SAP recently announced the acquisition of Syclo, a mobile app provider targeting field service and adjoining application areas. With approximately 40% of SAP’s installed base involved in the manufacturing sector, Syclo’s specialty is highly complimentary and brings strategic depth to SAP’s growing list of mobile apps built around the Sybase Unwired Platform (SUP), which Syclo will employ for future product updates. SAP also announced a strategic partnership with 3 leading development environments in the rapidly expanding mobile market for HTML5 and hybrid mobile apps; PhoneGap (recently acquired by Adobe), Appcelerator and Sencha. User friendly consumer targeted and business apps are a growing force in extending corporate backend systems to both B2E and B2C, and SAP wants to take maximum advantage of this trend by enabling its customers to deploy compelling mobile apps, tied to its back end platforms.
We see these recent actions as a continuation of SAP’s long term strategic agenda to be the leader in mobile enterprise back office solutions. Indeed, this puts SAP even farther ahead of its primary competitor Oracle, who has a mixed message at best in its mobile capabilities with Fusion, and has not kept up with the market demands of mobility. It also puts SAP ahead of IBM, Microsoft, and cloud based players like Salesforce, which do not have SAP’s more complete mobile capability, including SUP, Afaria for mobile device management and BYOD (although more is needed here), HANA for high speed backend data analysis and Sybase 365 for financial transactions and high volume messaging..
In partnering with 3 key mobile app development companies to enhance its SUP development environment, SAP has come to the realization it can’t do everything itself if it wants to be responsive to rapidly evolving market demands. For PhoneGap, Appcelerator and Sencha, this action puts 170K SAP customers in front of them to expand their enterprise user base. But the potential leverage to SAP of integrating these popular mobile app development environments can’t be underestimated, given the growing demand for cross platform HTML5 based and hybrid mobile device apps for smartphones and tablets.
Many companies have already adopted one of these platforms to address areas SUP can’t, so enhancing the creation/interface capability is a good step in incentivizing the user base to tie to the SAP core for more functions. Companies increasingly need to include both internal user facing (B2E) and external customer facing (B2C) apps. Of late, IBM has focused its efforts more on B2C while Oracle has focused its limited efforts on B2E. The partnerships and SAP’s extended infrastructure gives it an ability to focus on both business and consumer apps.
Often overlooked is the Sybase 365 platform SAP acquired along with Sybase. Its messaging based platform is already powering many mobile financial transactions around the world, and has an impressive list of key financial banking partners worldwide. This is an attractive additional capability for companies who would like to include payment options, especially for consumer facing apps. We expect to see more emphasis on this in the future are more mobile payments, accelerated by NFC) becomes a “must have” in mature markets in the next 2-3 years, although we expect emerging markets to trail in adoption of NFC by several years and continue on their current path of less sophisticated but equally important payment options.
What’s missing is still a strong play in mobile security. There are many smallish companies addressing this area, one or more of which might be attractive for SAP to purchase and integrate. However, in the near term, we’d expect to see SAP partner with leading mobile security vendors (e.g., McAfee, Symantec) to extend its mobile management umbrella (Afaria) rather than bet on a play in a still confusing and evolving market.
Bottom Line: With a continuation of acquisitions and partnership, SAP has shown a commitment to being a leader in the mobile enterprise, unlike its chief ERP/CRM competitor, Oracle, which lags far behind. This puts increasing pressure on Oracle to acquire a mobile app company to try and catch up (e.g., Antenna, Kony, Verivo), as IBM recently did (Worklight). But we expect SAP to remain the leader in mobile applications connected to core infrastructure running mid to large organizations. Its likely SAP will continue its aggressive acquisition and partnership activities, extending its market leadership and further distancing itself from the competition.
Jack E. Gold
J.Gold Associates, LLC.
Research, Analysis, Strategic Consulting