"What we’re seeing is a shocking uptake, extremely fast!" So declares the never knowingly under-enthusiastic Lars Dalgaard, former CEO and founder of Cloud HCM firm SuccessFactors and now Cloud chief at SAP.
Dalgaard stepped up to his current role last year after the German giant bought out SuccessFactors as part of its own push into the enterprise Cloud applications market. Many commentators had questioned whether Dalgaard would stay with SAP for any length of time following the acquisition, but it seems he’s taken to his new surroundings.
One aspect that’s clearly appealing to him is the global force of SAP as a brand, what he refers to as the "global access of SAP". While SuccessFactors had enjoyed significant enterprise-scale clients, the power of the SAP brand to open up the world’s corporate boardroom doors is clearly a step-change up the scale.
"SAP is in 160 countries, no other Cloud company is," notes Dalgaard. "We are now, therefore, with our Cloud products and Ariba and SuccessFactors and the SAP Cloud products in all those markets instantly in one brand.
"We’re doing deals now that couldn’t have been done before," he adds. "When [SAP co-CEO] Bill McDermott invited me to the Executive Advisory Board meeting of SAP’s largest customers in Washington, DC, I met several customers that have been SAP customers for 20, 30 years. They were not ready to buy Cloud, and they told me Cloud is not for them.
"Well, six or seven months later, they all bought multimillion-dollar deals in all regions. That’s just shocking to me, but that’s the power of SAP and the real Cloud products coming together. That’s the way we’re increasing the total available market, which is unique to me and, quite frankly, unbelievable so quickly.
"When we show up in this constellation with the powerful industry expertise of SAP and the knowledge of these people in the field, we just win," he claims. "We win pretty much everywhere we show up."
Converting to the Cloud
Dalgaard cites the example of PepsiCo to back up his claims. A long-standing customer of SAP’s on premise enterprise offerings, last year the firm also became a user of SuccessFactor’s Cloud offering, Enterprise Central, to manage 300,000 people in 80 different countries. "This is now the world’s biggest Cloud core HRS market deal with 100,000 seats, the biggest at 300,000 in total," observes Dalgaard.
Cloud investment is not coming at the expense of on premise, he suggests. "What we’ve experienced is that, when we go to these customers first the way we do when they see Cloud, they not only buy cloud at a great price, they also accelerate their on prem buys," says Dalgaard.
The SAP ownership has also boosted the prospects for the old SuccessFactors offerings, such as Employee Central. "What happened with Employee Central is that we’ve grown it 4x," says Dalgaard. "The reason we’ve grown it 4x is because we were able to take some of the amazing engineering power in Germany and in Palo Alto and put that uniquely on SuccessFactors the day we got acquired. That has accelerated not only our capabilities, but our content and, thereby massively, our competitiveness."
It’s also changed the look and feel of the SuccessFactors offerings, he attests. "There is no better but also better-looking and fresher experience in core HRS system of record than the total ERP in the Cloud that we can now deliver in 2013," claims Dalgaard.
That will help in the battle with other Cloud ERP providers such as Workday and NetSuite, not to mention arch-enemy Oracle. Dalgaard argues that SAP is armed to the teeth for the oncoming battle.
"We have MyFinance, which is built from the people who built R/3. They’re working for me on this Cloud product. It’s a beautiful financial product," he explains. "We have the core HRS. And we have suppliers from the company that absolutely have had the most success in that market, Ariba. Then we have the sales and the customer and all of the support piece and marketing on the customer side of the business. This is a excellent and really relevant offering to all of our customers."
Overall Dalgaard suggests that 2013 will be the year of the SAP Cloud. "The energy is just astounding and shocking, the way everybody is talking to each other about how great and legendary 2013 is going to be," he says. "Most people say they’ve never seen market conditions, products opportunity and market position like this ever in their life before."