'No innovation coming out of SAP' says Salesforce chairman

By Peter Gothard
31 Jan 2014 View Comments

Salesforce's EMEA chairman Steve Garnett slammed SAP today, telling Computing there is "no innovation, no growth and no love" coming out of the German business software company.

Garnett's comments came in retaliation to SAP CEO Bill McDermott's claims during the firm's Q4 earnings call 10 days ago that it would "go after Salesforce with everything we have".

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"I think Bill's comments were made out of frustration," Garnett told Computing.

"If you look at what's going on over there, there's no innovation coming out of SAP. Salesforce has consistently come number one in the Forbes magazine top companies list, and last I checked SAP was number 72.

"There's no innovation, there's no growth and there's no love."

Garnett pointed out that SAP admitted a two per cent growth slip in Q4 which did not compare favourably with Salesforce reporting its first "billion dollar quarter" late last year.

"We're seeing rapid growth and rapid innovation, and they're envious of what we're doing," said Garnett.

"There's no growth coming from SAP to their customers, either. Most of our major customers were SAP customers before they were Salesforce customers. And they chose with their pockets to come from SAP. To grow their revenues, they chose to come with Salesforce."

Garnett went on to suggest that SAP's high reported profitability came at the expense of its customers' wallets.

"When you run a company the way these guys do – by charging their customers in the traditional client/server way, it's highly profitable to SAP. We don't do that anymore. If I was an SAP customer I'd be challenging them instead of [watching them] bragging about how profitable they are.

"Perhaps they should be reducing their pricing, or coming into a new world of pricing where you don't charge for licensing, support and maintenance and you don't charge to upgrade – like Salesforce – and if a customer uses a little less of your technology, you charge less."

Garnett summed this up by saying that the fact SAP is "still profitable is reflective of how much they're charging their customers".

Garnett's comments reflect those of many SAP users, who are locked in ongoing discussions with the company over license models.

When Computing asked how Salesforce is going to adapt its strategy – if at all – to cope with SAP's threats to end the company's so-called "free run on cloud sales", Garnett laughed.

"We're going to focus on our customers' success, like we've always done, and on innovation, making sure our customers are delighted. If we do that, that's the best safeguard against anything," he said.

Garnett also accused SAP of "relaunching" its plans to attack the cloud for "the third or fourth time" in its earnings call promises.

"Call me cynical, but I seem to recall it must be years ago that SAP first launched this, then it seemed to disappear and they relaunched it three or four years later, and it disappeared again," Garnett said.

"This must be at least the third or fourth announcement that SAP has made around this. But we're not complacent – we'll just continue to be innovative."

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