As SAP seeks to secure its long-term suc­cess by dri­ving net new name acqui­si­tion, the company’s exec­u­tive lead­ers con­tin­ue to empha­size the impor­tance of increas­ing SAP S/4HANA Pub­lic Cloud adop­tion, and of con­nect­ing mid­mar­ket cus­tomers to SAP Cloud ERP solutions.

Indeed, just last week, SAP announced that the price for annu­al main­te­nance for on-premis­es license hold­ers will increase in 2024 in accor­dance with local coun­try CPI adjust­ments and its stan­dard con­tract pro­vi­sions, at a rate of 3% for U.S. cus­tomers and 2.8% for Cana­di­an cus­tomers. For exam­ple, if a cus­tomer’s main­te­nance amount in the Unit­ed States is $1,000, the increase would be $30 to $1,030 (or $30 for every $1,000 in on-premis­es main­te­nance). SAP will be send­ing a for­mal com­mu­ni­ca­tion to each cus­tomer impact­ed in the next few months. 

Ear­li­er this year, in March, to height­en its focus on cloud migra­tion, SAP lead­er­ship announced a new SAP S/4HANA Pub­lic Cloud & Mid­mar­ket (S/4HPC MM) orga­ni­za­tion, to be led by pres­i­dent and chief rev­enue offi­cer Bernd Bran­dl. In his new role, Bran­dl is respon­si­ble for dri­ving SAP S/4HANA Pub­lic Cloud rev­enue and prof­itabil­i­ty, with an empha­sis on dri­ving new cus­tomer acqui­si­tion and reviv­ing dor­mant accounts across the mid­mar­ket segment.

Bran­dl joined SAP in 1997 as a sales rep­re­sen­ta­tive, becom­ing a mem­ber of the SAP Ger­many Man­age­ment Board in 2003. After hold­ing sev­er­al exec­u­tive posi­tions in Indus­try Sales, and found­ing the first Data­base & Tech­nol­o­gy, Busi­ness Ana­lyt­ics, and Mobile Solu­tions divi­sion with­in Ger­many, he was appoint­ed Man­ag­ing Direc­tor for SAP Switzer­land in 2014. From there, he tran­si­tioned to lead Dig­i­tal Core Sales for the Mid­dle- and East­ern Europe (MEE). In 2020, Bran­dl became the leader for Dig­i­tal Sup­ply Chain sales glob­al­ly before assum­ing the lead­er­ship for S/4HPC MM ear­li­er this year.

In announc­ing his appoint­ment, SAP’s Scott Rus­sell — Head of Cus­tomer Suc­cess, and a mem­ber of the SAP SE Exec­u­tive Board — said that Bran­dl ​“innate­ly under­stands the pow­er of Cloud ERP and the poten­tial it offers cus­tomers to trans­form their busi­ness, grow and dif­fer­en­ti­ate from com­peti­tors.” Speak­ing with ASUG in a late June inter­view, Bran­dl reflect­ed that, ​“You could say I was with Cloud ERP from its first hour at SAP.”

Below, in the sec­ond part of our two-part inter­view (read part one here), ASUG asks Bran­dl about his per­spec­tive on meet­ing the needs of mid­mar­ket cus­tomers, embed­ding AI in SAP S/4HANA Pub­lic Cloud, and more.

This inter­view has been edit­ed and condensed.

Q. Reduc­ing tech­ni­cal debt and giv­ing cus­tomers the abil­i­ty to con­sume new inno­va­tions more rapid­ly, cloud migra­tion also rep­re­sents a mind­set shift for many cus­tomers. How have you seen mid­mar­ket cus­tomers’ atti­tudes toward dig­i­tal trans­for­ma­tion evolve in recent years?

A. What do cus­tomers need? Cus­tomers need a solu­tion that takes care of their dai­ly busi­ness, be that finance or man­u­fac­tur­ing. At the same time, they want tech­nol­o­gy that is state-of-the-art, from arti­fi­cial intel­li­gence to machine learn­ing. They want to use those tech­nolo­gies and use them very effec­tive­ly. We shouldn’t ever under­es­ti­mate the abil­i­ty of the mid­mar­ket com­pa­nies to be inno­v­a­tive and agile. They’re very good at what they do. But the world is chang­ing quick­ly, and so they need inno­va­tion with­in their sys­tems with­out always hav­ing to write their own programs.

They want SAP S/4HANA Pub­lic Cloud to ship to them very quick­ly what they need, and they want to have an open sys­tem, with APIs in niche areas where SAP is not active to enhance those sys­tems, which we pro­vide. They want, in oth­er areas of the com­pa­ny that are impor­tant but not nec­es­sar­i­ly part of an S/4 ERP sys­tem — such as SAP Batch Release Hub for Life Sci­ences, at phar­ma­cy com­pa­nies — addi­tion­al solu­tions from us that seam­less­ly integrate.

The West­ern Sug­ar Coop­er­a­tive, which start­ed on SAP R/2 over 30 years ago, went com­plete­ly green­field with SAP S/4HANA Pub­lic Cloud, which has been very suc­cess­ful. We always have dis­cus­sion of lift-and-shift, green­field, and brown­field imple­men­ta­tions. Mid­mar­ket often goes green­field, which makes sense; in large enter­prise envi­ron­ments, it’s not so easy to do, and so I under­stand when some of them go brownfield. 

MOD Piz­za, Grupo Segu­ra, and oth­er net-new cus­tomers we’ve gained in recent quar­ters have all gone green­field. With SAP S/4HANA Pub­lic Cloud it makes no sense not going green­field, in my view. If you have a cus­tomized sys­tem and add-ons, it’s the best way to go, because we often see sys­tems that have become over­ly cus­tomized; get­ting rid of what you no longer need is nev­er a bad idea when switch­ing to a new ERP system.

Q. Some larg­er cus­tomers start with a ​“tech­ni­cal” trans­for­ma­tion and ​“lift and shift” their SAP ERP Cen­tral Com­po­nent sys­tems to the cloud. More mid­mar­ket cus­tomers take a green­field approach. What do those cus­tomers need to under­stand about that green­field approach to succeed?

A. It’s hon­est­ly not that com­pli­cat­ed for those cus­tomers to under­stand. They are very agile, and their team mem­bers are used to mov­ing quick­ly. When we talk with our cus­tomers about green­field approach­es, they adapt to it and are not afraid of it. In addi­tion, they like the pub­lic cloud approach. It’s not an upgrade. It’s a migra­tion. And so, they cer­tain­ly take the knowl­edge that we have, but with S/4HANA Pub­lic Cloud, we’re not tak­ing months to imple­ment it. It can be com­plet­ed quick­ly and in a cost-effec­tive way. Why shouldn’t you set up your sys­tem in this new envi­ron­ment if you can do it with­out invest­ing a tremen­dous amount of mon­ey and time?

Q. What are you hear­ing from mid­mar­ket cus­tomers more broad­ly in recent months? Beyond agili­ty and scal­a­bil­i­ty, what does this sec­tor require to suc­ceed in today’s chal­leng­ing busi­ness environment?

A. What these cus­tomers need, above all else, is risk and cost reduc­tion. They need expan­sion plans; they want to grow. They need oper­a­tional effi­cien­cy and excel­lence, vis­i­bil­i­ty, and trans­paren­cy, and this is why they need a stan­dard­ized, easy-to-use soft­ware solu­tion that is also agile and gives them inno­va­tion on a dai­ly, month­ly, and half-year­ly basis. The sys­tem is sup­port­ing their busi­ness, and not the oth­er way around. 

Q. SAP S/4HANA Cloud is incor­po­rat­ing emerg­ing tech­nolo­gies, such as gen­er­a­tive arti­fi­cial intel­li­gence (AI) and machine learn­ing (ML), through fea­tures such as SAP AI Busi­ness Ser­vices and a col­lab­o­ra­tion with Microsoft. What does this new direc­tion mean for SAP S/4HANA cloud cus­tomers, present and prospec­tive, and are there any par­tic­u­lar impli­ca­tions for midmarket?

A. The impli­ca­tions are more or less the same for mid­mar­ket cus­tomers as for large enter­prise cus­tomers. Our approach is that we are deliv­er­ing the mar­ket-lead­ing ERP sys­tem to our cus­tomers, with indus­try-spe­cif­ic func­tion­al­i­ty. And, more­over, we base all this on state-of-the-art tech­nol­o­gy, like AI and machine learn­ing, that we use to enhance our busi­ness processes. 

From a pure tech­nol­o­gy per­spec­tive, we want cus­tomers to be able to do what­ev­er they want with this sys­tem. And all of this is based on a mar­ket-lead­ing busi­ness tech­nol­o­gy plat­form. SAP has always had busi­ness process­es with­in ERP based on very good tech­nol­o­gy. This was the BASIS sys­tem, it was NetWeaver, and now it’s SAP Busi­ness Tech­nol­o­gy Plat­form and HANA. With­out good tech­nol­o­gy that you use to run your process­es, you won’t be hap­py. And mid­mar­ket cus­tomers will use this new tech­nol­o­gy very quick­ly. Machine learn­ing has been in use for mid­mar­ket cus­tomers for decades, I would say. They are very fast.

AI could help us to make bet­ter deci­sions, exe­cute them faster and opti­mize process­es. But it’s still an open ques­tion, to me, what our soci­ety will allow AI to do for us, over­all. I’m inter­est­ed in AI, because I used AI 30 years ago in my PhD work. And yet a lot of what we call AI today is what I would call machine learn­ing. The ques­tion is: at the end of the day, will this soci­ety allow AI to inde­pen­dent­ly dri­ve impor­tant deci­sions that sig­nif­i­cant­ly influ­ence the lives of peo­ple and society? 

As far as Dig­i­tal Sup­ply Chain goes, AI will help us to make good deci­sions faster and dri­ve our busi­ness­es to more effec­tive­ly elim­i­nate a lot of risks that we see today, in prin­ci­ple. We can use it to check deci­sions. There’s a vari­ety of areas, and it’s both unbe­liev­ably fast and absolute­ly fail­ure resistant.

Q. Look­ing ahead, what is your one-year plan for S/4HPC MM? What do you hope the orga­ni­za­tion will have accom­plished in that time?

A. It’s very easy. As of today, my major focus is ensur­ing that we are cus­tomer-first. I am look­ing into each and every cus­tomer imple­ment­ing, run­ning, or plan­ning to pur­chase our sys­tem, to ensure that they get what they expect, that they will be suc­cess­ful, and that they will become great ref­er­ences for SAP. If I man­age to do so, then I will ful­fill the expec­ta­tions of my man­age­ment and com­plete the ini­tial plan I have made. 

Based off that, I will build a resilient plan as to how we should devel­op the busi­ness in the future. The oppor­tu­ni­ties, espe­cial­ly in the mid­mar­ket, and also with S/4HANA Pub­lic Cloud, in the mid­mar­ket but also for large enter­prise cus­tomers, are real­ly huge. In five years, we are after being the dom­i­nant ERP play­er with S/4HANA Pub­lic Cloud in the mid­mar­ket sec­tor. That’s what I’m after. And I think that, with our knowl­edge that we have regard­ing indus­try, ERP, and tech­nol­o­gy, we will make it a reality.

I’m not start­ing at zero. We already have a sig­nif­i­cant num­ber of cus­tomers. We have teams set up local­ly. How can you opti­mize? How can you repair and pre­pare the orga­ni­za­tion for a larg­er num­ber of cus­tomer-inten­sive busi­ness­es? I’m talk­ing a lot to the part­ners about what they think about it, what they need from us to be suc­cess­ful, how we can enable them, and so on. What enhance­ments must be completed? 

I have the sup­port of the SAP board and all SAP col­leagues to get this done; togeth­er with our cus­tomers and part­ners, we see a very bright future for this prod­uct. I repeat­ed myself often through­out this inter­view, but I think that the S/4HANA Pub­lic Cloud fits well the needs of our cus­tomers, which is what makes me opti­mistic. The pub­lic cloud approach will shape the future. And SAP has the knowl­edge and the right peo­ple in place to make it successful.