Max Wessel: From an intrapreneurship perspective, we have a program that we’ve been running for close to four years now. We have all sorts of ideation programs around the company for decades but four and a half years ago, we launched a program that’s aptly called Intrapreneurship.
At one point, we kicked off the campaign. That campaign started locally. We have a network of venture labs that operate in actual physical locations. SAP has development centers around the globe. Those labs will come to the employee base and will give them a series of challenges. They’ll say, “Here are the topics that are most interesting to us.” These could be cutting energy utilization within data centers or figuring our how to secure SAP systems.
It will be a blank slate challenge. It’s effectively saying, “Here’s the problem and what we’d like to achieve. Come up with a clever way to fix it.” We create an environment where people can experiment. Slowly and incrementally as they develop more and more, we make more and more capital and resources available.
After six months of working, if a team has gone far enough along, we’ll come at them and say, “For the next two months, step out of your role full-time. We’ll make capital available for infrastructure and marketing. Get this off the ground. Reach out to customers. Take your MVP and turn them into functional prototypes.”
At the end of that, we have an investment committee that will commit capital between $500,000 and $2.5 million depending on how mature the team has gotten over that six to nine month period. That whole process really draws people in. Many corporate environments have this amorphous promise that if you submit an idea to a black box in your corporate portal, someone will review it somewhere, but nothing ever happens.
The fact that we’re continuing to announce multi-million dollar investments into teams has generated huge amounts of interest from folks who would otherwise be thinking about how to leave the organization and get an idea funded externally or build a business that may not require venture capital. We bring them in, provide them resources, and we get them moving through the process with us.
Sramana Mitra: I will ask you a few questions. You said that you collect a set of topics from your different venture labs. What is the process of these topics being selected? Is there some sort of analysis of, “If we solve this particular problem, here’s the TAM. We can build this bigger business for SAP internally by solving this problem in some nifty way.” That is done by your venture labs?
Max Wessel: We generally identify the topics. The venture labs are effectively investment partners and scouting networks around the world. The ideas we pursue tend to be generated by leaders in the organization all over. We work with our Chief Security Officer on anything related to security topics. We work with the Head of Analytics when we’re exploring a new analytics opportunity.
They tend to be the subject matter expert to know the technical changes that are occurring in their spaces. We’ll take the general idea and take them forward through the venture lab network and educate the teams on the ground such that they have enough exposure to really start thinking about it on a day-to-day basis. We don’t do top-down analysis. The reality is we could look at multi-billion dollar TAMs but what’s really addressable to a team depends on the way in which they’re solving a problem.
You can’t look at the security market and then just say, “Here’s a $17 billion software market. Anything that’s created in it is wonderful.” If a team just looks at a small problem for application security for one of our businesses, the addressable market is just much too small. Instead, what we do is come forward with these areas that may be of interest to SAP based on a bunch of guidance from senior leaders. We allow teams to develop those perspectives. We only analyze how big that would be after the teams come forward to us.