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Opinion: NetSuite's scathing attack on SAP's hybris acquisition is a good PR stunt

Derek du Preez | June 7, 2013
But SAP's attempt to expand into e-commerce isn't about broadening its cloud offering.

NetSuite, a provider of cloud-based enterprise applications, has launched a scathing attack on SAP after it was revealed this week that the enterprise software giant is acquiring e-commerce player hybris for an undisclosed amount.

However, NetSuite's comments don't necessarily accurately reflect the motivation behind SAP's buy and is arguably a bit of a PR stunt, albeit an entertaining one.

SAP said yesterday that hybris will allow it to further engage with the 'consumer economy', by not only reaching its B2B customers, but also those customers' customers. It hopes that by combining hybris' commerce platform with its flagship in-memory platform HANA, alongside analytical and cloud applications, with its social software platform Jam, it will be able to deliver enhanced customer insight and engagement across all channels.

However, since the announcement, NetSuite's SVP of international products, Craig Sullivan, has launched an attack on SAP's continued efforts to branch into cloud-based applications.

"SAP is running scared. They know they are ill equipped to make a meaningful impact in the cloud market," said Sullivan.

"They've resorted to their standard practice when they don't know what to do: make an acquisition to plug a gap rather than supplement a core strategy. All the best to them with integrating yet another new set of applications and services into the hairball of their already complex product offering."

SAP has said that hybris' applications will be available in the cloud, but also on premise. However, SAP's motivation for the acquisition shouldn't necessarily be seen as a desperate attempt to expand its reach into the public cloud market.

The German software provider is deeply embedded into thousands of enterprises across the globe, many of which aren't going to simply want public cloud applications - so why should that be SAP's strategy? SAP argues that enterprises aren't looking for a one size fits all solution, which is often the case with public cloud. It believes that enterprises want choice - public cloud, private cloud, on-premise and hosted.

It is gambling on providing a selection of these offerings - whether that be through its traditional on-premise CRM and ERP applications, or through its recent cloud acquisitions (Ariba and SuccessFactors) - and making them available on its in-memory platform HANA.

HANA is core to SAP's strategy - not the public cloud. The in-memory platform allows companies to run analytics and transactions in real-time and SAP believes that this is what customers will glean benefit from.

The acquisition of hybris simply allows SAP to flesh out its multi-channel e-commerce offering and will further enable it to reach its customer's customers - something it perhaps had been struggling with up until this point.

NetSuite's bullish claims are a good way to grab some headlines, but I doubt it is going to keep too many SAP execs awake at night. As SAP's co-CEO Bill McDermott said on a conference call yesterday: "We are going to unleash a CRM campaign [on SAP's biggest customers] like the world has never seen before".

Not exactly the words of a man running scared.


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