What This Article Covers
- SAP’s Giant Product Database
- The Method of Counting
- Categorizing the SAP Products
- The Categorization Results
At Brightwork all we focus on is SAP. However, it is a full-time job keeping up with SAP! At one point we asked the question of how many products SAP actually had.
At one point we asked the question of how many products SAP actually had, and we just did not have a good answer to the question. Therefore we decided to take SAP’s product database and to code it and then count it to find out.
The Method of Counting
Counting how many products SAP has is more complex than it might seem at first blush. This is because SAP has many different products, some of which are part of the same product. For instance, SAP’s ECC application currently is divided into the following individual products.
- SAP ERP
- SAP ERP Core Finance
- SAP ERP Core HR
- SAP ERP Order to Cash
- SAP ERP Plan to Product
- SAP ERP Procure to Pay
However, this is all counted as SAP ECC. So is the right answer to count one product or to count six products?
We decided to count this is six products, only because it is consistent with how SAP has broken out its products in its product database. When measured this way, SAP currently as 309 products.
Categorizing the SAP Products
There are also many ways to categorize SAP’s product database. We were most interested in the following categories.
- Product Status?: (which we coded as either Active, Niche, or on Life Support). Active is the assignment to products that are being sold at a good to a reasonable rate. these are viable products that made up common discussion points on SAP projects and are common sources of conversation among those in SAP. The Niche assignment is for viable products that are rarely implemented. The Life Support assignment is for products that really don’t have any following.
- An SAP Product?: SAP acts as a reseller to quite a few products. So we wanted to draw the distinction between SAP products that are owned by SAP, and those that it simply resells.
- A Driver of SAP Revenues?: One of the main reasons we performed this exercise was to determine how many of SAP’s products actually drive revenues.
There is certainly some judgment in assigning these codes per product.
For instance, some products like Business Objects definitively in the “driver of SAP revenues” category, while other products are more questionable as to which category they fall into. We applied out judgment from our longtime research into SAP.
The Categorization Results
We found the following interesting features of these categories.
- Total Product Status by Category: Of the 309 products, 123 were assigned to the Active category, 31 are considered Niche, and 154 are on Life Support.
- Adjusted Active and Non Reseller Portion of Product Database: However, that overstates the actual number of SAP products in the Active category, because SAP is a reseller of 36 products that are “Active.” Subtracting the reseller products from the total number of Active products reduces that number to 87. This means that roughly (87/309) or 28% of SAP’s product database is both Active and not a resold product.
- Products that are Driver of Revenues: It made more sense to us to remove the products that are resold by SAP from the overall product database to develop this statistic. So there are 273 of (309 – 36) “domestic” SAP products. However, only 52 products are substantial drivers of SAP’s revenues. This means that 19%, or (52/273) percent of the product database contributes significantly to revenues.
SAP has the same issue which plagues supermarkets. They have too many SKUs. Having so many SKUs in so many areas of enterprise software means that SAP lacks focus. But this is the natural occurrence when large software companies age. Oracle also has too many SKUs.
- SAP’s second issue is that its biggest revenue producer, which is its ERP system is no longer in a growth phase.
- It has used the large profits from its ERP system to develop and to purchase the non-SAP software. However, that software does not provide the same returns as the ERP system did. SAP is increasingly having to rely on its support revenue and on legal tricks, such as indirect access to meet is earning goals.
- SAP is vulnerable, particularly in its non-ERP applications. This analysis helps us to gain insight into what SAP’s future behavior will likely be.
Who is the Most Accurate Source on SAP?
Want to find out? See... A Study into The Accuracy of SAP