Every company wants to be like Apple. At least, that’s a fair assumption to make. The same breathless adoration once reserved for GE and IBM has now been transferred to the home of the iPhone. And, for any business that sets market evaluation as its main criteria, Apple is certainly the enterprise to emulate.
Following this mindset, some might consider SAP’s first true consumer app, Recalls Plus — a solution that lets consumers quickly track product recalls on their mobile devices and share details within social networks — as a blatant attempt to catch some of that glorious Apple cachet. The fact that Recalls Plus is available as a free download on the Apple Store only adds to the misperception.
But emulating Apple isn’t the point of Recalls Plus. Actually, it’s Apple and the rest of the consumer-based technology business that should be drooling over the prospect of being more like SAP.
Customer Loyalty Is Key
Let’s give credit where it’s due. Apple does a great job of cranking out the hits in rapid succession. The iPod, iPhone, and iPad all have become must-own products for technology consumers around the world. It’s an impressive track record that any consumer products company would be jealous of.
But behind all this success is a major catch: the loyalty and attention of Apple’s customers is very much predicated on a “what have you done for me lately?” attitude. So Apple is constantly churning out new products not only to win new customers, but more importantly to keep the existing customer base from losing interest. Surely iTunes and the Apple Store help — having access to great content to put on Apple devices provides a strong value-add to the owners of these devices. But it does little to staunch the appetite of a notoriously fickle consumer market.
This model of creating a never-ending string of hits — or else — makes for a serious problem. In the Apple model, customer loyalty and customer engagement are measured in very short, consumer product lifecycle time frames — in months, not years. If the next new product isn’t “cool” enough, that consumer will quickly look in another direction.
The SAP customer model looks very different. Don’t get me wrong, enterprise customers crave innovation as much as anyone else. In fact, as the world of the enterprise and the consumer have blurred and merged over the last few years, the enterprise’s appetite for innovation has been growing more and more demanding. In many ways, the Apple effect is the primary force that is driving this increasingly rapid pace of change in the enterprise.
Enterprise Customers Demand Products with Long-Term Value
Enterprise customers have one important factor that makes them very different from consumers: New products, even the most innovative, must have a value that can span years, not months. And that value has to be demonstrable and provable, with a real business case and real ROI. Otherwise, there’s no way the new product will get in the door.
Ironically, there was a time when IT bought technology the way today’s teenagers buy apps. Leading-edge finance, aerospace, defense, and other companies literally bought one of every new technology and threw a team of engineers in a room to play around with the products. Many of Silicon Valley’s earliest software and hardware pioneers got their start in this kind of market dynamic. It was fairly standard for new startups to have a passel of early customers who were effectively trying to find a business justification for these highly engineered, but largely business-unready, technology offerings.
And if no business case could be found, the product may have lived on in the customer’s lab as part of some engineer’s pet project, but that first sale — deeply discounted, no big lifetime maintenance stream included — was the last. The product, and most likely the company that made it, would soon be relegated to obscurity and then forgotten altogether.
Alas, in the enterprise world, this “buy it first and then see what sticks” technirvana is no more. Today, enterprises are looking for business justifications up front. And, assuming the justifications are well-reasoned, they are willing to sign up to use a product for years — becoming a loyal, longstanding customer in the process.
So what does this mean for SAP’s consumer app Recalls Plus? Other than it being an app I wish were available when my kids were younger, Recalls Plus has an important mission in life: Prove to the world that a business software company can build a consumer app that is appealing, useable, and, moreover, useful.
Why Is SAP’s Recalls Plus So Valuable?
We mistakenly talk about the consumerization of IT without considering what is perhaps the more important issue: the IT-ization of the consumer. When we let IT become consumerized, we run the risk of breaking down not just the security and controls inherent in enterprise software, but also the concepts of overall quality and usability. In my opinion, the majority of apps in the Apple and Android app stores are of questionable quality and value.
This is one of the benefits and dangers when the barriers to entry are so low — all too often, genuine quality is ceded in favor of quantity. So the Apple Store boasts of literally half a million apps — how many of them are truly useful? Very few indeed.
So value number one for SAP’s Recalls Plus is to show what enterprise-class software looks like in a consumer context. And without a doubt, Recalls Plus is anything but a lightweight consumer app.
Value number two is similarly wrapped up in the delivery of enterprise-class apps to the customer. If SAP can make a market for its consumer apps, and do so with demonstrable quality, then it is well on the way to establishing its credentials as one of the few companies that can provide applications that span the consumer and business worlds. The presence of Recalls Plus and other apps like it can help make the case that SAP understands what these two overlapping classes of users need, and in doing so help drive its consumer loyalty toward the kind of long-term relationship that SAP enjoys on the enterprise side.
Clearly, more than one app is needed to make this happen. No matter, there are plenty of areas — travel and expense management being an easy example — where SAP can build the kind of bridge app that makes the consumer in us swoon and the enterprise IT buyer in us stick around for years at a time. Apple may appeal to the consumer’s gut, but SAP is making a play for its IT mindset as well. And therein may lay the groundwork for SAP becoming the consumer/IT hybrid that Apple only dreams about.
Joshua Greenbaum has over 25 years of experience as a computer programmer, systems and industry analyst, author, and consultant. He spent three years in Europe as an industry analyst and a correspondent for Information Week and other industry publications.
Joshua regularly consults with leading public and private enterprise software, database, and infrastructure companies and advises end users on infrastructure and application selection, development, and implementation issues. You can reach Joshua at editor@insiderPROFILES.wispubs.com.