On the strength of its 15-month-old RISE with SAP go-to-market program, SAP is beating Oracle in a majority of head-to-head cloud ERP deals and winning “huge” HCM deals over Workday, according to CEO Christian Klein.
While it’s not unusual for the top cloud-application vendors to tout their superiority over competitors, the comments made by Klein in last week’s Q1 earnings call stood out to me because he framed them in the context of the RISE with SAP program that makes it easier for customers to consume SAP technology.
As I noted in yesterday’s Cloud Wars Minute episode, the RISE “transformation as a service,” as SAP calls it, stands alone among the Cloud Wars Top 10 as the only go-to-market offering of its kind. And on last week’s earnings call, SAP’s top executives could not have been more bullish about the impact of RISE on overall cloud growth and particularly for the S/4HANA Cloud ERP suite and SuccessFactors HCM.
In framing the competitive landscape with Oracle for cloud ERP customers, Klein offered this context:
“Our success with RISE has led to great S/4HANA Cloud momentum as we now have more than 5,300 S/4HANA Cloud customers, and our win rate against competitors was 63% for net new deals,” Klein said.
While he did not mention Oracle by name, SAP’s long-time nemesis is the leader in the field with its Fusion ERP suite. Plus, I suspect Klein was loathe to mention his top competitor’s name directly. And in about 6 weeks when Oracle releases its fiscal Q4 results, I’d say there’s a 99.5% probability that Larry Ellison will insist that Oracle is cleaning SAP’s clock on ERP deals.
So the differentiating point here is Klein’s intentional coupling of SAP’s momentum with S/4HANA Cloud (Q1 revenue up 71%) with RISE. And he cited Zero Motorcycles as an example of one of those big wins over Oracle, which is a compelling customer example because it’s a new-age company rather than a big global corporation of the kind generally associated with SAP’s client base.
Calling Zero “the global leader in high-performance electric motorcycles and power trains,” Klein said the company “has chosen SAP S/4HANA over Oracle to help replace their legacy infrastructure and scale manufacturing operations to meet rising demand.”
In the HCM category, Klein again cited RISE as a huge difference-maker in the competitive battles between SAP and market leader Workday. Klein also noted how the combination of cloud ERP with cloud HCM provides customers with capabilities and insights that he said Workday can’t match.
“Our SuccessFactors portfolio continues to win significant business over Workday,” said Klein, noting that leading Brazilian pharmaceutical retailer Grupo DPSP has, as part of its wide-ranging RISE implementation, added more SuccessFactors modules “to better manage, retain and develop its workforce.”
The pairing via RISE of cloud ERP and cloud HCM gives customers an “integrated view” of their end-to-end operations, Klein said, which has been one of the primary objectives of the RISE program.
“When we designed RISE, it was always our intention to accelerate the adoption of S/4HANA Cloud,” Klein said, emphasizing that SAP’s Business Technology Platform is a key component of RISE.
“And we are now seeing a next wave in which we are suddenly winning huge deals against Workday with SuccessFactors because we can provide this integrated view via our modular ERP that together provide capabilities like total workforce management, and measuring productivity in real time.”
Plus, Klein said, the combo can help customers simulate attrition rates and plan accordingly based on overall impact on profits and growth opportunities.
“And this is why RISE provides such a great conversion factor and also allows us to increase our footprint over time and come in categories that have not done so well in the market over the past two years,” Klein said.
He then offered a sweeping perspective of how today’s complex, multifaceted, and fast-changing business cycles need to be interconnected by applications that in the past were locked and isolated in silos.
“With Ariba, procure-to-pay now sits on a single procurement platform where you can tailor the needs for direct and for indirect procurement, and it connects to the network for supplier risk management for new legal requirements to ensure there are no human right violations in your supply chain,” he said.
“This is what we are doing with RISE by enabling customers to adopt these new capabilities, and we are seeing it clearly in the net-new installed-base shift.”