Does SAP refute the rule that Europe cannot change technological companies?

Because although investors in America (and more and more China) have many large fast -growing technological companies from which to choose, in Europe, there is really only one company that at scale and within reach can be compared with alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla. It is the sap of Germany, or as it is sometimes called, der eine (that).

Not only does the company – a specialist in Back -Office Enterprise Resource Planning (ERP) software – the largest technological company in Europe, but is also the most precious company on the continent, with a market capitalization approaching 300 billion euros, after having exceeded the Danish pharmacy and the Danish pharmacy Nodo Nordisk, in March of this year.

It is in 450^th Place on the Fortune Global 500 list employs 109,000 people in more than 130 different countries and has a list of stellar customers which includes 98 of the 100 largest companies in the world.

One of the secrets of SAP’s success is to understand that in technology, there is never a good time to rest on your laurels, explains the chief of operation Sebastian Steinhauser. “We remember every day that technology is the most competitive industry on the earth. With each new wave of innovation, the technological space is redefined, the new businesses appear and you must do again. I am very satisfied with it. “

The latest wave of SAP changes moves both its own processes and those of its customers from traditional (and costly) databases on site and in the cloud. The pivot started in 2020 and, without any criticism, he was late at the party, which came with an initial crisis of 30% of the course of action – it turned out to be a fairly intelligent decision. Cloud migration is a proverbial win-win that reduces initial costs and accelerates the implementation of users, while also generating new stable and predictable income for SAP itself.

It is also proof that despite the wisdom received contrary, you do not always have to be an early adopter to gain technology.

“You must remember that the ERP system is the most critical software asset for any customer. There is a lot of confidence involved in the execution of this system, ”explains Steinhauser. “If the CRM (customer relations management software) does not work for about an hour, it’s annoying. But if the ERP stops working, your whole business is motionless.”

A strategy for AI

One consequence of this is that SAP customers generally prefer a proven solution which is a follower on a advanced but untreated solution.

SAP believes that the realization of the transformation of the Cloud will take out an income in progress until 2030, offering a welcome track to prepare for the next wave of change – AI. “Our flagship offer for the migration of the cloud is called Rise with SAP. It is really a transformation that starts by moving your ERP to the cloud. The whole trip that follows also consists in simplifying trade processes, creating cases of using AI and developing in our integrated suite to avoid costs and strengthening commercial capacities, “explains Steinhauser.

In terms of AI, he sees the greatest opportunities, both for SAP and for Europe as a whole, in application rather than for development. “There has been a wave of AI experimentation, but now the real challenge is the adoption of AI and value creation,” he said. Thus, as the technology has matured, a competitive advantage will be less knowing who has the best technology and more that draws the best party from their data. “The real differentiation will be in the data rich in context in which you can feed.”

SAP already has a ton of excellent data – the integration of all this so that the agents of AI can go to the extraction of the value for its customers, this is what the agreements as the very tuned link with Data Intelligence Platform Databricks are entirely. “This is the perfect example of our strategy. We associate with the best technology, then apply it to solve the most urgent commercial problems, ”explains Steinhauser.

The story of SAP can miss the Silicon Valley F Gagn of corporate technology reinventions like Apple and Microsoft, but it is no less radical, explains Gary Dushnisky, professor of strategy and entrepreneurship in London Business School. “SAP has exercised incredible foresight in some of the strategies they have developed, and they also managed to reinvent themselves two or three times. This is something that many other companies have not done. ”

In addition, SAP’s real commercial rivals are not so much the megacorps of the Magnifacts Seven (many of which are SAP users themselves) but rather providers of business service platform like Oracle, ServiceNow and Monday.com for the automation of back office and workflow, and also Salesforce, which specializes in the CRM, but meets more and more Battle to have the complete customer experience.

Getting over them requires a certain lack of counter-intuitive interest, explains Steinhauser. “In the end, I am not so interested in what this competitor is doing or this competitor, because this is not what makes SAP unique. I am much more interested in how customer expectations are evolving with technology. ”

The missing technology giants of Europe

Why are more European rival companies not European? The response in action is that European companies are simply not as ambitious, but it is too simplistic for Dushnitsky. He highlights the structural differences such as the enormous disparity in the financial firepower available in the United States and more and more in Asia, compared to Europe.

This makes much more likely that promising European companies will be acquired by American people before being able to globalize than the reverse. Another related difference is in the tendency of the American founders to repel potential accidents rather than yielding them: having the nerve to say “no” when a tempting offer is on the table.

“Mark Zuckerberg said no, Sergey Brin said no. Throughout the world, people who are able to build these large organizations are people who want to build, rather than wanting to sell,” observes Dushnitsky.

Rather than blaming businesses, Steinhauser says that it is the environment in which they operate that needs attention. “I am a passionate European, and Europe has all the ingredients. Some of the best talents, the best universities and the best research in the world are in Europe ”.

But the continent loses in another way. For example, as the Draghi report on detailed European competitiveness, technological companies that seek to develop across Europe must negotiate no less than 100 software regulations and 270 regulatory organizations. “We would like to see five other SAPs, but unfortunately I think (in Europe), we focus even more on the creation of barriers to innovation,” explains Steinhauser.

In the end, focusing too much on issues of origin and location can hinder rather than facilitate growth ambitions, concludes Steinhauser. “I think that part of SAP has reached the scale that we have is that we have never defined ourselves as German or European, but as a global technology company to compete with other global technological companies, 99% of which are in the United States”

Europe is lagging behind the United States and China in key growth sectors due to expensive energy and standby market reforms. This series of articles explores how technology, regulations and innovation can revive its competitiveness.