cloud strategy deep dive at sap -...

Cloud Strategy Deep Dive at SAP Walldorf, September 15th, 2014

Transformation into a Cloud Company Session with Bernd Leukert, Member of the Executive Board of SAP SE, Products & Innovation and Helen Arnold, CIO & Head of Cloud Delivery

3 © 2014 SAP SE or an SAP affiliate company. All rights reserved.

Simplify consumption with SAP Cloud powered by SAP HANA

SAP HANA Platform

Applications Analytics

BEST PRACTICE

Processes

COMPANY SPECIFIC

Processes

Public Cloud

HR, Customer Experience,

Procurement, Finance

Industry and

Managed Cloud Core, Logistics, Business

Suite, Business Warehouse

© 2014 SAP SE or an SAP affiliate company. All rights reserved.

Extention

s

Platform

Partners &

Startups

Simplified User Experience

4 © 2014 SAP SE or an SAP affiliate company. All rights reserved. © 2014 SAP SE or an SAP affiliate company. All rights reserved.

Endless opportunities on a consistent enterprise core

Simplified Infrastructure:

• One Platform

• One User Experience

• One Core

• Directly on granular data

• Massive processing power


SAP Simple Finance

Comprehensive

Simple

Flexible

Financial Planning and Analysis

Develop and Translate Strategy

Planning, Budgeting and

Forecasting

Profitability and Cost Management

Monitoring and Reporting

Accounting and Financial Close

Accounting

Entity Close

Corporate Close

Reporting and Disclosure

Financial Close Governance

Treasury and Financial Risk Management

Payments & Bank Communications

Cash and Liquidity Management

Debt & Investment

Management

Financial Risk Management

Commodity Risk Management

Collaborative Finance

Operations

Receivables Management

Collaborative Invoice to Pay

Travel Management

Financial Shared Services

Enterprise Risk and Compliance

Management

Enterprise Risk Management

Controls & Compliance

Management

Access Governance

International Trade

Management

Fraud Management

Audit Management

© 2014 SAP SE or an SAP affiliate company. All rights reserved. 6 © 2014 SAP SE. All rights reserved. 6

Internet of Things



SAP Cloud Delivery – The Customer Journey


SAP HANA

SAP HANA Enterprise Cloud SAP HANA Cloud Platform Line-of-Business Apps

(On Premise) Private Cloud (Managed) Public Cloud

Managed-Cloud-as-a-Service Platform-as-a-Service Software-as-a-Service

Customer Systems

People Customer

SAP Business Suite

SAP Business Warehouse

SAP HANA Datamart …

Build Extend Run

applications

Finance Supplier

Custom infrastructure and

maintenance

New Apps Collaboration

People

SAP Jam Soccer

Health

Consumer

Startups

Business

Ariba

Commerce

Hybris

Any

DB

Integration

leads to new and innovative business processes


Thank You!

Cloud Strategy from a CFO perspective with Luka Mucic, Member of the Executive Board of SAP SE Chief Financial Officer and Chief Operations Officer

© 2014 SAP SE or an SAP affiliate company. All rights reserved. 11

Agenda

• The main developments in the cloud market

• SAP’s business model as THE cloud company based on SAP HANA

• The impact of this transition for the company’s financials


5B middle class

growing to 5 billion

will strain resources

30B devices wirelessly

connected to the

internet of everything

by 2020

Data Doubling

every 18 months create

opportunities

and risks for value

creation

75% New enterprise IT spend

will be cloud-based or

hybrid by 2016

Millennials will transform customer

demands and the

workplace

1B people in social network

will rewire business

and personal

boundaries

New + Disruptive

business models

will accelerate change

and innovation

Innovation in the digital world


Influence buying

behavior

Deliver a 360 view of

the customer

Improve overall

engagement Grow lifetime value

Align people with goals

and objectives

Increase customer

satisfaction

Increase operational

efficiency

Deliver 360° view of

spend and vendor

relationships

Discover new business

opportunities

Enable employees to

develop themselves

Accelerate time to

productivity Reduce COGS

Customers seek outcomes not products


Complete, integrated functionality –

delivered the way customers want

SAP offers broad choice to the customer

Solutions

Packaged

Custom

Deployment

On Premise

Cloud Private

Public

Managed

Licensing

Perpetual

Subscription

Consumption

Desktop

Mobile

Run all SAP

solutions

on SAP HANA

Leverage SAP Cloud

Build, run, deploy all

applications in the

Cloud

On Premise

BA

BW

Bus.

Suite

3rd

Party

Apps

Hybrid

SuccessFactors Ariba

Cloud

Flexible deployment options


Industry Portfolio (including SAP Business Suite)

LoB Portfolio (HR, Finance, Procurement,

Sales, Service & Marketing)

SAP HANA Cloud Platform

Analytics (BW, BI, EPM, GRC,

Big Data)

A “Suite” of best-of-breed cloud

3rd Party

Apps (on HANA Marketplace)

Our cloud strategy – SAP Cloud powered by SAP HANA


Simplify customer engagement

SUPPORT PROSPECT SELL DELIVER

• One solution per

business problem

• One face to the

customer

• One service

• Cloud delivery

• One support

• SAP HANA as a

platform

• One digital

experience

• SAP universal

profile


Shift to cloud subscription model

What it looks like for a typical deal

OnPremise model

simulation

Cloud subscription model

simulation

Year 1 Year 2 Year 3 Year 4 Year 5

SSRS Revenue

Deal Margin

Typical software contract value €1m, 22%

maintenance (Enterprise Support) 1.0 + 0.22

0.22 0.22 0.22 0.22

Contract value €1.35m (due to less

discounts), three years contract duration,

provisioning and revenue recognition starts

3 months later


0.45 0.45 0.5 0.5

0.35


Shift to cloud subscription model

What it looks like for a typical deal

OnPremise revenues

Cloud revenues

OnPremise Deal: SW+Maintenance

Cum. Revenue (in m€)

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

Y7 Y6 Y5 Y4 Y3 Y2 Y1

2,3

1,8

NPV based on

revenue in m€

(8% WaCC)

Revenue

break even



Cloud Deal: Subscription & Support


Note: non-IFRS at constant currencies

Combined total revenue ambition

>22.0 Recurring revenue in

b€ Non-recurring revenue in

b€ 16.9

2017 2013

Cloud revenue ambition

Total cloud revenue (b€)

1.0

3.0 – 3.5

2013 2017

57%

~65%

Impact of the shift to cloud on mid-term outlook Powerful mix shift to high growth, high margin predictable recurring revenue


SAP – a Leader in the Cloud

Industry’s

largest base of

Cloud users

More business

professionals use Cloud

solutions from SAP than

from any other vendor

on the planet.

Industry’s most

comprehensive

Cloud portfolio

Market-leading public apps

(#1 in HCM, Procurement,

Business Networks and

Social Collaboration)

covering all lines of

business

The leading

social business

platform

More users than Chatter,

Yammer, etc.

The largest and

most global

business network

1.55 million connected

companies in 190 countries

transacting over half a

trillion in commerce

annually. - the size of any

other business network…

Largest business

Cloud

deployments

Some with about

2 million users.

Public, private and

managed service offerings

Annualized run

rate in Cloud

business

Just four quarters into new

structure

38M 30+ 15M ~2M 1.5M €1.2

B

HR & Industry Cloud Session with Simon Paris, President Industry Cloud


HANA

as the great simplifier

SAP HANA Enterprise Cloud

Change YOUR view of SAP One company - Three Business Models

Network Platform Applications

SAP HANA


DEVELOPMENT

Industry Centricity Field and Development Alignment

Strategic Industries • FSI

• Retail

• Public Services + Healthcare

• Telco

Core Industries • Consumer

• Energy & Resources

• Discrete Manufacturing

• Services

Industries

Develo

pm

en

t

Industr

y B

usin

ess U

nit

Sale

s

Active G

lobal S

up

port

Serv

ices

Glo

bal P

art

ner

Opera

tio

ns

Mark

eting &

Com

ms

7 Primary Domains

Integrated Operating Model

Incubation Industries

Lines of Business • Extended Supply Chain

• Finance

FIELD

Alignment


SAP leads the way to Industry Cloud by Industry and LoB

Industry Centricity High

High

LoB / Business Process

Complexity

Managed Cloud Hybrid Cloud Public Cloud Low

HANA Enterprise Cloud EXAMPLES

Conceptual


SAP leads the way to Industry Cloud by Industry and LoB


High


Complexity


HANA Enterprise Cloud EXAMPLES

Conceptual

Co-innovation

Projects

SCM

Financials

Student

Information

System

HCM

Procure-

ment

Event

Ticketing Product

Stewardship

Network

Coll-

aboration

T&E

CRM

Omni-

commerce

Retail

Core

Banking

Precision

Marketing

Remote

Service Mgt

PLM

MAN

Insurance

XXI

Circular

Authority

Bid

Mgt

Care

Circles

Financial

Services

Network

Internet

of Things/

Industry

4.0


We have a unique proposition SAP leads the way to Industry Cloud by Industry and LoB


High


Complexity


Every LoB Every Industry

Every Cloud Model Everywhere

Integrated – Consistent – Coherent - Localized

TODAY. TOGETHER.

HANA Enterprise Cloud


Any questions?

CE&C Session with Ariel Luedi, CEO & Board Director hybris and SAP President Customer Engagement and Commerce

© 2014 SAP SE or an SAP affiliate company. All rights reserved. 31 Internal

Simplicity of the past is gone

Store

Call Center Warehouse

Salesforce

Customer

Print Media

TV / Radio


Omni-commerce process complexity today

Order

Inventory

Product

Customer


OMNI-CHANNEL ORDER MANAGEMENT

DELIVER FROM STORE PHONE FOR HOME DELIVERY

FIND NEAREST STORE WITH STOCK

RESERVE ONLINE, PICK

UP IN-STORE

ORDER IN-STORE, FOR

HOME DELIVERY

CHECK STOCK IN STORE

ORDER ONLINE, RETURN

IN-STORE

VIEW IN STORE, SHARE

ONLINE

3RD PARTY ORDER

FULFILMENT

© 2014 SAP SE or an SAP affiliate company. All rights reserved. 34 Public

Customer engagement & commerce

Optimizing the omni-channel enterprise


End-to-end solution for customer engagement & commerce

Optimizing the omni-channel enterprise

APIs

SAP HANA

Other ERP SAP EWM Forecasting

Custo

me

r E

ng

ag

em

en

t C

ore

Op

era

tio

ns

Master

Data

Platform

Experience

Mgmt

Order

Management

Omni-Channel

Commerce Logic

Commerce & Experience

Platform

Web Analytics

Customer Data Mgmt

Event Engine

Mktg Data Mgmt

Relevance Engine

Mktg Execution

Social

(Mktg & Social Analytics)

CRM

Service

Campaign Mgmt

Media Optimization

CRM

Sales

digital

goods email digital ads web In

store/bra

nch

print contact

center

mobile social marketplace Search

kw/ads

agent

tools IoT sms/notificatns

@

commerce marketing sales & service

Invoicing

Billing


Business Suite


Platform CRM

Service

CRM

Sales

@

Integrated & complete

One solution – Run Simple


Business Suite


Platform CRM

Service

CRM

Sales

@

Standalone point solution

Many applications & integration points -> complexity & cost


CEC portfolio today

hybris PCM

hybris Commerce

B2C / B2B /

Marketplaces

hybris

Order

Management

Adobe

Marketing Cloud

CEI (ADT)

SeeWhy

SAP

Loyalty Mgmt

Jam Cloud for Social

Cloud4Service CRM OnPrem

Click

OpenText DAM Cloud4Sales CRM OnPrem

Vistex

Vendavo

@

SAP

BRIM

HANA / HEC / HCP

2.8B USD Revenue

Up to 300,000 orders a day

41 countries, 20 languages

8M nespresso club members

200 nespresso boutiques

Mobile (Web & App)

Web

Call Center

SAP CRM, SAP Retail, hybris B2C & B2B, PI


#

62% of B2Bs: eCommerce has fundamentally changed the way customers interact with us

Base: 353 online B2B companies around the world


Facts About Grainger

Founded in 1927

$6.2 billion in sales

18,000+ employees

2 million customers

1,300 suppliers

600+ branches

18 distribution centers

Access to 850,000+ products

United States, Canada, Mexico, Panama, China, Japan, India, and Puerto Rico

3.2 B online revenue

21% revenue increase

17% online Orders up

3% increased AOV

2 M customers

1 M products

500’000 orders a day

9.2 B total Revenue

Largest MRO distributor

750 stores, mobile, call center, catalog

20 SAP modules and components

500+ servers

14+ terabytes of data in ECC 6.0

10,000+ users

30 SOA Services


SEARCH &

NAVIGATION

IPAD APP

MOBILE

APP MERCHANDISING


Recommendations, Reviews, Forum

RATINGS AND

REVIEWS

RECOMMENDATIONS

FORUMS

CLICK TO

CALL


Glo

bal E

nte

rprises

SM

E

Retail Manufacturing

Digital Wholesale Telco

Strength across all segments and industries

http://www.portaltech.co.uk/portaltech-l-k-bennett-win-retail-systems-award

A CUSTOMER ENGAGEMENT SOLUTION MUST DELIVER HOLISTIC OPTIMIZATION FOR CUSTOMERS AND THE ENTERPRISE ALIKE.

SAP & HYBRIS PROVIDE THE ONLY SOLUTION THAT CAN ENABLE A TOTAL EXPERIENCE.

OUR GOAL IS NOT JUST TO BE THE BEST. OUR GOAL IS TO CREATE A NEW SOFTWARE CATEGORY.

The Business Network with Chakib Bouhdary, President Business Networks, SAP SE

© 2014 SAP SE. All rights reserved. 48

The capability to successfully operate within business networks will be the difference between winning and losing. For those willing to rethink their business and differentiate from the competition, the 21st century architecture is already here.

POWERED BY SAP HANA

Technology Platform Smarter, faster, predictive, real time

Applications On Premise / On Demand

Business Network Collaborative, Open, Intelligent

Built on a 21st century collaborative architecture Embrace the industry’s leading architecture platform for next-generation business performance


Supports comprehensive business collaboration Category management across the lifecyle

INDIRECT – (source and non source)

Source &

Contract

Collaborate

& Transact

Invoice & Pay

COMPLEX SERVICES

TRAVEL & EXPENSES

INTEGRATION TO SAP SYSTEMS AND NON SAP

CONTINGENT LABOR & SERVICES

DIRECT MATERIAL - LOGISTIC


The Business Network is the world’s largest business-to-business trading platform, used by more than 1.5 million companies to , transact over $700 billion of commerce annually . With many of their trading partners already using the service, companies around the world use SAP Business Networks to simplify inter-enterprise commerce and enhance their results. KPIs Includes Ariba, Quadrem, Bprocess, FieldGlass and exclude OnPremise

Size Matters: Scale is the Success of Business Networks Leverage the world’s largest Business Network

million Trading partners

1.5+ Of World Transactions

74%

million Documents

(PO + Invoices)

108+ million Timesheets

Processed

11+

million catalog items

165+ million Leads sent

to sellers

17

billion In Commerce

$730+

company Joins the network

Every 1.2

minutes

1 new

million Users

6.7

Customer Reference Exxon Mobil

Challenges

• Streamline PO collaboration with inventory suppliers

• Reduce the amount of paper invoices

• Ensure contract compliance for non-PO invoices

• Reduce costs by increasing number of sourcing activities

• Contracts being managed in disparate systems

• Interoperability with eight global instances of SAP

Approach

• Deployed Ariba to automate procurement of indirect materials

• Implemented paperless invoicing on a global scale:

• Automated exception handling/approval workflow

• Easily address global tax/regulatory requirements

• Implemented Ariba for electronic RFx process and for managing contracts

The Key Benefits

• Removed paper from the invoicing process

• Improved compliance for non-PO invoices

• Thousands of sourcing project and contracts managed

• Integration with eight global SAP instances

Ariba Solutions

• Sourcing

• Contract management

• Procurement

• Ariba Network

• PO automation

• Invoice automation

Company

Exxon Mobil

Headquarters

Irving, Texas USA

Industry

Oil and Gas

Employees

76,900

Products & Services World’s

largest energy company

Web Site

www.exxonmobil.com

98% PO invoices that are

paperless

4,000 Sourcing projects per

year managed in Ariba

15,000 Contracts in Ariba

$80- 120M Estimated annual sav-

ings based on analyst

benchmarks

SAP and Aramco proprietary and confidential | 51

http://www.exxonmobil.com/










Accelerating Payments

and Streamlining PO and Invoice Collaboration

through the Ariba Network

Business Challenges

• Eliminate manual, paper-based processing of POs and invoices

• Improve tracking of POs and change orders to eliminate delivery delays

• Increase visibility into invoice status

• Shorten lengthy invoice processing cycle times to accelerate payments

Results

• Enabled online catalog for approximately 140 items that reflects

• current pricing and product specifications

• Leveraged partial line-item and complete PO rejection features to improve the

order confirmation process

• Receive faster and more predictable payments

• Better visibility into invoice processing status

• Fewer errors and quicker dispute resolution

• Greater transparency and enhanced relationships with buyers

80% Reduction in

late/overdue payments

75% Increase in order accuracy

30% Reduction in days sales

outstanding

““With the Ariba Network, we have smooth and transparent transactions with

the buyers and fewer errors in ordering and delivery. More importantly, since

we started getting paid faster, we now have a positive cash flow.”

Mayette Yulo, Owner, Charles Seafoods Supply

Supplier Success

Charles Seafoods Supply

SAP and Aramco proprietary and confidential | 52

The Business Network with Tim Minahan, CMO SAP Cloud & LoB, SAP SE


THE Cloud Company Powered By SAP HANA


Finance Procurement HR

Marketing

Cloud for

Marketing

Omni-channel

Commerce

Sales Service

Cloud for Sales2 Cloud for Service

CRM on HANA

(for Industries)

CRM on HANA

(for Industries,

Billing & Revenue)

Human

Resources

Procurement Supply Chain

Management

S&OP Cloud

on HANA

Suite on HANA

(SD, MM, PP & PLM)

CFO Office

Simple Finance*

Business ByDesign

Simple Finance

Suite on HANA

(FICO), GRC

SCM, PLM &

Manufacturing

Cloud for Travel

& Expense

Social Media

Analytics

Managed

and

OnPremis

e

Public

Omni-channel Commerce & Customer Engagement

Collaboration SAP Jam, Business Network

Fiori User Experience + SAP HANA Realtime Platform Application Development, Integration, Database and Analytics, Foundation

Analytics BI (BusinessObjects), EPM, BW on HANA

SAP Cloud Portfolio Innovation and Agility - delivered in a unified approach


*

Adobe executed via partnership

Also available in Managed Cloud

Simple Finance will have a Public Cloud option for new Finance deployments available by year-end 2014

Simple Finance will also have a Managed Cloud alternative to FICO

© 2014 SAP SE or an SAP affiliate company. All rights reserved. 57 57 © 2014 SAP SE or an SAP affiliate company. All rights reserved. 57

Innovation Globalization Platform Industry

SAP Cloud Differentiators