SAP has moved to curb the impact Salesforce is having on its own CRM efforts with its latest product, C/4 HANA, analysts say.
C/4 HANA is SAP's attempt to tie its own customer-facing tools together, after similarly grouping its ERP applications within S/4 HANA, in a bid to push customers towards adopting both its back-office and front-office products.
"SAP was the last to accept the status quo of CRM and is now the first to change it," said CEO Bill McDermott.
"The legacy CRM systems are all about sales; SAP C/4 HANA is all about the consumer."
Industry observers suggest that SAP has made the move to stop the likes of Salesforce eating into its installed base.
C/4 will comprise all of SAP's CRM acquisitions to date - SAP Marketing Cloud, SAP Commerce Cloud, SAP Service Cloud, SAP Customer Data Cloud (including the acquired Gigya services) and SAP Sales Cloud (including the newly-acquired CallidusCloud services and acquired Hybris business).
SAP is the second largest CRM vendor, owning 8.5% market share in 2017, according to Gartner's statistics. But while customers of SAP's ERP products are loyal purchasers of its front office kit in sectors like utilities, chemicals and industrial manufacturing, those in retail and consumer goods are more likely to use Salesforce, Gartner research VP and distinguished analyst Ed Thompson said.
"The battle is between those who want a unified front-office and value it more than those who want an integrated front to back-office," he told IT Pro. "The issue has been whether they're patient enough to wait for SAP to get their act together or whether they want something more quickly."
Another factor is the size of the CRM market - it overtook the ERP market in 2015 and is expected to be worth $75 billion by 2022, according to Gartner figures, compared to ERP's $44 billion market cap.
"So in essence SAP has to do well in CRM; it will one day be bigger for them than ERP," Thompson said.
But bearing in mind Salesforce's 19% market share, SAP must reach beyond traditional users of its CRM products to offset its dominance.
"It will take more than launching C4/HANA for SAP to close the gap," Thompson said. "They'll need to find a way to appeal to those who are not existing SAP customers for CRM, widen their ecosystem of ISV and consulting partners and make ground in the industries they haven't traditionally sold CRM to."
C/4 HANA simplifies the branding of SAP's range of CRM software by putting it under one roof. One level up from that, and SAP is effectively selling S/4 and C/4 under the 'intelligent cloud suite' brand as one whole connected service tying together front and back office IT.
As McDermott put it: "When you connect all SAP applications together in an intelligent cloud suite, the demand chain directly fuels the behaviours of the supply chain."
But Constellation Research's Mueller stressed that customers now need to see the new positioning backed up in product announcements.
"SAP has a shot to redefine #CRM with the @CallidusCloud and #S4HANA assets," he tweeted, "but must show complete processes."
This means integration via APIs, and fast - something Thompson also highlights.
"It will require a quick follow up with details on architecture and roadmap to back up the strategy and it doesn't yet address the issue of how this will encourage a CRM ecosystem of partners and facilitate increased innovation," he claimed.
Both analysts view it as a move to limit the impact Salesforce is having on SAP's CRM business, rather than an aggressive push of its own. "Pressure on CRM must be substantial," Mueller observed.
"This is a defensive [move] in response to Salesforce," Thompson added. "It will take more to get on the offensive."
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