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Insight on technology and life from SAP Co-CEO Bill McDermott
Posted by Prof M. Eric Johnson on February 08, 2011 | Comment (26)
I had the great fortune to host Bill McDermott (SAP’s Co-CEO) during his visit to Tuck this week. As the largest enterprise software firm on the planet, SAP faces many challenges and opportunities. Bill tackled hard student questions head-on with a warm, authentic personality that captivated the Tuck community. Here are my three takeaways:
As a standalone player focused purely on software, SAP is embracing it’s ecosystem of partners to make its offerings easier to implement and use. Starting with the costs to implement, SAP is working to reduce the typical 6:1 ratio of implementation to software cost. Bill noted that typical enterprise CIOs spend 80% of their budget just keeping the lights on. SAP would like to cut that in half, helping their customers’ focus more of their IT spend on innovative initiatives that drive business growth.
Looking ahead, SAP sees mobility as a game changer for enterprise systems and is focusing both development and M&A activity (think Sybase) to get there first.
On life, Bill reminded the students that passion is the key to success. He also told them not to be afraid of pain. Recounting how he preserved through a seemly bad career decision, he emerged from the “pain cave” with a stronger sense of self. “It is those painful experiences where you really learn who you are, what is important, and what you really care about.” Finally, he urged the students keep in mind that life and business leadership is a “short visit.” So “don’t just be great at the office – be great at home.”
View video interview with Bill >
26 comments so far
Bill McDermott in his upbeat remarks made it clear SAP is truly listening to their customers and focused on delivering real and recurring value. He and his Co-CEO are betting the future of SAP on “choice in an open ecosystem”. He opened himself up to questions and comments and left a positive and lasting impression.
I enjoyed the talk very much. As a former SAP employee, I still have great interest in SAP’s development, of course. What impressed me most was Bill’s clear vision regarding SAP’s strategy for growth. His point about “real real-time” and being able to offer a variety of new solutions (e.g. in-memory analytics) even to the large enterprise segment was very convincing. Attending his talk was a great experience.
Bill McDermott was engaging, funny, thoughtful, and very passionate about his industry and SAP. He also shared life lessons and leadership lessons that “work” across all ages, industries and sectors. It was a unique pleasure for Tuck to host Mr. McDermott.
Bill’s business vision thoughts on leadership were great to hear, but I appreciated most his very candid closing comments on balancing work and life. It’s great to hear from someone who has clearly succeeded at business give the advice that suceeding at home is just as important as suceeding at work.
Sara, I enjoyed your video interview with Bill. I am especially impressed by their “triple play on sustainability:” how SAP strives to help companies run more efficiently, societies realize sustainability and the world run better. http://www.youtube.com/watch?v=nd5YaIzEPPU
Bill has shown the students the right business leadership qualities. At the end his advice to be great at the home is really touching.
Great talk by Bill. I was particularly interested in the shift in enterprise software from managing transactions (“keeping the trains running”) to the strategic use of real-time data to enable business intelligence in operations, marketing and other functions. I anticipate lots of opportunities and challenges in figuring out how to extract actionable insights from the mass of data. Should make for a fascinating decade as it all plays out.
I really enjoyed that talk. Bill gave us a lot of interesting insights on SAP’s mission in the world, and its positioning relative to Oracle. SAP’s strategy centered on mobility was also great to hear because mobility is a common denominator between developed and emerging countries, and emerging countries will fuel SAP’s growth in the coming years.
There is a Feb. 10, 2011 article in Information Week “Gartner Ranks Data Warehousing Leaders” at this web address: http://www.informationweek.com/shared/printableArticle.jhtml;jsessionid=2X5IDWUKDKFCNQE1GHPSKH4ATMY32JVN?articleID=229215658 Generally this article is favorable to Sybase and Sybase IQ business intelligence. I think buying Sybase in 2010 was a good strategic decision for SAP as is SAP’s decision to focus on creating a mobile interface. The Sybase column-store architecture is a big plus that offers a performance improvement not offered by IBM or Oracle.
As I see it there are a number of challenges and opportunities for SAP.
(1) Historically SAP operational implementations required that the user conform to SAP’s system and not the reverse. It was difficult to tailor SAP to each company - you have to comply with SAP’standards and restrictions. However as far as I can tell most companies want to tailor their operational systems for competitive advantage.
(2) Second Oracle holds about 48 percent of the relational data base management system (RDBMS) marketplace. I wonder how successful SAP is in selling to those companies that already have what the majority of the marketplace uses for RDBMS - Oracle or IBM’s DB2.
(3) The great unsolved problem for SAP and its competitiors is how do you provide business intelligence that responds instantly or within a day or two to the many users of business intelligence who need their answers fast so they can take action on what they learn from their business intelligence queries? You can develop standard queries for users but business intelligence queries are most often unique. Today you might need an army of programmers to structure unique queries for many users quickly. At a minimum you need a rapid application capability like in IBM’s meta5 software that enables programmers to create an inquiry the same day or within a day or two (originally they thought the meta5 rapid application capability was simple enough that users could create their own inquires but that didn’t happen). Although the capability doesn’t exist yet in the long run the best answer is to enable the user to “create” his/her own business intelligence inquiry in English (or whatever language they speak).
4) In 2009 Bob Evans wrote an article in Information Week with this observation ” I don’t see Oracle as your top competitor. Rather, SAP’s top competitor is cloud computing and SaaS and rapid and lightweight deployment and automatic upgrades and low up-front expenses and shared risk and Salesforce.com and SuccessFactors and Workday and NetSuite and many many other small, nimble, and highly successful companies who are giving the market what you don’t have: speed, simplicity, predictability, lower costs, and a deeper sense of partnership and shared commitments.”
Congratulations to SAP for buying Sybase and making it a key part of their strategy. That move is a big step in the right direction. Adding mobile capability is another.
The article by Bob Evans in Information Week mentioned in my earlier comments under #4 was in the February 10, 2010 issue of Information Week and not in 2009.
Bill McDermott’s talk at Tuck was inspiring, from both a business and personal perspective. Bill and co-CEO Jim Hagemann Snabe have dedicated SAP to helping the world “Run Better,” including leadership in sustainable business practices and solutions.
Bill highlighted key aspects of SAP’s strategy, including: (1) enabling the real-time enterprise…through revolutionary in-memory computing; (2) mobility…connecting 6.5 billion mobile workers to enterprise systems by 2014 with the SAP Sybase Unwired Platform; (3) innovation…leveraging an ecosystem of 350,000 partners innovating on-premise, on-demand, on-device, and orchestrated at the process, data, and security levels.
It was great to hear Bill’s advice on personal leadership and life: (1) a compelling, customer-focused vision, like Dr. Kim’s vision for Dartmouth on e-health care to improve health outcomes at lower cost; (2) great teams…and Bill encouraged the Tuck students to consider a career at SAP to help innovate the future; (3) customer value…benchmark and continually teach how to “Run Better”; (4) innovate your business model leveraging IT for competitive advantage…SAP sees mobile as the future; (5) focus on results…have a 5-10 year vision, write down your goals, stay true to who you are; (6) balance…be as good at home as you are in your work.
As a Tuck grad, and in my role with SAP University Alliances, I’d like to thank Tuck for providing an opportunity for Bill to share his perspectives and vision, and start what will hopefully be a strong and continuing relationship!
I am Shin, T05 and took a look at the video. Just based on video, I just wondered how they have been implementing the integration (usually it:‘s very tough to align incentives to collaborate and at the same time to give autonomy). I also wondered how the company respond to the cloud computing (yes, this is just getting over the peak of hype-curve, but still there is some kind of opportunities around it), i.e. what kind of loadmap or postponement strategy they have. He might have mentioned them during the interview, but it would be nice if the video is longer.
There are a lot of companies and businesses needing workers and employees with knowledge in SAP. SAP means systems, applications and products in data processing. It is a system that runs language programming and has features that are better compared to other modern programming languages.
SAP listens to their customers and has a cohesive strategy.
SAP will change the whole business….Before implementing the study is must. It will definitely work in organization to cut down the expense.
SAP may be a giant, but don’t let that fool you. I believe they are going to embrace technologies and strategies that are going to make their products shine. Whether it is traditional apps or cloud computing, don’t write them off just yet.
Bills leadership quality will make a good impact among the students. His advice to great also at home is good and it will awaken those workacholics.
Think about what you’ve read so far. Does it reinforce what you already know about health care to improve health outcomes? Or was there something completely new? What about the remaining paragraphs?
Very nice and informative post.
Think about what you’ve read so far.
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