SAP’s Facebook for Companies Trails IBM in Soaring Market
Martina Girkens is determined to change the way Continental AG (CON)’s 160,000 employees work together in what amounts to a micro version of how Facebook Inc. (FB) and Twitter Inc. have linked more than 1 billion people.
In the past two months, Girkens has helped more than half of the German auto supplier’s workers set up online profiles that let colleagues find each other and team up when specific skills are called for. International Business Machines Corp. (IBM) provided the internal social networking system, even though SAP AG (SAP) runs most of its back-office programs, including personnel management software. That’s a headache for the company’s technology staff.
It’s a typical conundrum for many customers of SAP, which has lagged behind efforts to provide social networking software for corporate customers such as Wal-Mart Stores Inc. and Apple Inc. (AAPL) Now, Walldorf, Germany-based SAP wants to catch up, challenging IBM and Salesforce.com Inc. (CRM) in a market that’s growing 60 percent a year and will reach $6.4 billion by 2016, according to Forrester Research.
“We’d like to see a better integration of tools in the workplace, so you don’t always need to switch back and forth between programs,” says Girkens, Continental’s head of technology for corporate functions.
SAP has boosted its presence in the market with the acquisition last December of SuccessFactors Inc., whose software includes Jam, a program featuring a Facebook-style layout, video integration and tools to help new hires get up to speed. SAP also offers StreamWork, a collaborative decision-making tool and a rival to Microsoft Corp. (MSFT)’s SharePoint.
The increasing demand for employee productivity has also fueled the growth of independent makers of social enterprise software, including Jive Software Inc. (JIVE), which shares have jumped 50 percent since its initial public offering in December. Salesforce.com, which offers Chatter as an internal business-collaboration platform, has surged 35 percent this year, beating SAP’s 19 percent increase.
SAP slipped 0.1 percent to 48.74 euros at 2:28 p.m. on the Frankfurt exchange. The company has a market value of 59.9 billion euros ($77 billion).
For companies that make such software, the main advantage is connecting directly with customers’ employees, strengthening their hold on a client, says Ray Wang, chief executive officer of Constellation Research Group in San Francisco.
“The world of enterprise and consumers are blending,” Wang said. “That’s why social is critical for a company that’s trying to defend a billion users from someone else’s sales activities.”
After focusing on routine enterprise tasks like payroll and supply-chain management for the first 35 years of its existence, SAP, beginning in 2007, ventured into business analytics, software for mobile devices, cloud computing and databases. The company wants to add a new field of business every 12 to 18 months, Co-CEO Jim Hagemann Snabe said last year, singling out collaborative software as the next category.
Office workers at Hanover-based Continental can use the IBM program, called Connections, to navigate internal forums, write company-wide blogs, and find peers across the world. The initiative also involves Microsoft’s SharePoint to collaborate on documents and IBM’s SameTime for chatting.
Girkens plans to add editable Wiki documents and a search function which helps weed through unstructured content.
About the same time Continental started its social network, SAP hired consultant and blogger Sameer Patel to lead its entry into the market.
Patel, who has advised clients like Intel Corp. (INTC) and Oracle Corp. (ORCL) on collaboration, says solutions have to tie into business processes, like customer-relationship management or material sourcing, where employees actually encounter ad-hoc problems, rather than being a blanket forum.
“You need to have the level of depth around these core processes that SAP has offered for 40 years, where social becomes more focused and works as an enabler,” said Patel, who is scheduled to discuss SAP social networking software today at the Sapphire conference in Orlando, Florida.
SAP today began offering its mainstay software including payroll and supply-chain management via the Internet, Lars Dalgaard, the head of cloud operations, said in Orlando today. The service contains software to interact with customers via Facebook and Twitter.
SAP’s 55,000 employees now have the option to use SuccessFactors’s Employee Central platform internally, including performance-review functions, Chief Information Officer Oliver Bussmann said in an interview.
Since many companies have already signed up with competitors, SAP can’t afford to simply offer what’s already on the market, said Ramon Baez, chief information officer at Kimberly-Clark Corp. (KMB), the maker of Huggies diapers.
A Kimberly-Clark engineer in Wisconsin was recently trying to set up a business-to-business website where clients can validate multiple products by running a test on one single sample. He wrote about his problem in an internal messaging group and got the solution from a U.K.-based employee who had written a book on the matter.
Baez, whose company started using Chatter last year, said any new solution needs to be accessible from anywhere, via the so-called cloud, and the social network should support video messaging. Currently, Chatter and SharePoint don’t work together, he said.
Like Tablet Computers
“If you looked at the tablet market last year with the iPad, the Samsung Galaxy, the Playbook, only a couple survived,” Baez said. “There may well be room for competition, but if SAP wants to come up with a solution, they have to show how it’s going to differentiate.”
Other independent makers of social enterprise software include Yammer Inc., Box Inc. and Lithium Technologies Inc. SAP’s venture arm has invested in the latter two. Taking over a smaller company makes sense for SAP to help plug gaps and boost adoption, Constellation’s Wang said.
As SAP and others push forward on corporate social networking, they may find many companies willing to take a look at their offerings.
“We definitely don’t want to be too dependent on one supplier,” Continental’s Girkens said. “The aim should be to obtain as many synergies as possible, but not to be locked in with proprietary formats and interfaces.”
To contact the reporter on this story: Cornelius Rahn in Orlando, Florida at firstname.lastname@example.org