you for joining us by the webcast. I'm Jim Deber from SAP. We are very pleased to come before you today so quickly after the close of SAP's acquisition of Hybris just 4 working days ago, last Thursday, and very excited to share with you some more information about what this means for the future of the customer experience. Joining us today will be Jonathan Becker, the Chief Marketing and Communications Officer from SAP also Ariel Luedig, the Chief Executive Officer of Hybris Mark Ferrer, the Chief Operating Officer of SAP Global Customer Operations. We will also be joined by Susie Sapsara, the Global E Business Manager of MSA Eric Larson, the Managing Director, Digital Data and Analytics of Accenture and Steve Kramer, the Executive Vice President for the Americas of Hybris.
So we will have some presentations from our execs and shed some information. We will also have a panel session for you and then we will conclude with an open Q and A session. We will encourage everyone here in the room to ask questions at that time. We will also invite anyone participating through the web to submit questions either to presssap.com. That's presssap.com or on Twitter.
Today's hashtag for the event is omnicommerce, that's one word, omnicommerce, o mnicommerce. Thank you. So we encourage you also to throughout with thoughts, comments, anything that is of interest to you about today's event. And having taken care of that without further ado, it gives me great pleasure to introduce Jonathan Becker.
Thanks, Jim. I'd like to add my welcome to all of you here in New York City and those of you online joining us from around the world.
So So I'm
going to start with a very simple statement. Bringing SAP and Hybris together redefines the future of commerce. It will change how every company around the world engages with their customers. Now you notice I use the word engage. Some of you who came to this press conference today or attending online might have had a different frame of reference in your head.
You might have thought about customer relationship management. But to us, it's not about managing relationships with customers, and I'll talk more about this. It's about how do you provide a consistent, unified and compelling experience for consumers. So the phrase I'd like you to think about is customer engagement. And I'm going to resist turning that into an acronym, but I'm sure somebody will do that.
I'll check Twitter when I sit down and that will turn into some kind of 3 letter acronym. So what does that really mean? How do I think about that? Well, we know that the way consumers engage with companies, the way they engage with brands has fundamentally changed in the last couple of years. Consumers are digitally empowered.
They want self-service from how they find products, how they research products, yes, even how They want to do it by themselves. They want to do it digitally often without a salesperson. Sorry, Mark, no offense. In fact, research has shown that nearly 80% of the people report that they go through most of the buyer's journey from discovering what they want to actually purchasing it without talking to a single human being. When they do research things, when they try to find out more about products, they really don't go to vendors anymore.
They don't really read vendor brochures and they don't often go to vendor websites. What do they do? They crowdsource their research. They go to alleged experts, I say alleged because you never really know online. They go to social and they ask them for their opinion.
This is why more than 50% of consumers have said they changed their mind about buying a product and canceled it instead after reading a negative review. So they were going to purchase something, they changed their mind. What does this mean for companies? What does it mean for brands? It means that we have to listen and respond to a whole host of digital signals across the web, not just the signals that are owned on website because we've gotten pretty good at that, but signals that are across digital properties that we don't own and we don't control, certainly those that include the social sphere as well.
It also means and I think this is maybe even more important, we have to change our mindset from thinking about controlling customer relationships and automating them, which has been the mindset of the market for the last decade or more to thinking about how to provide that holistic experience. And that mindset shift shows up in study after study. A recent study of retailers showed that the number one concern a retailer had was how to provide a consistent experience across all the interaction points to their consumers, from the call center to the physical store to the online store to the social world. All retailers knew that there was a number one consideration. And yet more than half of them said they couldn't even identify a consumer across all those channels.
They didn't know that somebody on the call center was the same person in the social sphere and the same person in their store. Big challenge, tough issue. As a CMO myself, I know this is not just a retail phenomenon. Almost every marketer I talk to in almost every industry has the exact same challenge and creating a unified customer experience along with the challenge of big data are almost always the top two things I hear when I talk to CMOs around
the world. So we know that this
is a problem. We know that this is the heart of the issue. And so what you've got is essentially the rationale for the acquisition in a nutshell, thinking about the customer experience. What SAP and Hybris together are doing is allowing our joint customers to solve the omni channel commerce challenge. Now I know that was a bit of a mouthful, so I'll say it again more slowly, the omni channel commerce challenge or as we sometimes say it for short and that was the hashtag you heard Jim say early, omni commerce.
If you solve that problem,
then you can finally tackle the unified customer experience problem and increase engagement. Now most of you probably think this is a B2C problem, a business to consumer problem because that's what we hear about all the time. Right now, the most popular phrase that I see in the press around this topic is showrooming. You don't know the phrase showrooming, that's when consumers research a product online, let's say in their home and they go to a physical store to check it out IRL in real life to feel what the product really looks like. And then often we're in that store, that showroom, they use a mobile device to see whether the price there is the best price or maybe is better someplace else.
And they don't buy it necessarily in the store, they go back home and buy it online. To add insult to injury, if they end up not liking it, they might return it to the store that they checked it out but didn't buy. This is the fundamental problem that we show, but it's not just a B2C problem, it's a B2B problem. Because business consumers or business people want the same consumer grade experience that B2C has. In fact, you might be surprised to learn that the market for B2B Commerce, so Business Commerce is 3 to 4 times bigger than the market for consumer commerce.
I thought I'd give you a couple of examples from the SAP Hybris joint customer base. The first one I want to give you is Grainger. Now maybe not everybody who's attending today's press event knows Grainger, but they're a large distributor of industrial supplies, things that maybe most of you don't actually buy. And they do already today more than $2,000,000,000 of commerce on the Hybris platform, nearly 25% of their overall revenue. To give you a sense of the total scale here, Grainger has more than 1,000,000 products in their product catalogs, 1,000,000, servicing more than 2,000,000 people.
This is a huge deployment. On a good day, there are about 500,000 orders that go through the system and those orders are connected from Hybris to SAP CRM and SAP ERP. It's a wonderful deployment. That's clearly B2B and not B2C. Another example is Nespresso.
Some of you may have heard about Nespresso if you were at Sapphire Now in Orlando or listened online. Nespresso are the makers of those little coffee capsules and coffee expressers as well. It's also an extraordinarily large deployment. More than 8,000,000, that's right, 8,000,000 consumers use Nespresso and about 200,000 orders per day. To me, what's really compelling about this particular deployment is the fact that they had used the exact same platform for the consumer side B2C as they do for the business side B2B.
Most companies have a different set of deployment depending on whether it's B2C or B2B. So it's a fundamentally different approach and one that I think we're quite proud of that Ibrance has been able to do. So regardless of whether you're B2C or whether you're B2B, you can do that on one single platform, which brings me to a simple statement again. To me as a marketer, I'm extraordinarily excited about it. This is a great example of an acquisition of a coming together of SAP where 1 +1 equals 3.
Now I know I didn't really fail 1st grade math. 1 plus 1 really does equal 3. That's what happens when the sum of the parts, the total is even more. And I don't want to steal Ariel's thunder. He's going to talk a lot more about the technology behind.
But I do want to give you 3 simple examples of how it's better together. The first is Hybris was quite successful in Europe and in North America. But we think as part of the SAP family, we see tremendous interest in emerging markets. China alone is the 2nd largest market large commerce for e commerce and largely untapped by the Hybris family, although they have some wins there as well because the system is completely available in Chinese and Mandarin and Doublebyte, etcetera. That's the first, untapped markets in emerging markets.
The second is, when we take our technology SAP HANA and embed it inside Hybris, we've already started to do, Harry, I promise I will allow you to talk more about that in a moment, and essentially turbocharge that environment. We've all heard a lot about the 0 moment of truth. And we know that inside commerce, you need to worry about real time interactions, real time recommendations and real time marketing. With HANA and Hybris coming together, that is no longer just academic, that is reality. The final point I'll make of bringing the 2 together is imagine what happens when you take the leader in commerce and put it together with the Ariba Business Network.
There are already more than a 1000000 companies on the Ariba Business Network, conducting almost a half a $1,000,000,000,000 of commerce. Those are waiting buyers and sellers now can be connected together with your system as well, fundamental opportunity. So as a CMO and as a marketer, I'm extraordinarily excited about this acquisition. I know that every single customer interaction with every single customer matters. I can't wait to see SAP and Hybris together fundamentally change because we have the insight on what customers are expecting and the execution to cause that to happen.
The future has actually already arrived. Commerce and the customer experience has been reinvented. Thank you. So with that, I'll ask Ariel, who is CEO of Hybris to come up and talk us a little bit more about Hybris architecture and what he sees from his point of view.
Morning, everybody. As you can hear, I'm not a native American. I'm a Swiss and they told me I have to stand here. So I would like to talk a little bit about hybrids, not about technical architecture. I don't think that's of much interest, but about where the market said it, we're talking about commerce.
So we're talking about revenue generating processes within a corporation, which is a new topic more or less for SAP. SAP traditionally talked about efficiencies of internal processes, costs, cost savings, time savings or savings in terms of supply chain management through the acquisition of Ariba. But actually the relationship with the customer and the support of the process is where you make money as a corporation that was usually left to other companies. Now with the combination of Hybris and SAP, we have now an end to end story to offer to our joint customers. And that's commerce now.
That's all we do at Hybris. We have done this for the last 15 years. And it says commerce, it doesn't say e commerce. E commerce is one channel. But as you know, our customers are using many, many channels.
So what is the problem that we can solve with our customers? We have customers being global deployed. We have customers in retail, in manufacturing, in telcos, in digital whatever. But most of them face this problem here that they cannot control the behavior of their customers. We behave differently than they expect.
In the past, it used to be a linear process, TV ads, stores, order done. Now we have all these choices. Retailers, for instance, say, oh, we would like to have this single view of customer. That's already the wrong approach. That's the inside out approach.
You have to think about customers having the single view of a brand or the single view of a retail seller. So that's how things have to turn around. And we have to make it easy for our customers, consumers or business customers to actually interact with ourselves. The expectations of us because we are all customers are very simple. We want 3 things and this sounds very simple, but they're hard to do.
One is whenever we touch one of these channels, we expect to get the same answer. Sounds simple, it's not happening. There's different availabilities, different pricing I get. They don't know where the product is, what the order status is, the technical specifications are different on the print catalog than what the call center guy tells me or the person in the store or the web. I'm getting confused.
I'm not buying. I would like to get the same answer even if it's a wrong answer, at least it's the same answer otherwise I get confused. The second thing that we all want is if I start a communication dialogue with a brand or retail whatever and I choose in this process to change the channel, please I would like to continue this dialogue without having to start from scratch. Happening all the time if these channels are not integrated. I do something on the web, I get stuck, I call the call center and they have to stop and say, who am I, what am I interested in and so on.
That should not be. They should know what I have done and help me to finish actually this process. And the 3rd part and probably many more, the 3 I could think of is, I would like to get treated the same way on all of these channels. Everybody is focusing on the digital channels because it's easy. When you go to the web, how Ariel, great to hear that you're back, your best friend and how is the T shirt that we sold you last week and so on.
They think I think really has a friend for life. But on the weekend unshaven with my old jeans, if I go into a store, they look at me as a potential shoplifter because they don't know who I am. So we have to connect these dots and I want to be treated the same. Especially if you have been treated well, if all of a sudden information chain breaks down, you're treated differently, it hurts the most. So think about your frequent flyer status.
I'm a HOD member at Lufthansa economy flyer and that really, really is tough to step down and stand in line. If we talk about commerce, you have to talk about 2 things in terms of dimensions. 1 of them, 1 is infrastructure technology and the other one is customer experience. Infrastructure is what we all talked about our expectations that we all have, it's really hard to do because most of the companies have these infrastructures on the technology side. They're organized by channels and the applications are by channels, the databases are by channels, there's nothing horizontal.
And they connect these things mostly with people. Even all the big retailers you read in the press, how great they are, we talk to them. When we open up the curtain, look behind it, it's madhouse, okay? So there's nothing really organized many manual processes. So what you need actually is in order to have these unified channels is you have to have a single source of truth for data for content, meaning about the product.
One source for product information, it doesn't matter if it's on the mobile then on the tablet, in the print catalog, or the store clerk, on the web, whatever, one source. And they now always get the same answer. So the same source of our product, of our customer, about inventory, about pricing, about order status, one source. But that's what has to be done. It's an infrastructure project and that's where hybrids and SAP can help.
But that's managing this data complexity. The much even more difficult part is managing the process complexity. And this madhouse started when they connected digital channels with the real world. And the problem is nobody had a strategy of multichannel or omnichannel whatsoever. We invented this.
Now our customer Toys R Us is doing online in the U. K. With us. Somewhere in the world in 1 year somebody ordered something online, let's say Toys R Us went into the store at Toys R Us because he wanted to return it. And the person almost fainted because he didn't know what to do.
You ordered it online. What does it have to do with me? If you purchase something on me, then you can return it. So this integration of channels didn't happen because somebody had a great strategy. We forced it onto these industries and retail was the first to be forced into this omni commerce thingy.
So that's why we have this crazy process, this order online, pickup in store, order online, return in store or order online or reserve online pickup in store, going to the store for ordering for home shipment. There's so many processes all of a sudden possible and it's very hard to manage. So we have a process complexity. So the nirvana to solve this is what hybrids can offer together with SAP. But the ideal solution is something horizontal, something integrating all these channels both from a data layer point of view, but also from a process layer of view and also from a business logic.
And these yellow pieces are pieces where we can provide software to support these commerce things. So single source of truth, managing the process complexity, reusing logic. Why should you have promotion logic for each channel? You should have a promotion of vouchers or cross sells or personalization logic and you can use it in all the channels. So that's what we can provide and that's how we can help our customers.
What we see is that this customer facing process are slowly coming altogether. So there is a new software category being created and you see this with all these acquisitions and consolidations going on. In the past, we had companies there just doing search and navigation on websites. You had companies only doing personalization. That's going to be commodity as part of a commerce platform like hybrids.
So this new enterprise of the car, we don't have a name. Jonathan tried one name. I don't know what the name is. 1 is back office, it maybe is front office, it maybe is enterprise commerce, maybe it's customer, what you call, in customer engagement, we don't know. There are no analysts out there yet who have named this space, but we believe like ERP, What was the story before ERP?
I'm old enough to remember. You had yes, you had PPS systems and HR systems and general ledger and accounts receivables. They are companies in all these different markets and they all came together because it made sense. And the same thing is happening around the front office. Offices.
And obviously, we as hybrids want to be the leader together with SAP, the leader in this space. And we provide these functionalities to increase or make this customer experience better. So talking about customer experience as the second part, we believe that our competition or companies out there define customer experience way too narrow. They're only looking at the paint of a building or at the screen of a TV, nice pictures, great search or personalization whatever. This is not customer experience.
That does not help you to be successful. Customer experience that does not help you to be successful. It has to be much, much wider and much deeper to actually have a good customer experience and I'll tell you why. 1st, Amazon, Morgan Stanley says Amazon will have 26% of global e commerce market in 2016. Why?
I mean, this is a terrible website. This is so 90s. Products all over left and right, very, very old personalization technology. I even wrote a white paper about it 20 years ago about collaborative filtering. Very simple.
When I ordered a book from my gard child, we need a pool and then I ordered a book for IPO because we plan to do IPO before we made SAP. And then they want to be clever. They say, oh, this must be a pedophile investment banker and try to make it something. So that's very, very old technology, but they are doing really well. Why?
Because it works. It works. The customer experience is terrible, but it works. And that's why I'm talking about end to end and deep customer experience and not just the pain. So Amazon is a proof that you can be successful with a bad customer experience, but good execution.
It's actually more fulfillment company than anything else. But if you do it the other way around, a great customer experience on the touch point, but bad execution you will fail. Just imagine if Amazon also would have a great touch point customer experience. So customer experience is end 20, you have to fulfill all these issues. The returns management has to work.
You have to give the customers options how to order things and how to consume products and so on. And that means you need a deep integration in the back office systems and that's why we're so interested with SAP. We can deeply integrate it into SAP, make sure these processes end to end really work, plus a great customer experience at the top end. We might even connect like Jonathan said, chain. Just imagine the new business model we could provide there.
What's next here? Hello. Thank you. So we believe mastering this data and process complexity is actually the key point to a great customer experience. And most of the companies out there talking about customer experience, they look at the wallpaper.
And we look at the building, the foundation of the building, the walls, the insulation, the fixture, everything plus the wallpaper on top of it. And that's what our customers are doing and Jonathan gave you a few examples like Grainger and Nespresso. B2B actually is bigger. Just imagine Grainger has 1,000,000 products and 2,000,000 customers, companies buying. Now in B2B mostly they negotiate every price.
So every customer has for every product usually different prices. So multiply 1,000,000 products by 2,000,000,000 you get 2,000,000,000,000 or something. But really it's a lot of pricing you have to keep track of. That's why it's much more complex to do these things and that's why there's hardly any competition. There's a huge runway for hybrids and SAP.
Everybody is focusing on B2C because it's easy or so they think it is. H and M, the 2nd largest fashion retailer in 42 countries doing great work. Nikon, again, a customer using B2C and B2B in one installation in Europe and in the U. S. But we also have other business models.
So we support B2C, we support B2B, we support customers doing both like you see there. If customers having marketplaces And I don't get confused, marketplace sell side marketplaces. So DHL for instance has a marketplace with hybrids in Germany selling 1,000,000 SKUs having about thousands of merchants that actually want to compete against in Amazon in certain markets. We have Kalahari, the largest marketplace in Africa with 20,000,000 products and hybrids competing against Amazon because in certain markets Amazon is not there like in Russia our customer is our zone and Amazon is not really there, the same in Asia. So many business models we can support there.
And the other interesting piece is and that's why for closing, why we think we have a huge runway is how deep and wide this is being used. So we can address many, many verticals. Retail is a big one. We're working on manufacturing, digital, wholesale, telco. We're working on large companies, on smaller companies.
We provide the solution on prem. We provide the solution on demand or in a hybrid model. We provide non SAP. Even our SAP. Even our SAP customers have maybe multiple ERPs because they acquire companies around the world.
So we will be agnostic on the ERP side because the market demands it, the customers demand it, but we will be the best integrated solution if a customer has SAP and you will see some announcement in this respect very quickly. To close, that's the picture. That's the world now. We wanted to make it very simple. I can't get it any simpler than that.
So the customer facing piece is hybrids, managing these devices, these touch points, managing sales and marketing related content and processes and sales related logic, integrating into the ERP, managing all these internal process and maybe even into the supply chain. And that's why it's like a hand in a glove. There is hardly any overlap and that's why we were able after 4 days to start talk about it. I used to work at Oracle or salesforce.com after an acquisition at Oracle. It took them months months of infighting before they could actually have a strategy what is going to survive and how this is going to work out.
It's so clear how this works together. That's why we could talk about it after 4 days. And with this, I would like to close. Thank you very much. We show you now a little video about
At Hybris, we believe technology works when it connects it. And when we can make those connections ourselves, that's even better. But the best experience we have with technology is when it disappears, gets out of the way, when it becomes invisible. When as users we feel as if we're interacting directly with a service because then it feels like magic. So let's watch what happens when Dina, Clara and Eli combine some hybrid commerce functionality, Facebook and their phones to enhance the shopping experience.
Using a gesture based product with Navigator, Dina Franzen shoes to add Perfex for a special date. Sadly though, the store is closed for the day. And as you can see, she's pretty disappointed. Luckily though, Clara notices an NFC tag in the window. A few days later, Dean is walking near the store when she receives a geofenced alert.
And she sees that those shoes are on sale and just around the corner. Offline, online, social, mobile, with Hybris, everything is connected. It's the future of commerce now.
I know it, you know, feel like I'm back in the 3rd grade. Susie, Eric, Eric, thank you very much for joining us today. We really appreciate you being here for our launch event. And Steve, welcome to the team. We're very excited to have you on board.
When you take the assets that Hybris brings to the table and combine them with our mobile products, our analytic products, our cloud products, it really provides a robust offering to our client base. But then you look at 40,000 plus ERP customers and what we're able to offer them, whether you're in the Middle East and you're a retailer, you're in China or you're in the UK, I think it clearly was a hand in glove relationship. And so we're very excited to have you on board and I know our teams are as well. So with that, I'm going to run a little bit of a panel here and we're just going to I'm going to ask a few questions of our panelists and get their feedback on the relationship between Hybris and SAP. So Susie, it always starts with the customer.
So we're going to start with you. And so I'd like to get your perspective, being both a SAP customer as well as a high risk customer, what's this mean for MSA?
Interesting to hear the previous presentations. It's actually really exciting for us. We are a heavy SAP user, both CRM and our overall ERP system. And we implemented Hybris using PCM globally on 40 websites in 20 languages and is heavily integrated with our SAP system. We just rolled out commerce in the U.
S. So for our B2B customers. So the integration with SAP was critical. It was it's exciting to look forward to as we keep rolling out these commerce sites, there are plans to roll that piece of our interaction with our partners globally over the next several years in different locations. So as we move forward with that, it's exciting it will be exciting to see how that integration gets better.
That's great. So tell us
a little bit about MSA and why did you start with PCM As you looked at the offering, what was the intent to start there?
So MSA is one of the premier manufacturers of safety products. Our primary industries are oil, gas and petrochemical, the fire service and construction in the energy market. And we are a global organization. Like I said, we have 40 websites now, locations all around the world. And the challenge So in the U.
S, we're very big in fire service and in certain parts of Europe also big in fire service, but not so much in other parts of the world, right? So and the challenge is we have a huge global catalog with a variety of different products that we manufacture, but we sell different products in different parts of the world too. So the biggest attraction with high risk for us was that TCM concept,
That's great. And clearly customer intimacy for you has got to be important as you drive the relationship in that business.
It is. It's challenging for us because of the diversity of our customers. So we really just started getting SAP CRM implemented and we're really looking forward to kind of how that will integrate with our Hybris platform too. Great.
Eric, why don't you give us as a strategic partner of both companies, why don't you and particularly running the digital at Accenture, give us a perspective of the SAP Hybris relationship and what that could mean for clients?
So I'll just extend the hand in glove analogy and the hand that we've been using this morning. So, 2 hands are better than 1. We've had a hand in glove relationship with SAP that's well documented with over 30,000 practitioners doing SAP work around the globe. But what's a little less known perhaps is a relationship with Hybris, which started out very strong in an organic way in Europe, and through our recent acquisition of Acuity Group here in North America, have become the largest provider of high risk related services. So together, that coordinated effort can be really impactful as we start to see this shift to much more energy around the B2B space being treated with the same kid gloves that the B2C space has enjoyed for so many years.
And so as you look across because you cover a spectrum of industries in your global role, as you look across, what industries are you focusing on as you look at this relationship going forward? So several of
our client examples today were actually Accenture clients. So Grainger is a great example of a client that's come on board through our Acuity acquisition, but also Nespresso is a substantial client for us doing that work with the high risk and SAP stack. So I don't know that there's any one industry, but certainly, the resources industry is going to come on over time with a big SAP base. We see a lot of companies in the natural resources space looking at this now that haven't been spending as much energy, but retail and consumer goods will continue to be very strong as well.
And as you look at markets between mature markets and growth markets, do you see one being more important than the other? Or do you think it's pretty much a broad stretch?
With Mike Global hat on, I'm not allowed to play favorites, but we certainly are spending energy growing in Asia Pacific. We just recently went live with some hybrids implementations there in China in particular. And we've been experiencing a lot of strength across Europe and North America as well. That's
great. And Steve, give us
a perspective. We announced the intent to purchase back a couple of months ago now. We've closed transactions. I'm sure you've gotten a lot of commentary from your client base running the Americas for Hybris. What are you hearing back from clients as you talk to them about this relationship?
So it's a good question. So Hybris is a very customer centric organization. And I think that one of the things that was most interesting to us as we're evaluating various options was that SAP shares the same strong commitment to customers and people as Hibras did we share those same values. So and I think the industry knows that as well. So certainly our SAP customer base felt as though it was just a matter of time.
It was 2 pieces of a puzzle that just had to be put together.
That's the glove analogy.
Sorry about that. Our non SAP customers were quite excited as well. SAP is an extremely innovative company. I think they view this as a way for us to accelerate our vision of omni commerce and to provide a lot more value to their organizations. Jonathan and Ariel were right the future of commerce is now.
But what we're also doing is we're future proofing our company's businesses functionality and modules that we bring to market. So I think that the customer base, the industry has seen this as a positive move simply because we're able to move the needle a lot quicker.
Yes. So that's great. So as you look at coming on board with SAP, we're a very large organization and you are a large organization, but nowhere near substantial as we are. What are you hearing from your team? Are they excited?
Are they nervous? Being the
sales guy, I got to ask that question. I want to I haven't heard any negative feedback. I mean the team is just totally energized with the size of the SAP customer base with the opportunity we have. The opportunity is just enormous. And so everybody is really energized about continuing to deliver our vision to the industry.
We have an opportunity right now with SAP with the integration of HANA to change businesses, to change industries, to change people's lives and to fulfill this vision that we've been educating people on and working on over the last 15 years.
So on that point around HANA, maybe I'll ask Eric and Susie and maybe Susie you can comment first. As you now all the collection of this data from social to what you're getting as far as the interaction on your commerce platform. What do you how do you see that data being leveraged and how are you going to change the knowledge side of this thing for MSA?
We have in the past have gathered spent a lot of time gathering a lot of data like a lot of companies and not using it. It's just people spend tons of time getting leads or trying to capture some reporting with our customer call center and things like that and information just sat there. For something, I'll take a very simple example. We have a product registration process that is in place globally for our products and it helps us to get the initial intention because of our industry, because it's all around safety in people's lives was so that if we had an issue with the product, we would be able to push out communication around that to sure people stayed safe. Well, I'm a marketer.
So I said, well, wait, we could use that for a lot more things to sell products. So we have a lot of products that have sensors in them or things like that that have a short lifespan, couple of years, 3 years, whatever, and they just get replaced. Something as simple as that with if it was more automated and didn't have to have as many hands on it and data issues, we could leverage that a lot better.
We've got something to help you there. We'll have to talk later.
I'm sure you
do. And Eric, we have a strategic relationship with Accenture being SAP and particularly around HANA where we've gotten into some very deep co innovation with Accenture particularly around the customer experience and the knowledge that we can provide back. So can you comment from your perspective of what this data can mean for all the industries that you talked about before?
Yes. With the addition of Hybris in particular, it gets really interesting because for so many years, we've talked about getting the right information to the right people at the right time, right? And it just it makes sense, yet now there's the best excuse ever to do that, which is the bottom line. So with the financial transaction being tied up directly towards that customer journey and having all of that infrastructure and knowledge engine there, we now have the opportunity to do that and for it to be rewarded by the Board or whomever else is measuring the company's performance.
And all in real time? And all in real time. So as we look at this future relationship between us and Hybris, I can tell you personally from our sales force feedback and we started the education about 5 days ago ago as we closed the transaction. I couldn't anticipate the amount of excitement that our field has of what they now can go particularly in the industries that we talked about retail, CPG, wholesale distribution, telco, manufacturing. Across those segments of what we can deliver as a value statement to our clients with the assets and the relationships that we already have.
So Steve, very excited to have you and your team on board and working with you closely. Eric, Susie, thank you very much for taking the time to come with us and share your thoughts with us today. And with that, we're going to close with a short video and then we'll start with a Q and A. So thank you very much.
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Okay. We're going to start our Q and A session. Ask Mark, Jonathan and Ariel to join us on stage here. We will ask the people in the audience to raise your hand if you have a question and we will remind everyone who's joining us by the web that again you can submit questions to presssat.com or you can submit questions on Twitter at the hashtag omnicommerce. So do we have a question in the room upfront here?
CMO Advisory, now it's working.
No less of you, Rich, if you didn't have a 2 part question. Go ahead.
So Susie, on the previous panel, e commerce manager. But my question is, since these applications are obviously more than the e commerce, if I can
understand more about the
customer within the vendor organization, CMO or others? Maybe you can talk around the complexity of the buying team. I'd like to hear a bit about that for this application. And then the second part of the question is, it seems to me that in this purchase and deployment, you've now got a lot of channels, whether they're physical or virtual that need to be sort of wired in and then buy in to these deployments. And I'm wondering how that also impacts the purchase process and the extent to
which you need to now just sort of sell this
into all the channels that are going to be using these applications. And you have to respond to it, but an English major can understand it.
You store the buyers sold to historically and then we can add some company commentary what might happen in the SAP.
Going a couple of years back, we usually sold to somebody in charge of a channel. That was the old days of e commerce. So there was somebody in charge doing e commerce, it was the easy days. Sometimes this person actually purchased hybrids with the intent of actually more across other channels, but we were not allowed to talk it. For instance, Henkel, a German company, we did we called it a web application.
In the end, everybody was using this application across all the different channels. So at that time, it was single channel and we were talking to each of those single channels. And it's because I said it's commerce, it was always people who were in charge of the business who actually owned the number. So somebody in charge of sales, some in sales and marketing, some in charge of a channel like SUSY is. But this has changed dramatically because of how the market changed, the organization has changed as well within the companies.
So we actually have now counterparts in large companies who are in charge of omni commerce for instance. So for us it's actually much easier. We still have both types of deals going on, just 1 or 2 channel application or a transformational project that these are the ones obviously we're most interested in and Nexenci is most interested in. So we have a counterpart to talk about it and they have the charter to actually make sure that this goes across horizontal in the organization. But in many times, as you said, it's accompanied with a change organization change within those companies.
So it's sometimes tough because this technology actually creates a change within how these companies are organized. But it's getting easier and easier because we have somebody who actually carries the title of omnichannel commerce.
Rich, I might just add, I think you've written about this yourself. So it's not new news. There's a rise of a new title, whether you call it the Chief Experience Officer, which kind of conflicts with CEOs, so we won't try to turn that. But increasingly companies are naming somebody whose job it is, even if they don't own all the resources to make sure that they marshal the head of consumer or customer experience. In retail that's increasingly moving from merchandising to marketing and other industries is going to the Chief Revenue Officer.
It doesn't really matter, but there's often somebody that you can find whose job it is to create the unified customer experience. That's the ideal candidate for most of our processes.
And the only thing that I would add to that though is when you combine that with things like customer loyalty, you're going to have multiple buyers in the SAP ecosystem, right? As you combine these things, it can be marketing, it can be the brand management team, it can be the Chief Operating Officer in these clients. And I can name retail clients right now that we're having those conversations with. So it's a broader set of conversations because in a lot of cases to the real CEO, this becomes a CEO agenda item. Exactly right.
Thank you very much. Next slide,
2 years ago when the customer experience title sort of came on the horizon, I don't think a lot of the teams really knew what that was supposed to be. It's just the Head of Customer Service. But with your discussion today, I think it's clear what a customer experience officer needs to be in charge of. Thank you
very much.
Okay. Looking
for the next question in the room here.
I think we had a second was the wiring.
Okay. I'm sorry.
Thank you, Mark.
So the question on the wiring, I think we've already done a lot of work very quickly. I'll turn some of this back over to Ariel. And a piece of this is they're database agnostic, they're ERP agnostic. And so they connect to a lot of other back end systems. And so they're used to having that open infrastructure and making those connections.
And so bringing that experience in with our development team, we're very encouraged by what we're going to be able to do. And I know Ariel, you've been working with them as well.
Yes. Not much to add actually. For us, for instance, it was quite easy to port TypeRise on HANA because we're not using any native functionality of relation databases, for instance, and also because we have so much experience on working with SAP customers. But you're right, these horizontal systems, there's so many touch points into the organization. You need to have a very flexible framework.
And that's why companies or CIOs were thinking about once they do have this horizontal solution, where should I put the logic, Should I actually expand the ERP system that I have and put it in there and the data? Or should I use something that's more agile? And the result usually was it has to be in a much more agile technology layer because these customer facing processes change all the time. I used to be a mainframe developer. When I built something at IBM, we didn't touch it for 2, 3 years.
And ERP process maybe we don't touch for a year as well if you don't have to. But the customer facing processes, we have customers that do a deployment of hybrids every day. That means a new version of
Good. Okay. Do we have another question from the room? Hi. I'm Michael Schultz with SAP, run the North American retail practice.
Very excited for this combination of 2 titans in the space and really excited to working with your team. Just a question, Ariel, as you work with customers from the first time that your team meets them, how long does it take them to see that moment when they can see that really realize that boy this is really bigger than we thought it was going to be and can impact us? And the second part of this easy 2 part question is how long does it take them to see the value once they start to work with the solutions?
Did that tell you to ask this question? No. No. Usually when we get the chance and that's where SAP can help us tremendously. Once we get the chance to show have face to face with the customer and show them what's possible and usually in the first meeting we actually show them their data and their processes and not just some abstract PowerPoint or whatever.
We usually show them their process and they cannot believe it. So what if we can show them and tell them then the probability that this is happening is very, very high. So our closing probability in this moment is about 80%. But we have to get there. And that's why we are so hopeful on the SAP field organization.
They bring us there, so we can have this face to face moment. Because if you see that stuff working and not a canned same or whatever, we actually import their data, their websites and their mobile application that really does it. The other part is time to revenue, whatever you want to call this. And that's again something we have an edge on compared to our competition in commerce. Competition in commerce for us is Oracle and IBM.
We are just 1 or 2 generations younger as technology stack than they are. And that means it's much easier and more flexible to implement. So usually and you can ask Accenture, their experience with all the platforms there. Usually our time to go live is much, much shorter than with our competition. And like I said, it's not like you build something for 2 years and then you switch it on live.
It's usually you build with a good enough product and then continuously start improving on it. Like I said, Nikon for instance, the camera company, they do a deployment every 2 days. In their case, every 2 days some new functionality is being deployed on the Hybris website. So it goes away from these old ways of building projects, wait 2 years and then maybe you see something, it's to do something quick and improve on it.
Okay. We're going to take one from the web right now. We actually got this one from Twitter and the SAP mailbox. So I think that's multichannel or omnichannel its own way.
But it's about
Are they buying anything? That would be commerce.
Question is about how does Hydrus fit in SAP's cloud strategy? Do you see more customers asking for cloud based solutions? And how does this influence the combined technology roadmap with SAP?
I'll take the first shot of it. I think the beauty of Hybris is just like their omnichannel, their omni deployment as well. They don't care whether they're on premise, in the cloud or a hybrid model. We'll have integration with the traditional SAP CRM and also SAP Cloud for sales. So it's up to the customer to choose what's best for them.
Exactly. I mean, I really like the on demand model. Before hybrids built and worked for ran Europe for salesforce dot com at the time that was before IPO where nobody believed in this model. I really like it. The question is, is it applicable for all the situations?
We waited now for quite 9 years a year of hybrid. So we waited a long time to actually offer an on demand solution. One reason was we needed the big fat checks for on prem licenses and couldn't wait every month to get a little bit, so we wanted more money. So that's one piece. But the other piece is customer facing processes are harsh to do like in a multi tenant SaaS on demand infrastructure.
Why was Salesforce successful with CRM? That's an internal process. Who cares how it looks like? But as soon as it touches the customer, everybody wants to be involved. And to do this in a real controlled way, but still give enough freedom for the brands to express themselves, that's hard to do.
And we had to upgrade our internal stack to make this possible and we launched our on demand version second half last year because I didn't want to build 2 stacks. Now with hybrids, the customer can say, okay, this piece I would like to have on demand or as managed service like for even order management and the more customer facing piece I would like to have in house because I want to customize it a lot because it's something I want to control. So the customer decides how they want to consume it. It's one stack and the customer says which part is on demand and which part is on prem.
Thank you. We will look for the next question from the room.
Hi, Chris Fletcher with Gardner. What's your biggest challenge going to be?
It's actually swallowing or not drowning in tsunami of incoming interest. That's what we're preparing ourselves the last 2 months because once this machine starts to talk about it, we are 700 people in the field, we may be 100 people. That's going to be the hard part, that's 1. And the other one, having the partner ecosystem ready to actually deliver on the stuff you're selling. The selling price is actually easier part, to be honest.
But then you have to have partners who actually implement high quality projects. So we will have to grow the partner ecosystem high risk workbench for instance within Accenture dramatically. So please keep on cross training your guys. I think that's the biggest challenge. And the other challenges you would expect from an acquisition actually did not happen because we discussed them before the fact.
And because it was a decision from our team to actually join SAP, we were not forced to do this. We had other options, even financially more interesting options. But the way they offered us an integration scenario, the culture that we have seen at SAP and the lack of overlap. We didn't have to explain again who is the leader of commerce whatever. They told us you are the experts, you run with this topic, but this is really helping.
So the only challenge is delivery and managing inbound interest.
So the go ahead, Mark. Yes. So the only thing that
I would add to that is, we've gotten a lot of experience now with from Sybase to Bob Jay to Ariba, SuccessFactors, running companies independently because we want to absorb that DNA. As he talked about, it's there's not a lot of overlap. So that DNA of 700 people is very important to us in making sure that we allow that to filter into the rest of SAP. And so we're going to be managing this very carefully. I think your point on the ecosystem of really developing our services partners to get that time to value, building those skill sets so that we can do the connect tissue that makes this stuff real is going to be a key focus area for us over the next 6 months, is really build out those skills within our partners.
That's what I was going to say. All right.
We'll go
for the next question from the room. I'm going
to look to the east side here.
You mentioned overlap. I believe there was a SAP had a web channel experience management solution. Can you talk about what happens with that and what happens with those people, those technologies that SAP customers have? Where do they turn now? What's the path forward for that technology?
I'll take that. I guess I'm on the SAP side. So the go forward commerce solution is clearly high risk. And therefore over time, we'll give customers the option to consider migrating away from our web channel product that we have now into the Hybris solution, but we're positioning Hybris as the right answer. That team is still intimately involved and they're going to help with the integration, the deeper integration of Hybris with SAP ERP, because they have a lot of really good expertise on how that works.
Okay. We'll go over to
Hi, Mike Bizard with IT Business Edge. Going back to what this category is or
isn't named, at
what point does all this stuff kind of just start to flow together and the customer looks at you guys and says, you're showing up with 20 different SKUs and price points, it's too complicated. At what point do you
are doing. We have these suites, B2C, we go by business model, B2C suite, B2B suite or omni commerce suite, it's actually 3 SKUs and they have maybe a couple of options for stuff that's not always requested in those platforms. So we make it very easy for customers. It's a one pager. Our And I think there will be more SAP assets be added around it to make it easy to purchase from a customer point of view, right?
I think you'll see over time that there will be a consistent there are products that automate processes and that's a well known market. There are products that allow you to have greater insight into what's going on. Those are in around data analytics and there'll be products that are more shall we say engaging with customers. And those three market motions, I think you'll see companies settling on over the next couple of years. And whether that's 3 SKUs or 30 is less of the
issue. And Jonathan, you were a big piece of Back in the fall of last year, we started Customer 360, right, which was a bundle of an end to end processes, which came with a limited set of SKUs associated with them to make that buying easier.
That's right. Big focus in SAP. Yes. We're buying. Yes.
We're buying.
Okay. We'll look for the next question in the room.
Let's put it in the back.
Hi, I'm Courtney Bjorn from America's SAP User Group. I'm wondering how you see HANA playing out in the product roadmap and how that aligns with some of the major trends you're seeing in the space?
From our point of view, when I went to SAPPHIRE and saw these presentations and Vishal presenting, I mean, I was really excited. I'm a database guy, being from Oracle a long time ago. You work for everybody. I know, I'm old. It's just 3 companies.
Anyway, so I saw huge potential. One is that this could be a platform just to replace RDB MSs. So and improve the speed of these RDB MSs because the disk wait and so on adds time for response time. So that was one asset. But the other one, much more exciting one is changing the whole market in terms of CRM.
The CRM system right now is totally outdated the model. It's all batch based and so on. So with HANA, I mean, I just heard Hassel saying they took 10 years of the order data from Walmart. They have 380,000,000 orders per day. They took 10 years into the HANA database and they asked questions about it and the latest response number 6 milliseconds or something like that.
Hey, I mean, if you then can collect data from the social networks, from the behavior of the customer on these different digital and physical channels and make some decisions in real time using HANA, that's changing the game. And that's what made us really excited.
Let me just give you 2 potential examples that could happen with HANA and HIBORIS coming together. And they're sort of the opposite end of the spectrum. I'll start with traditional sort of CRM focus, if you will. I saw a recent MIT study that said that leads that are followed up in less than 5 minutes are 22 times more likely to close than ones that are followed on with half an hour. And almost every company today has a batch process and they talk about best in class of 2 hours to respond.
2 hours isn't real time, less than 5 minutes is, 22 times more likely to do. Bringing HANA in will change that equation. The other one is, remember the heart of HANA is actually an unstructured search text engine. So a lot of what we can do is, we talked about building a new website every day, Why not build a new website for each individual consumer every minute? And when you actually do real time personalization, when you actually don't do people who bought this also bought that in a small box to the right, but you change the entire experience based on what they want, you can only do that when you're real time.
And I think that's one of the that won't happen tomorrow and probably not next week, but that is the vision of what this is going to be.
Well, certainly as you look at what we're doing in big data and you look at Hadoop, you look at the social sentiment, you look at all of that and bringing that into a place where you can make real time decisions on your customer experience, it just changes the game. And it's not just changed the game for us, more importantly, it changes the game for our clients. And for instance,
big data, it's not just big data like collecting customer context. That's one part of big data. The other one may be a little bit more boring, but very essential is managing big data in your enterprise. If you take Granger again as an example, like I said before, they have 1,000,000 products, 2,000,000 customers and each customer has for each product and negotiate a price assuming. So that's a $1,000,000,000,000 $10,000,000,000,000 whatever price rose you have to manage.
So what did Grange do before hybrids? I can imagine that. So the whole order process long just before they said check buy, they didn't know what their price are. So they did all the navigation, all the search based on list price. I'm going to say that this is about right, okay, now show me that price, okay, I buy it.
So this is first is the customer experience. I'm just thinking on Amazon or whatever you buy something, you don't know what you pay for until the very end. Or if you search for a product, show me this widget between $400 $500 and it shows it is $10 and in the end it costs $2.50 because it's net price, you actually missed an opportunity to sell a higher priced product. Now with hybrids and with SAP, they were able within the search, this whole customer experience from the very beginning to do search and navigation faceted search and so on based on net prices. That means you have to handle about 6,000,000,000,000 gigabyte of data 6 terabytes of data, which order history and price rose within Grainger.
And you can only do this with a non relational database, for instance, like HANA. So this whole B2B notion of creating a customer B2C centric experience is only possible with an infrastructure to manage this size of data set. Okay. We're going to take one from
the web and maybe we can use this opportunity to clear some confusion around Commerce Network, Commerce Platform. Can you explain the difference between Ariba and Hybris and then maybe use this as an opportunity to talk about what the future looks like in the combination of
Mark, we should test Aerials,
how Willy does what Ariba is. Exactly.
All right. So ahead.
It was on your slide,
I think. Do you remember the thingy? The stuff underneath is Ariba and we have the stuff on top. No, it's very simple. We are sell side, they are buy side.
So they support processes to make the procurement more efficient and save costs for enterprises to buy products and we do the same thing on the sales side.
Do you care to talk about the future? One of
the beauties of bringing the 2 together is when you connect Hybris to the Ariba network then you have all these people already there ready to buy. You have 1,000,000 companies already in their network, dollars 500,000,000,000 of transactions happening per year. So if you're building a brand new site, if you're building a new you've got some willing buyers and sellers already talking to each other.
Instant fun. Instant fun.
We'll take our next question from the room.
Hi. I'm Debbie House from Retail Touchpoints. I was wondering if we could hear a little bit more about Accenture's role in the partnership moving forward. And this might be a question for Eric. How does this announcement of becoming the full global strategic partner with Hybris affect Accenture's relationships with some of the other companies that they've worked with in the past?
Is Eric still mic? You want to take a
few steps back, Eric? Eric?
I'll answer the camera. Ariel was told to stand right there.
We enjoy a lot of great alliances with different software providers. Those won't change. We're really excited about our work with Hybris in both in Europe and North America, and it's rapidly expanding globally for us. So we will continue to manage that ecosystem as we do in practically every sector of our business.
Thank you. Do we have another question from the room? Okay. Take another one from the web. It has to do with I'll combine a few of these.
The SAP install base, ERP install base, some of whom have already purchased some commerce solutions maybe in the past decade. What's the opportunity there? And then I think the other one that we can address in the same question is looking out across the customer base, but also across maybe geographies where do we see the opportunities for SAP and Hybris coming together?
Okay. I'll take an initial shot on that. So I think Mark said roughly 40,000 ERP customers, some of which already have existing commerce solutions, but an awful lot of them do not, particularly on the B2B side. I think Ariel said early on the customer overlap was about seventy-thirty, about 70% of his customer base were not using SAP ERP and only 30% or so rough numbers are actually using SAP ERP. So first of all just from a sheer numbers there are 1,000, tens of 1,000 of upside just by focusing on the installed base.
We also said that we don't want to do this. It is not a requirement to use SAP ERP open to any ERP vendor. I think you said even among the SAP ERP base because of acquisitions you often see a environment there as well. One sort of point that I'll add here though is most of the high risk customers were in fabric in North America and in EMEA. Just the nature of a relatively small company, 700 employees, small compared to the 65,000.
And so we expect a significant uptick in emerging markets, whether it's China that I mentioned, Brazil, Middle East, which I think Mark mentioned, Russia is a big market for Commerce as well. So part of the business problem that SAP will help with is how to get the hybrids brand better known in the markets where it's probably less well known now. So I think the there's a tremendous upside in the SEP installed base, but even bigger upside. The global market for just B2B e commerce technology. So notice I've narrowed it down from B2B and B2C to just B2B and I said e commerce only, so that's a subset of the overall commerce market is something like $40,000,000,000 So there's plenty of opportunity out there.
We're not going to want for opportunities. So I think maybe you will have relationships with everybody at Accenture, but we'll keep you awfully busy.
We want 30,000 harvest developer in 2 years. I love that.
The CPI for the Accenture relationship is 30,000. Excellent. We probably have time for one more. Do we have one more question from anyone in the room? All right.
Then we're going to close it out with another from the web and this has to do with again looking to the future. And if we look at SAP and Hybris and SAP's portfolio for customer experience, customer engagements, other things to be named, Does this complete the picture or is there more to come?
Well, the easy answer is there more to come, but then somebody would be complaining that they didn't actually have a quote out of that. So I'll say that I think of the market roughly in 3 pieces. There's the insight that you need about big data, both big data in your enterprise and big data that exists, where we're in pretty good shape based on the HANA platform and a lot of the analytics that we have. You'll see that we've done work there in social sentiment analysis and a lot of engagement aware. And then there's the experience part where Hybris is the linchpin of that.
We have other assets there as well. And then there's the resource management piece where we've done some work, but you should see some work from SAP over the coming months and quarters there as well. So have we done a lot? Yes. Are we done?
Probably not. All right.
I think we'll close it out with that. I'd like to thank everyone for joining us in person. Thanks to those of you who have joined us on the web. If we didn't get your question in the session, we will come back to you by whatever channel you have sent that to us. So thanks everyone and so long.