Four Key Takeaways from SAP Sapphire

This week, SAP held their annual Sapphire conference in Orlando. Sapphire brought together 14,000 people to see the latest SAP has to offer…and the evolution of their thinking. I’ve attended Sapphire for many years, and this year has been one of the more exciting and inspiring.

I’ve said it before that today’s SAP is not the SAP of the past when I was a customer. SAP continues to make significant strides to demonstrate a more open, forward-thinking and innovate platform for enterprises.

Business is complex. ERP takes on some of the most complicated business challenges. At the same time, businesses need increased flexibility. These terms, complex and flexibility, are seemingly at opposite ends of the spectrum. Yet SAP is working to support the complexity while providing greater flexibility to support business changes.

SAP is leveraging their five decades of deep business experience to provide context to drive new data integration insights and AI innovation. This pairing of business experience and innovation creates an interesting opportunity for enterprises.

While there were many announcements at Sapphire, several stood out that CIOs should take note of.

Suite first: Pairing suite value with the SAP flywheel

SAP has long been recognized for their integrated approach to core business applications. From ERP to finance to spend management to HCM, enterprises have benefited from an integrated approach.

The ability to run SAP Business Suite in the cloud brings together these core applications to benefit enterprises large to small by leveraging the power of integrated data. The value of this integrated approach is not new. However, today the value of integration is hyper critical for new functions such as AI. More on that in a minute.

After a period of leveraging best of breed solutions, enterprises are looking to consolidate operations and integrate data to unlock new insights. SAP is capitalizing on this with what they are calling the ‘SAP flywheel’ of AI, Data and Applications.

The integration of applications with their underlying SAP Business Data Cloud provides two of the core attributes to the SAP flywheel: Data and applications.

SAP expands the boundaries for AI insights

Beyond data and applications, AI is the third component in the SAP flywheel. It is also a significant opportunity for enterprises.

Enterprises are looking to leverage insights beyond the bounds of any single application. The reality is that business functions are largely cross-functional. SAP offers the ability to leverage AI across the SAP suite of applications creating significant cross-functional value.

Today, SAP is going beyond the bounds of the SAP platform to integrate external solutions in several ways. 

Announced almost two years ago, Joule is SAP’s AI solution. Joule already works across SAP’s suite of applications. Today, SAP announced it is going beyond the boundaries of SAP to leverage Joule across SAP and non-SAP applications. SAP announced a new partnership with Perplexity to bring the Internet alongside SAP data. During the keynote, SAP showed how Joule was used to integrate with Servicenow to perform a function. This hits on SAP’s objective to make Joule available everywhere.

This is on top of the existing 1,600+ existing skills already within Joule. In addition, SAP announced that they are growing the number of industry-specific scenarios within Joule from 230 to 400. Joule is also getting 40+ new agents. It is clear SAP is putting a lot of work into Joule to create value for customers.

AI Agent Hub

Beyond Joule, enterprises need a platform to manage all of these forthcoming agents. The race by many enterprise vendors to dominate the AI agent platform is on. Companies such as Salesforce, Servicenow, Informatica, and hyperscalers are all vying to be the platform where enterprises build their agents. Each has their pros and cons to doing so.

SAP announced their own AI platform, AI Agent Hub. AI Agent Hub leverages SAP LeanIX as it already understands the underlying business context. The advantage for SAP is that their agents understand this business context and governance out of the box. This is due to a combination of already having access to the business data and SAP’s many decades of business experience. Joule’s ability to tap into SAP Business Data Cloud is a powerful opportunity for both SAP and their customers.

Building agents is a key part for enterprises leveraging agents. SAP BTP is their app development platform and now has AI support with 90+ new integrations. BTP is also supported on all three of the main public cloud providers.

Couple of side notes… First, SAP is building training programs to help customers understand how to build and leverage AI agents. Across the industry, AI education has been a hurdle to AI adoption and consumption. Second, and it may be a nit, but SAP has not been using the term ‘agentic’ except for a couple of mentions in passing. Under the covers, Joule does work in an agentic way, but the lack of using the agentic term in favor of simply saying AI is an interesting move.

Expanding the data platform

Underpinning AI and applications is data. SAP’s applications and AI both leverage their Business Data Cloud product. When SAP announced BDC earlier this year, they came out expressing additional support for BDC on AWS. Today, they announced expanded support to leverage BDC on the other two major public cloud providers: Google and Microsoft. This opens the door to further cross-functional data opportunities.

A macro view for CIOs

When I speak with CIOs, the SAP brand is well known, and their history comes through. SAP made some big bets several years back with concepts like cloud for ERP, clean core and AI. Those bets are now paying off for both SAP and customers.

The reality is business is complicated. SAP is leveraging their history but not limiting themselves to the past. SAP has a lot riding on their platform from a commerce and trust perspective. Even so, they are accelerating the rate at which innovations are coming into products and services without compromising on the stability they are known for.

That’s not to say that SAP does not have challenges. SAP’s history is both a benefit and a challenge. They are actively working to bring customers forward. At the same time, they are working to scale the onboarding process to adopt SAP. To be fair, in reality the process to change any ERP or core systems is not trivial and there are bumps along the path.

The tradeoff is that SAP has a wealth of data and insights that provide enterprises significant value. In many ways, those will offset the challenges to get there. Based on what I’ve seen, there is a lot of work SAP is doing to be inspired by.