Marc Benioff: SAP Is Innovation-Free

By Larry Dignan  |  Posted 2006-02-13 Print this article Print

Opinion: It's safe to say CEO Marc Benioff isn't a big fan of German software giant SAP.

Its safe to say CEO Marc Benioff isnt a big fan of German software giant SAP. After all, a fan wouldnt refer to SAP as "innovation-free" and describe its software code as "bulky and inefficient as it is expensive and unloved by its users."

Benioffs description, which may have been penned in between explanations for Salesforce.coms recent outages, surfaced in an e-mail to his troops right before SAP launched its own on-demand CRM (customer relationship management) software service.

Analysts and competitors are wondering why SAP didnt jump into the on-demand CRM area sooner. Click here to read more.
Among the notable ramblings:

• "People who havent followed our company closely often ask, Arent you worried? A company with the resources of SAP can bring so much to this battle. But thats exactly the problem. Observers tend to overestimate the creativity and innovation that entrenched technology companies can bring to a particular problem and underestimate the effect of business-model conflicts that lurk behind the scenes."

• "Lets state it simply: SAP is an innovation-free company. When reporters describe the great innovators of this industry, its easy to identify the significant contributions of many of the leaders. For Oracle, its the database; for Apple, the Mac, iPod, and iTunes; for Microsoft, the PC operating system; for Intel, the microprocessor."

Read more here about Oracles plans for Siebel. • "But for SAP? I struggle to think of a single innovation that SAP has contributed. Their code is as bulky and inefficient as it is expensive and unloved by its users." (Editors note: We cant recall any love calculation for return on investment but will look into it.)

• "SAP, like Oracle and Microsoft, now risks cannibalizing its existing customer base. Can they actually afford to convert their billions of dollars in maintenance revenue into subscriptions?"

All in all, it was a fine memo, Marc. Keep the quotes comin.

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Business Editor
Larry formerly served as the East Coast news editor and Finance Editor at CNET Prior to that, he was editor of Ziff Davis Inter@ctive Investor, which was, according to Barron's, a Top-10 financial site in the late 1990s. Larry has covered the technology and financial services industry since 1995, publishing articles in, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism.

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