The Lost ERP Path

The power of the SAP monopoly

SAP dominates the ERP market like no other company. Due to the complexity of the subject, SAP is also protected from any anti-trust or monopoly commission. Of course, SAP has a monopoly in the ERP market, which made it easy to establish an unfinished database as the new standard. Now SAP is pushing its customers into the cloud and promising AI functionality.

The fact that SAP customers are dependent SAP's goodwill has led to mistrust and a lack of communication. It seems that SAP is going its own way to optimize its share price and no longer considers the interests of customers and partners. As a monopoly ERP vendor, SAP has more freedom than many hyperscalers, who are in constant competition with each other. With the power of its monopoly, SAP has not always made things easy for customers over the past decade. Many partners and customers believe rectifying this is long overdue, however, financial analysts are rejoicing, and the share price is proving SAP CEO Christian Klein right.

The end of the ERP road

ERP software such as SAP ECC 6.0 is probably at the end of its life cycle. ERP software, as the SAP community knows it, is a discontinued model. Obviously, S/4 and the Hana database are not an adequate replacement. Many SAP customers are switching to S/4 Hana due to a lack of alternatives and innovation. The established SAP competitor or the young start-up is still missing. SAP customers are occasionally switching to specialized and niche solutions, but the SAP monopoly is safe for at least another five years. The S/4 conversion will be completed around 2030, at which point the discussion about an S/4 Hana successor will begin, because no one in the SAP community will be interested in the S/4 continuity guarantee until 2040.

However, the next generation of ERP needs to be more open, agile, public, and transparent. Cloud computing can be a helpful operating model for many areas of ERP. Generative AI will design new architecture models for business structure and process organization from the outside. A public cloud system as a black box, as envisioned by SAP, cannot and will not exist. The public cloud as an ERP monopoly and SAP R/3 successor is absurd and short-sighted. Sooner or later, every public cloud will become an ERP multi-cloud with different providers.

Platforms as ERP correction

If SAP continues on its current ERP path, the monopolist can only lose. This means a correction is overdue and already visible on the horizon: Business Technology Platform, or SAP BTP.

BTP is still a long way from being a viable platform for future ERP systems, but SAP has about five years left for this metamorphosis. The ERP world is becoming more agile, colorful, noisy, and transparent. For an S/4 successor beyond 2030, users need a comprehensive platform. SAP BTP has the opportunity to both consolidate an overdue SAP correction and open up new ERP paths to 2050.

The jury is still out on whether SAP BTP will be a successful ERP fix. There are still many technical and licensing issues as well as conceptual gaps in the Business Technology Platform. SAP's own strategic view of BTP is also still unclear. The ERP monopoly is trying to sell as many BTP services as possible. SAP has so far refused to engage in a holistic discourse about a ten-year BTP roadmap. However, there are executives at SAP who are concerned about the direction the plan is taking, but they are not allowed to speak publicly—rectifying this is long overdue!