SAP is now surrendering the mainstream customer relationship management software market to Salesforce after the stiff competition for years and would now focus only on some of the domain’s specific segments.
SAP Focusing on Specific Areas of CRM Market
A few years ago, the then CEO of the company aimed to make the SAP as the leader in the CRM market, and it also invested a massive 8 Billion dollars in getting Qualtrics to achieve the goal. However, now SAP has seemingly given up the market to the competitor Salesforce and pulled from the wide areas concentrating on some portions.
CFO Detailed the SAP vision
The CFO of SAP technologies, Luka Mucic, hinted about the same in a QA session in the Virtual Investors Conference this week.
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Now SAP wants to keep its monopoly and become a significant player in specific categories of CRM instead of being no 1 in the entire CRM market. It wants to ensure that the customer experience is at its center by making sure it is best in its categories. “So, first of all, customer experience is absolutely a key market in which we want to be a significant player but with a focus on those categories where we clearly see that there is potential for SAP to be a strong #1 or #2 player.” Said the CFO.
SAP moving to Subscription-Based Model
He further detailed that SAP foresees expanding its margins by around five percentage points as the company focuses on shifting its business to hosting the services at the various data centers on the subscription-based model. As per the CFO Mucic, this is a more substantiated and predictable model, unlike the traditional software licenses. He also added that the company management is closely working on floating Qualtrics, which is its customer experience tracking platform. SAP bought Qualtrics for two years ago.
