SAP’s new boss writes about Henning Kagermann, the person likely to take over as head of SAP:

His professorial past shows most when he explains trends in IT. A good illustration of the current shift in enterprise software, he says, is the difference between classical and quantum physics. The former deals with separate systems, just as enterprise software traditionally was about separate applications. In quantum physics, everything is deeply linked. Similarly, with the help of the Internet, applications are growing together, both within companies and across industries. Enterprise software will increasingly be about stringing together entire business processes. Naturally, Mr Kagermann sees SAP as the ber-integrator in this real-time economy.

Today, SAP can consider itself lucky that it was late jumping on the Internet bandwagon (with an ill-fated investment in Commerce One). If firms spend money on new software these days, they prefer established vendors that offer integrated packages – something that plays to SAP’s strengths. What is more, SAP has made some shrewd moves. It opened up its applications, for instance, making it easier for customers to connect them with competing products.

Yet SAP is not about to take over the world. It still has to prove that it can offer the right kinds of products and services for all types of businessfrom easy-to-use programs for small firms to complex solutions for large companies. It is making some headway on both fronts: it recently released a new software package for smaller companies, called Business One, and on July 31st it announced a deal with Ford, worth at least $40m, to streamline the car maker’s distribution of parts.

These days, Mr Kagermann says, one can’t simply sell a big idea without being sure it can be properly implemented. Customers want to understand what works and what doesn’t. Tech talk is out, he adds, and competence in.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.