Sramana Mitra: What I was trying to get to was the whole enterprise social network. The impact of social sharing behavior inside the enterprise is a relatively new phenomenon. It’s probably five years old, right?
Sameer Patel: It’s actually 2006, so seven years.
Sramana Mitra: Maybe seven years for the early adopters but five years after coming into the mainstream. Now we are coming to a point where, continually, there are actual metrics available on what kind of real ROI impact we are seeing. I remember I started covering the cloud computing trend a long time ago and then we started seeing actual metrics around 2009 when the companies were able to hard-core quantify what was the impact of Cloud Computing on enterprises. I was getting numbers from Intel and CIL which were really hard-core numbers. The question I was asking is where are we in that evolution?
Sameer Patel: That’s a great question but I’ll be honest with you. I don’t believe that we should be looking for metrics around social network. Social network is a means to some productive end and you need to be looking at how social impacts these standard metrics that actually exist inside the organization versus some of the established metrics on social.
Cloud computing is different because you can look at the impact on baselines that have existed for 20-30 years. My contention is that a lot of the metrics around social are the ‘be more collaborative, be more productive’ type. They are on the other end of the spectrum.
Let’s now look at finance, which is a very structured, locked-down process in a typical financial organization. But even in that organization, there are some things that are cross-departmental, cross-collaborative like elaborate sales budgeting. Is 90% of their time in social and collaborative format? Absolutely not. It’s only 10%. That’s perfectly fine but you’re going after a business metric here, you’re not going after a social metric. In a quarter or two from now, we want the benchmark setup and these are the kinds of metrics we are going to go after. However, the problem we’re solving right now, is aligned with core HCMs, CRM, and supply chain type of problems versus be more productive, be more collaborative.
Sramana Mitra: The last body of questions is around trends and opportunities that you’re tracking. Lift yourself out of SAP and think about the industry, what are the major trends in Enterprise Social? What are other open opportunities?
Sameer Patel: There’re three things. The first is, I am very fascinated by some of the network-first business models that exist on the consumer web. There’s a whole occurrence of what I call, network-first businesses where if you were at the tip of a light space and actually design an entirely new application space, you would probably not start with transaction first, but you would start with network first.
I’ll give you two or three examples that inspire me in this area. The first is, coincidentally now, is SAP. The core value proposition there is not just the fact that transactions move through the network in billions of dollars but the size and virality of that network. Mostly, enterprise software has been built around automation and transaction. It has not been derived from networks. That is one amazing example of scores of other categories within software that will be disrupted by a network-first model.
Another great example is Amazon. A decade ago, if you remember, the shopping cart button was a huge button. They wanted all the visual cues to point to the shopping cart. If you look at it today, the shopping cart is a tiny button. Amazon’s true competitive advantage today is not the shopping cart but the network. I think we are at a point where there are entire swaths of enterprise categories that if we were to design all over again, would actually be network-first. I’m really excited about that as a next incarnation of social. That’s one.
The second is predictive analytics and what Yelp does inspires me the most Yelp does. I recently read that Yelp is going to give individual restaurants and businesses capacity projections, based on what’s happening on the network. That allows a little restaurant plan how much staff and its shifts and how much produce it needs to buy, how many shifts to cater to the capacity estimation. It is unbelievable what a network could actually tell that little restaurant. That just never existed.
I see huge opportunities as organizations start to use collaboration in the context of business and come up with outcome-based and purpose-built metrics and analytics Even CEOs have just never had to be able to do any kind of strategic forecasting whereas CEOs can be very good at saying, “I’m going to build this product and enter that market.” But the ability for them to be able to predict the resources and human capital variances in their business has not been easy and I do believe that the mixing of social collaboration in the context of core business processes is going to be one of the areas that’s going to give them a whole set of data that they don’t have. So, that ‘s another big trend.
The last trend which I’m really excited about is this notion that we’re entering thing new era of cloud computing, at least on the SAS application side, where a lot of organizations who moved to the cloud, either went in knowing that they’re going to give up some of the benefits that they had around being able to customize their apps. But we’re starting to see some cool innovation around cloud extensibility where platforms are emerging that allow you to extend SAS applications.
Michelle spoke about this at SAP tech head early this month. We talked about the HANA cloud extension platform. It allows you to build net new applications on the extension platform and they get connected to your plain vanilla cloud applications. If you have business processes that are very specific to either your business, your geography, or your industry, you have the ability to build out these applications that can fit alongside your SAS apps, be integrated, completely seamless to the end-user. So what you get out of that is what I’d like to call, cheating in the cloud. You get the benefits and the scale and the economics of cloud-based applications but you don’t have to give up all the custom flexibility you need to run your business.
That’s going to have a profound impact on the next generation of cloud applications, which I believe we are just about to get started with. Those are the three big trends that really excite me. They are all related to social and collaboration, but it’s really around network velocity and extensibility in the cloud. That’s what gets me riled up every morning.