Global CIO: SAP's Weakness Is Customer Execution, Exec SaysGlobal CIO: SAP's Weakness Is Customer Execution, Exec Says

"We have more innovative research-oriented people than any software company or hardware company that I've ever met in my life—maybe even too many of them?" Merritt mused.

"The challenge has been in execution: it's not a problem of seeing trends, it's not a problem in creating innovation, it's in driving it through to completion in the market with satisfied and successful end users."

If I had to pick one of those as the main objective for SAP to pursue relentlessly, I'd pick Merritt's. Sure, Plattner's got the massive piles of SAP stock and the fancy title, but Merritt nails the issue when he says that SAP is not sealing the deal out in the marketplace by creating vast legions of excited and delighted end users. (SAP seems to have this peculiarly split view of "customers" on the one hand and "end users" on the other—Plattner refers to that second group as "employees of our customers"—so reconciling those two views into one might be a good addition to the company's 2010 performance-improvement plan.)

Presaging Merritt's view that SAP can never be fully successful unless its customers are successful, Plattner said in his comments a few weeks ago that profitability without highly satisfied users in just about impossible to achieve.

"We are a public company, and profit is everything," Plattner said in early February at the close of his prepared remarks. "But in order to be profitable, it needs to be a happy company. I will do everything possible to make SAP a happy company again.

"And in order to become profitable and please the shareholders, to achieve this we have to focus on our customers and we have to make the customers and their employees happy as well."

Based on some SAP megadeals to which Merritt alluded in his comments last week, some customers are convinced that SAP will do just that: make them very happy indeed. Referring to the past 18 months, Merritt said this:

"Certainly the volume of huge deals was off and I don't see a huge spike in $20 million, $50 million, or $100 million deals of old coming through, " he said. "But we had a consistent trickling every quarter of big deals as some companies were willing to make $20 million, $50 million, or even $100 million future spend commitments with SAP."

In a number of those cases, Merritt said, the customers were looking to replace a decades-long compilation of dozens or hundreds of applications with a unified suite:

"We saw some really interesting deals in Q4 where we did enormous transactions with companies that were trying to take a smorgasbord of different solutions that they'd had over the past 10-20-30 years, including some mainframe solutions, and consolidate on a single SAP framework."

Going forward, he said, growth will frequently involve customer deals where BI and SaaS play a big role:

"The emerging mid-tier is business intelligence, information optimization, and all of those related components and then, next-generation collaborative business-user-focused apps is I think the early emerging incubation: super-high growth, but a low base to grow from," Merritt said.

"Where I see most of the high growth coming, which is what gets that hyperbole and pendulum swinging the way it does, is lines of business users have increasing influence over what technologies they would like to use, given that much of it is SaaS-based and doesn't need to go through IT any more.

"And a huge chunk of their needs that are not transactive in nature are still unfulfilled and so there's an amazing amount of white space for all of us for what we do every single day to be automated: e-mail, spreadsheets, Powerpoint, document tools and such that could be automated in a much more efficient way. That's an important area and I think SaaS is most important in that business-user area."

Not exactly the stuff that makes up deals sized at $50 million or $100 million, but what's refreshing about Merritt's perspective is that he seems to be willing to see the world through the eyes of SAP's customers, which is a skill that SAP executives seem to generally lack.

So that's a little comparison between some of Merritt's observations and those of Plattner—what will be even more interesting is to see what SAP's two new co-CEOs, Jim Hagemann Snabe and Bill McDermott, talk about in their coming-out party later this morning.

We'll be covering it closely, and one thing in particular I'll be looking for in these times of high change at SAP is whether its top executives seem to be closing in on that rarest of instances: a single version of the truth.

RECOMMENDED READING: Global CIO: An Open Letter To SAP Chairman Hasso Plattner Global CIO: SAP's Last Chance: It's The Customers, Stupid! Global CIO: SAP Blows Huge Opportunity With Timid Support Changes Global CIO: Why SAP Won't Match Oracle's 22% Maintenance Fees Global CIO: Where Do Oracle's Profits Come From? Global CIO: SAP Is Testing Flat-Rate Pricing For Large Enterprises Global CIO: An Open Letter To SAP CEO Leo Apotheker Global CIO: Will Oracle Or SAP Blink First On 22% Maintenance Fees? Global CIO: SAP Eliminates All-Up-Front Payment Requirements Bob Evans is senior VP and director of information's Global CIO unit.

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