SAP marked its annual shindig in Orlando this week by pulling the sheets off of AI features for its popular enterprise application platform, but failed to impress analysts attending.

The 52-year-old software company launched its GenAI copilot Joule last autumn and made it available for the SAP SuccessFactors HR application. The tool promises to sort and contextualize data from multiple systems. At SAP Sapphire 2024, the vendor announced Joule's inclusion in ERP system SAP S/4HANA Cloud solutions, extension development environment SAP Business Technology Platform, low-code tool SAP Build, and SAP Integration Suite. SAP Ariba and SAP Analytics Cloud will get the tool next year.

SAP also announced plans to integrate Joule with Microsoft's AI chatbot Copilot to "surface even richer insights." It promises bi-directional integration to give users a single look and feel built into their workflow when performing tasks across SAP applications and Microsoft 365.

A joule is a unit of energy. One joule would power a one-watt bulb for one second. While it might be unfair to compare this to the enthusiasm for SAP's announcements, analysts were unimpressed.

Forrester veep and principal analyst Liz Herbert said SAP failed to provide the depth of end user examples, proof points, and ROI that conference attendees might expect.

"The number one request I get from clients is, 'Give me more examples of someone really using this and how they achieve results.' That's an area SAP still needs to go a lot further on. Some of their competitors have gone further, even a year ago. For example, Oracle showcased customers who were using generative AI," she said.

Herbert said companies were living with uncertainty and being asked to do more with less. AI might be a worthwhile investment for them, but they were assessing the returns.

"It's more of a question of the timeline and the speed of which people can consume it… also the value. There are open questions also, like what's it really going to cost me versus the benefit? When people get a better sense of that, we'll be able to see more where they end up," she said.

She mentioned that AI was the "number one question" among Forrester clients and highlighted that SAP was pursuing a "very good strategy," not only focusing on its own embedded AI but also collaborating with ecosystem partners and dealing with tech giants like Nvidia, Google, AWS, and Microsoft.

"What's positive about these announcements is both that they show an open approach to offering the best AI, even if it's not always directly created by SAP, and then meeting users where they are," she said.

In his technology keynote, SAP CTO Juergen Mueller said that Joule's integration into the SAP Analytics Cloud would allow users to explore the financial statement model, enabling them to ask follow-up questions and create financial reports using natural language.

Denis Torii, Gartner vice president and ERP analyst, said SAP was trying to catch up after last year, when the AI messaging had not been as strong and competitors made more noise.

"Joule is still in the early stages of maturity. I don't think there were very big announcements but more of the evolutionary story saying, 'AI is all around, it's going to be part of SAP users' lives,'" he said.

He told The Reg that large user organizations would be interested in adopting AI in their business applications as SAP suggests, but there are a few "roadblocks" to overcome before executing such a strategy.

With SAP's AI pricing based on consumption, the cost to users would be unclear going into these projects, he said.

Meanwhile, the adoption of AI would be accompanied by a rollout of SAP's cloud-based application development and integration environment called the Business Technology Platform (BTP), which also has consumption-based pricing.

"AI usage is based on the consumption, alongside that, there is also a platform, BTP, and that is also not that cheap. How predictable is this cost? That's a big question mark. I'm not sure people are up to speed on defining it and having clarity on what are the use cases that will [justify it]," he said.

The backdrop to SAP's messaging on AI is its mission to get customers off its older generation ECC ERP platform, still relied on by a significant number of SAP users. As well as the modernization of moving to its latest S/4HANA platform, SAP is trying to drive customers to deploy it to the cloud by promising significant innovation - including AI - only in the cloud, a move that angered users who had migrated to on-prem S/4HANA believing that would be the platform for the future, regardless of the deployment model.

Yet the carrot-and-stick approach has not increased the rate of ECC customers upgrading, Torii said. Last autumn, Gartner found that only 33 percent of SAP users relying on ECC had bought or subscribed to licenses to start their transition to S/4HANA. SAP has said it will withdraw support for the latest version of ECC at the end of 2027, the end of 2025 for editions EHP5 or earlier.

"That number of adoption is not growing faster than in previous years. What this means is there will be people left behind if 2027 sticks," he said.

It seems as though SAP will have to find more energy than Joule if it wants to avoid a large chunk of its ERP users becoming unsupported in two and a half years' time. ®

https://www.theregister.com//2024/06/07/sap_sapphire_2024/