On March 10th 2014 SAP and Accenture announced the formation of a Business Solutions Group to be formed in San Jose. Enterprise application vendors like SAP have a long history to form partnerships with system integrators (Sis). So is there something different in this announcement?
Let’s take a look at the press release here:
Accenture (NYSE: ACN) and SAP AG (NYSE: SAP) today announced the creation of a new business group focused on rapidly accelerating the time it takes to jointly develop and deliver new industry-specific solutions based on cloud and other digital technologies. The Accenture and SAP Business Solutions Group brings together the companies’ respective co-innovation, joint solution development and go-to-market teams in an effort to focus on significantly increasing time to value for clients globally.
MyPOV – SAP looks for validation points for its technology, HANA being the most prominent product. Partnerships like these show a willingness of the ecosystem to partner with SAP on these products. Accenture - like all other SI’s – is confronted with a significant business shift by the cloud. Traditional very rich revenue streams from in premise implementations of enterprise solutions are at risk by these products being moved to the cloud. And cloud based implementations see lower implementation revenues, no need for onsite upgrading etc. So Accenture is looking for new and additional revenue streams – being the partner of a large enterprise application vendor like SAP gives Accenture new opportunities.
Note that the press release is vague around the commitments in regards of exclusivity from both sides. Do not expect this to be an overall and exclusive partnership.
The Accenture and SAP Business Solutions Group helps facilitate a combination of Accenture’s intellectual property and industry expertise with innovative solutions that are powered by the SAP HANA® Cloud Platform to more rapidly enable customers to harness the benefits of digital technologies including cloud, analytics and enterprise mobility. The goal is to significantly expedite the joint-solution development process to help allow the two companies to quickly bring breakthrough solutions to market across a range of industry sectors, with an initial focus on retail and consumer goods, automotive, energy and utilities.
MyPOV – No surprise – it is all about HANA. And while SAP needs to create horizontal offerings on top of HANA – it’s a good move for SAP to partner with an Accenture to leverage its industry expertise. With a focus on retail and consumer goods, automotive, energy and utilities – the partnership addresses more than a third of the SAP install base – so plenty of potential market to sell. The group structure also isolates SAP from any potential issues of mixing up Accenture intellectual property (sic!) with its internal product development efforts.
Accenture and SAP are structuring the new Accenture and SAP Business Solutions Group to simplify the process of purchasing SAP solutions and Accenture services for clients. For example, a goal is for new industry solutions to be available through a single-contract business services model and on an “as-a-service” basis. The new arrangement represents an evolution of the work the two companies have conducted together through the Accenture Innovation Centers for SAP Solutions and further outlines the go-to-market framework first introduced in 2013. […]
MyPOV – Again no surprise – cloud based enterprise products need also elastic implementation resources. Of course humans (luckily) do not scale like IT resources – but coming closer to the dynamics of SaaS implementations and upgrade cycles certainly helps these offerings. And it’s worth noting – but equally expected – that a purchase from the newly formed group will not mean doing business with SAP and Accenture separately on a contractual basis. This will be a welcome simplification business wise for future customers. The Group will have to address support and maintenance questions going forward though. Who will a customer call when something does not work?
The Accenture and SAP Business Solutions Group will be based in San Jose, California, and the joint team will include some of the world’s leading solution development talent, supported by a dedicated team of sales, marketing, finance, legal and commercial professionals. Experts from both Accenture and SAP will collaborate to identify business needs, develop solutions, execute go-to-market strategies and help implement new solutions for clients.
MyPOV – Joint expertise centers, center of excellence etc. are nothing new for SI partnerships. That the new group will have its own sales, marketing, finance, legal and commercial professionals is new and may serve as a blueprint of more similar partnerships in the industry. Bringing in the administrative resources gives credibility to the claim mentioned in the press release, that the Group will simplify doing business with Accenture / SAP. It will be even more interesting to see how the go to market will be addressed and solved. Will we see SIs being neutral and partner with different vendors on the same opportunity – or will a significant corporate and IP investment skew the sales preference towards enterprise application vendors where that investment and commitment have happened?
The first industry solutions developed under this new commercial framework include the Marketing Performance Solution by Accenture and SAP, a marketing analytics solution that provides relevant customer data across enterprise operations, and the Upstream Production Operations by Accenture and SAP, which features a set of solutions, services and training for oil and gas companies’ production operations.
MyPOV – Having available two product offerings already makes this an announcement with more teeth than the other - often fluffy - ecosystem announcements. Now we will have to see how good a customer traction SAP and Accenture have achieved and what other products maybe announced (at Sapphire?) soon.
Overall POV
This is not the usual go to market partnership announcement we have seen in the enterprise software space since decades. There are real product available now, the offering will be put in the market by dedicated sales and marketing efforts and should be – given the administrative investments – be easier to procure.
But it is not an exclusive arrangement from either side – regardless Accenture deserves kudos for striking the first of these kind of partnerships. SAP gets a validation point for HANA – and a (much needed) vertical product story for the cloud. On the flip side this means that we will have to watch carefully how SAP will be building out its own vertical enterprise automation plans. Ultimately SAP and Accenture have to show that they can sell these solutions beyond their shared install base, as the ultimate proof point of the attractiveness of their offering…
Lastly let’s not forget the customers, for who this should be a win. Anything that integrates SIs and products closer, in an easier to procure way – is good for customers. Non Accenture / SAP customers take note and look for similar partnerships most likely coming sooner than later.
More from me on the SI business:
More from me on the SI business:
- Is the existing SI business being travolged? Read here.
