With a change in leadership, SAP North America continues its own transformation in the era of cloud computing. On September 1, Lloyd Adams became president of SAP North America after being a veteran with the company since 1998. He most recently served as SAP’s managing director of the East region of the United States.
His new role is expected to include coaxing SAP customers to get on board with the cloud in order to remain competitive at a time when SAP also is cementing its place in a new digital landscape. For example, as much as SAP works with the likes of Microsoft, in some ways they are also competitors.
Adams spoke with InformationWeek about the road ahead for himself, SAP, and the cloud-driven market.
What are your personal marching orders in your new role, and with the effort to bring more companies to the cloud, is there some kicking and screaming resistance that you face?
Coming out of the last couple years with the pandemic and regardless of industry and market, digital transformation, in more cases that not, is no longer a “nice to do.” It’s really become a mandate. COVID hitting the way that it did, regardless of your industry, your size, the markets you serve, it was a fundamental shift. Not just from an SAP perspective, across our entire ecosystem, the best ways to do it and where you could gain the most efficiencies and do things in the most agile and cost-effective way was, in more cases than less, cloud.
It’s fortuitous based on where SAP’s been heading as a company by way of acquisition, in terms of point solutions around the edges, as well as where we were taking the core offering through in-house development, and then also our whole business transformation as a service offering — RISE with SAP — in concert with our entire ecosystem to help organizations to catalyze that journey.
If we were having this conversation maybe five, six years ago, you might ask are there certain spaces or verticals that have been reticent to go in the cloud direction. I think at time there were a few spaces. Now though, even before COVID hit, clearly in each and every vertical we serve the move is there. When you look within each industry, there are organizations that are leading the way as well as some who are fighting it tooth and nail. In more of those cases, it’s the whole notion of change management that’s really difficult to grapple with. They know what they need to do; it’s really the how, the when, and at what pace.
The biggest thing that SAP is still in the midst of transforming — it’s definitely trajecting where we need it to but still has a bit of ways to go — as we pivot from our legacy on-premise business, the way in which we solution and deliver and help our clients adopt and consume what’s coming into the organization is as optimized as possible. That is one of the biggest things that is different in the cloud paradigm and one of the things we as an organization and one of the things I am trying to amplify here with the North American team is that as we do things increasingly more cloud-centric, we’d always have to start with consumption in mind. It’s not enough to just demonstrate what the art of the possible is. We have to go beyond and clearly articulate what impact this is going to have on the business, the best way to use this even if that means the manner in which business is conducted and things are done at the task level are different.
Has the competitive landscape for SAP changed with the orientation of moving to the cloud? Who are you rubbing elbows with? Who are you butting heads with? What has that dynamic become?
In some respects, some of our competitors have been our competitors for a while and remain our competitors. When you think about some of the acquisitions that we’ve made in certain discrete line-of-business areas, obviously moves like that have brought us closer to competitors that maybe we didn’t face as fiercely prior to bringing some of those things into our portfolio. What’s also true is if you think about a Microsoft, a huge organization and in certain parts of the market we may compete on certain offerings, but as it relates to RISE and the partnership we have with Azure, it’s brought our organizations so much closer together. It’s kind of a mixed bag. As somebody who’s been here for 24 years, certainly the competitive landscape looks quite different now than it did back in 1998.
How much of an effect do pricing and cost have for organizations who remain naysayers or are simply reluctant to move to the cloud despite its benefits?
It’s all about business value that we can demonstrate that we can help a client achieve in whatever part of the business we might be supporting. With that, invariably in any market, in any industry, regardless of company size, these are big decisions. Even in organizations and verticals that despite recent times are doing quite well, everybody is inspecting this with a fever pitch. These choices aren’t made lightly. These are such important decisions, the leadership, IT and business, a lot of these decisions go to the board for approval.
Many times, there might be board members who have been in their respective positions for a period of time, and they’ve heard stories of SAP-centric stories, competitive-centric stories where these transformations have brought great business value, they have in some cases been expensive or the timeframes have been elongated. We face that all the time so it’s incumbent on us to really articulate not just what the tech and capabilities are and how they can best be adopted and consumed when they come in, but at the point of decision, perhaps most importantly the different agile ways they can be deployed and implemented. In the cloud paradigms that looks markedly different than previously in longer, stretched out, on-premise implementations. That’s incumbent on us, and other competitors in our space, to make clients understand this is going to be different.
These things don’t happen on their own, but they needn’t be as onerous, and heavy, and expensive, and as time-consuming as maybe they’ve been in the past.
How much influence do enterprise customers have on pricing as they shop around? How much effort do you foresee for yourself to convey and educate them on cloud-based resources?
Customers who have been clients for a while, who knew us when we were kind of only in one zone, have over time moved some of their capabilities to the cloud and in some cases all of them. More often than not, some of the folks involved from an IT, a finance, and a procurement and sourcing perspective knew one paradigm not just from an implement and deploy, but also from a commercialization and pricing perspective and things do look different in a cloud paradigm. That’s been part of the education journey, in some respects.