers” pretending to offer cloud and pretending to be associated with SAP but which are all managed independently from SAP are still referred to as cloud in the marketing literature.

One might ask the question as to why HEC partners are necessary if its cloud — and of course the answer is that HEC is faux cloud.

It is hosting.

When hosting is simply moved from the company’s own data center to the vendor’s data center, there is little benefit to the transition.

And SAP is not interested in investing in its cloud infrastructure. SAP is pushing customers to far less efficient private hosting providers that pretend to be cloud while announcing the Wall Street that they are deepening their partnerships with the hyperscale cloud providers.

The following graphic is from SAP on this exact topic of converting customers to cloud on paper. SAP has pushed for this conversion to happen by Dec 31, 2019, with SAP knowing full well that the customer is both not ready to migrate off of on-premises.

In the case of conversion of the on premises BusinessObjects license to the SAP Analytics Cloud (SAC) subscription, the SAC is extremely immature, and SAP just recently introduced the SAC as a replacement for its sunset Lumira, which was supposedly the future until just recently. 

The Negative Feature for a Customer’s Third Party Support Options

There are several negative features about the SAP cloud conversion program. One is related to the elimination of third party support options.

If SAP is successful in converting companies to cloud subscriptions, which a big part is converting the support contract to the subscription, then the ability of companies to access third party support is of course greatly limited. In the case of converting BI and BusinessObjects customers to SAP Analytics Cloud, this coverts the support into a cloud subscription, even though the cloud product (SAP Analytics Cloud) is barely used. Or not used for some time in any case. In addition to booking the faux cloud revenue, SAP will have blocked out the potential to use third party support for that part of their SAP footprint.

In this case, the cloud, which remember was originally intended to increase the freedom of buyers, is used to further lock-in buyers and reduce their options.

How Do SAP Partners Fit Into Cloud Conversions?

In many cases, SAP has the entirety of the customer support contract for the on premises applications. In this case, the revenue switching (from support to cloud subscription) does not change much, as money continues to flow to the same entity (SAP).

However, in cases where there is an SAP partner that owns the first level support contract, it means that SAP must pull the support contract from the partner. And it means the revenues are transferred from the SAP partner to SAP.

This pulling of revenues from these partners will naturally allow SAP to show cloud revenue growth when it is instead just pulling in maintenance revenues that previously sat at partners. Obviously, many SAP partners did not go along with this. However, SAP had an out. They always have the right to cancel the partnership agreement. And this allows SAP to perform the conversion to subscription revenues.

For 2019, on-premises conversions to cloud had to occur before the end of the 2019 year.

Some SAP Partners Being Snapped Up by Other Partners

This has caused many SAP partners to lose significant revenue and made them susceptible to being acquired at firesale prices. One company named Seidor has been acquiring these companies in Latin America. Seidor is about to go IPO in the US and is pitching this a growth story, however, what is not discussed is how Seidor is obtaining this growth.

The Longer Term Implications of Support Contracts Being Removed from SAP Partners

At one point SAP was a growth story and it led to a great increase in the number of partners. SAP offered its consulting and sometimes support business to partners, in exchange for being recommended by these SAP partners. This had much more to do with SAP’s growth than SAP’s technology.

However, SAP cannot meet the growth targets it has laid out to Wall Street with authentic license sales. Therefore, it has needed to cut corners to obtain revenue. SAP customers are by in large not moving to S/4HANA, and HANA stopped growing as a product a number of years ago as we cover in the article Why Did SAP Stop Reporting HANA Numbers After 2015?

  1. Corner Cut Number One: One of these corners was to introduce the fallacious type 2 indirect access (we cover the distinction between Type 1 and Type 2 indirect access in the article How to Best Understand Type 1 Versus Type 2 Indirect Access.
  2. Corner Cut Number Two: The cancellation of partnership agreements in order to convert support contracts sitting in smaller partners into cloud on paper subscriptions is a second corner cut that while it will buttress SAP’s revenues in the short term shows that SAP’s growth period has come to an end, and the overall SAP ecosystem is now contracting. However, as SAP has the ability to pull in revenues from the ecosystem so that they appear on SAP’s income statement, this contraction will not be apparent for some time.

Conclusion

SAP’s cloud extension program or “cloud on paper” program will allow SAP to show large revenue growth in cloud for the 4rth quarter of 2019, which is why we are predicting this exact outcome in the 2019 Q4 analyst call.

We also predict that as all of the analysts on the call hold SAP stock as we covered in the article Why Analysts Do Not Ask Challenging Questions on SAP’s Quarterly Calls, and Wall Street analysts tend to perform such shallow analysis, none of the major firms will pick up this story, and the IT media entities will uncritically report SAP’s extravagant cloud growth.

Microsoft, IBM, and even Oracle grant partners access to initial partnering schemes with full sell capabilities because it’s in their interest to do so. The fact that SAP has periodic purges is used to threaten and coerce active members of the ecosystem who have something to lose if they don’t behave. SAP has a high annual churn. However, it is not because they prune and trim the best.
Instead, it is because they have a small percentage that is guaranteed to keep their partnership (say big firms) but then other partners are partners that can be burned.

The Necessity of Fact Checking

We ask a question that anyone working in enterprise software should ask.

Should decisions be made based on sales information from 100% financially biased parties like consulting firms, IT analysts, and vendors to companies that do not specialize in fact-checking?

If the answer is “No,” then perhaps there should be a change to the present approach to IT decision making.

In a market where inaccurate information is commonplace, our conclusion from our research is that software project problems and failures correlate to a lack of fact checking of the claims made by vendors and consulting firms. If you are worried that you don’t have the real story from your current sources, we offer the solution.

References

https://www.seidor.com/content/seidor-com/en/seidor/noticias/seidor-resultados-2018.html#

See Our Other SAP Support Content

Fact Checking SAP Causes SAP Resources to Seek Safe Spaces

Executive Summary

  • SAP resources live in a bubble where virtually all media coverage towards SAP is positive.
  • This causes them to be triggered by fact checking of SAP.

Introduction

Since we have been fact-checking SAP, we frequently receive comments from SAP resources that have nothing to do with the content but everything to do with the tone. Here is one such example.

To me Brightworkresearch and the author of that article always sounded like they were on personal vendetta against SAP. Just the language used didn’t look to be from unbiased analyst.

But everyone is an analyst this days and to stand out in a sea of “content generators” one has to be different ,  so maybe that’s their angle. – Denis Konovalov

Notice that the commenter here refers to the fact that he thinks that Brightwork sounds like we have a personal vendetta. This is quite a claim, but this is not evidence. This is our response to Denis.

This seems to be a repeat of Barbel’s overall argument, which asserts that everything can be determined by the “tone” of an article. Let us take a look at how well your and Barbel’s hypothesis around using tone to determined intention and bias.

What is Gartners tone? Quite neutral right? How about Forrester. Again neutral.

Therefore by applying your and Barbel’s hypothesis, both Gartner and Forrester should be considered unbiased. However, it is public information that SAP pays both of these entities.

Brightwork is virtually the only research entity that covers SAP that is not paid by SAP. And we are the only real fact-checking service and website for both SAP and Oracle.

Unsurprisingly, you do not want SAP fact-checked, as you are pro-SAP. Therefore, you make an accusation that you can’t support, which is that there must be some personal vendetta and your evidence? Tone. You see, we would never do that. We would never smear a source because we did not like its tone. And secondly, tone is not a determination of what is true, and it is also not (as I just proved) not a good indicator of whether a source is biased.

The fact neither you nor Barbel have any evidence of bias against Brightwork, however, I do have conclusive evidence of bias by you, and in fact all of the commenters on this blog, including Barbel as having a pro-SAP bias. And that it appears to me is that individuals with a pro-SAP bias seek to smear the only independent fact checking body that covers SAP rather than addressing any of the specific arguments of the research. It also brings up the question, if you have a 100% proven financial bias, should you be accusing people of being biased? I would say no.

Therefore even though tone cannot be used to determined bias, Denis does not bother to test his hypothesis. Denis’ financial bias combined with the fact he has no interest in understanding or exploring Gartner’s or Forrester’s bias. Denis wants the fact checking we do to be wrong, does not want to invest time in bringing up specifics, and will lose any debate on the topic. Therefore he states that something sounds like it must be biased.

SAP Resources Being Triggered

The following comment again claims that the articles are too angry.

I feel the same way. Any valid points those articles bring quickly get drowned in the sea of misplaced anger. Must be some story there, I’m actually curious what did SAP ever do to Shaun – Jelena Perfiljeva

This is our response to Jelena.

It is quite convenient that you also point to the questions of tone. My observation is that you can’t contradict the points. You are like Barbel an ABAPer. You would not have the domain expertise to contradict the fact checking in the articles as only a relatively small portion of the Brightwork content covers ABAP. And even if you where to put the effort into analyzing it, you would not publish anything that contradicts SAP, because of your financial incentives.

However, you do know that you don’t like the content because it critically analyzes SAP which you don’t want. Do you know who Barbel relied upon for validation on the HANA material, Paul Hardy, another ABAPer who knows nothing about HANA, and also made a number of false claims about what Brightwork has said and then refused to debate any topic. Paul Hardy’s reading comprehension has him concluding that we think stored procedures don’t speed performance. There is nowhere Brightwork ever published this. I would know. Why Barbel would ask another ABAPer to validate HANA statements I have no idea.

Secondly, your presentation of Brightwork makes it appear that we only fact check SAP. That is not correct. Here is our coverage of the How Real is theOracleAutonomous Database. We concluded that Oracle is pulling one over on customers. Is that a problem for you also? Or did you stop reading because the article was just too angry? Do you need a safe space? Well here is one at South Park.

Bulletproof Windows…In My Safe Space

Here is our coverage of Why Gartner and Forrester Do Not Want TCO Calculated.

Once again, is that true or false?

Or is it not possible to determine because we all “feel” there must be an inappropriate tone against Gartner or Forrester? Can any statement by any major IT entity be fact checked, or is all fact checking evidence of a personal vendetta or of “anger?” Well how convenient. No need to address the actual content as long as one can tap out because the tone is not properly “safe.”

Fact checking multibillion dollar revenue per year entities is just so “mean.” How will Hasso Plattner’s personal fortune every recover from such indignities? How about Larry Ellison? Sure he is worth $72 billion, but he probably got his feeling hurt when we called out the Autonomous database. I hope he is ok. Should Brightwork send him a fruit basket and a get well card?

The characterization of every commenter on this blog post, seems to confuse critical analysis with either vendettas or anger. And the conclusion is that we only fact check SAP, we don’t.

We fact check many entities in IT.

We are virtually the only independent source, and we expose the reality of things in IT. We are not paid by SAP, Oracle, Gartner or any other entity. So we are going to publish what we think is true — not what makes the people on this blog post “happy.” It seems as if we were corrupt and were paid off by SAP, and distributed SAP press releases from SAP as does ASUG or CIO, that we would immediately make everyone on this thread overjoyed.

Conclusion

SAP resources want information about SAP to be published entirely by corrupt entities that are paid by SAP. This is why we created the article and the poll, Poll Results: Should Brightwork Sell Out to SAP?

The answer from SAP resources is yet, and they want Brightwork to publish the same false information that is published by ASUG or CIO or Gartner about SAP. The only acceptable information about SAP to SAP resources is positive information that repeats whatever is claimed by SAP.

The Necessity of Fact Checking

We ask a question that anyone working in enterprise software should ask.

Should decisions be made based on sales information from 100% financially biased parties like consulting firms, IT analysts, and vendors to companies that do not specialize in fact-checking?

If the answer is “No,” then perhaps there should be a change to the present approach to IT decision making.

In a market where inaccurate information is commonplace, our conclusion from our research is that software project problems and failures correlate to a lack of fact checking of the claims made by vendors and consulting firms. If you are worried that you don’t have the real story from your current sources, we offer the solution.

References

Search Our Other Accuracy on SAP Content

How Competitive an Option is SAP Analytics Cloud?

Executive Summary

  • SAP has made a big push for customers to migrate from Business Objects to SAP Cloud Analytics.
  • In this article, we analyze the wisdom of using SAP Cloud Analytics.

Introduction

This graphic is from SAP’s Cloud Extension Program. SAP compares the SAP Analytics Cloud, Tableau is expensive and owned by Salesforce, which is a faux cloud vendor that locks in customers, and Power BI is produced by Microsoft, another of our lowest-rated vendors. One should be purchasing only the bare minimum from these vendors as they perform similar tricks on customers as SAP and Oracle (although certainly not as egregious). Of course, due to some core products, it is challenging to get off of Microsoft entirely. But if one can restrict purchases to the Office Suite and some SQL Server instances, then this is a big win.

SAP Analytics Cloud Competes With Top Visualization/Analytics Solutions?

Tableau is a leader in the visualization category; Power BI is close behind at a much lower price. SAP Analytics Cloud is still being developed and not a competitive solution. This means that SAP Analytics Cloud will be both worse to use than either of the other options, and the implementation cost will be far higher. This is particularly true for Power BI, which is carving out a low cost and high impact part of the market — and was a significant factor in cooling off Tableau’s growth and making them an acquisition target by Salesforce.

SAP proposes to sales reps and partners that SAP Analytics Cloud is something that it isn’t. SAP claims equivalence with Tableau or at least strongly implies this. See for yourself in this SAP Analytics Cloud video. 

Notice again that SAP is creating a burning platform by stating BO Explorer, Dashboards, or Xcelcisus are at the end of life.

SAP’s claims praising SAP Analytics Cloud do not match our evaluation of the product. We consider SAP Analytics Cloud completely uncompetitive with either Tableau or Power BI, or any other of the essential visualization tools. And as we will discuss further on in the article, we don’t even recommend Tableau or Power BI.

Secondly, both Tableau and Power BI are not competitive with pure cloud analytics offered by cloud service providers. The idea that anyone would purchase a five-year subscription from SAP for such a low rated product is a joke.

Notice the option below.

This is AWS QuickSight pricing. Notice it is “real cloud” in that the terms are monthly.  And it is extremely low cost at only $18 per month per user.

A few questions naturally occur to us…

  • Why would anyone pay hundreds of thousands of dollars to SAP for a substandard immature product with a five-year term?
  • Why would any company allow its support contract (which should be canceled if BusinessObjects is being “end of lifed.”

QuickSight is also connected to AWS’s backend data warehouse. Eventually, the company could move entirely off of the BusinessObjects data warehouse (using Redshift, for instance) onto AWS as well. 

Working Sans Sales Rep

We did not have to deal with any sales rep to spin up a QuickSight instance. We just went out to AWS and brought it up.

If these types of visualization tools are available so quickly and are so good, what is the motivation to purchase through a sales rep and deal with any of that overhead? It seems that so many IT decision-makers that work in SAP accounts do not know what is available to them quickly at web service providers. Any data that is in the BusinessObjects Universe can be easily uploaded to Quicksight.

Overall, QuickSight is easier to use, is quicker in response, is far more mature, creates more compelling analytics, and is simply a superior application versus SAP Analytics Cloud. And all of that is before even counting the considerably lower price, better terms, and enormous backend capabilities of AWS.

*An option we will look at in the future is Google Cloud Looker. However, the Looker acquisition is still relatively recent, so we will hold off until some more time has passed, and Looker is better integrated into GCP. 

Conclusion

SAP Analytics Cloud is an inferior option and is uncompetitive versus many other options. SAP is trying to migrate Business Objects customers to the SAP Analytics Cloud, but the two solutions have nothing to do with each other. One can now access superior analytics solutions right on AWS at a tiny fraction of the cost charged by SAP, and these can be accessed on flexible terms, terms that SAP will not offer its customers.

Essentially the SAP Analytics Cloud does not meet the definition of cloud in its terms.

The Necessity of Fact Checking

We ask a question that anyone working in enterprise software should ask.

Should decisions be made based on sales information from 100% financially biased parties like consulting firms, IT analysts, and vendors to companies that do not specialize in fact-checking?

If the answer is “No,” then perhaps there should be a change to the present approach to IT decision making.

In a market where inaccurate information is commonplace, our conclusion from our research is that software project problems and failures correlate to a lack of fact checking of the claims made by vendors and consulting firms. If you are worried that you don’t have the real story from your current sources, we offer the solution.

References

Search Our Other Data Warehouse Content