Sramana Mitra: In terms of areas of interest for these kinds of seed investments, what degree of relevance do you need with SAP’s current technology? Does it need to be built on HANA? Does it need to be built on something else within the SAP stack? What are the constraints?
Max Wessel: There are no constraints from an underlying technology perspective. Obviously, we would love for everybody in the world to build on HANA and on SAP cloud platform, but we also understand that there are plenty of viable open source components and cloud infrastructure providers that startups want to work with. Instead of requiring that technical definition for what the boundaries are, we look to enrich and empower startups that touch on SAP’s system.
If we have a cloud application that may benefit from something like fraud management or fraud detection, if you built a fraud detection application on somebody else’s technology stack, we would still consider working with you as long as you plug into Concur and provide that service to Concur customers.
At the end of the day, when our customers benefit, SAP benefits regardless of what the underlying technology decisions are. We want to make sure that we have an ecosystem of startup partners that continues to invest in building out around the periphery of SAP applications, regardless of technology.
Sramana Mitra: What kind of startups choose to pursue your seed funding versus any of the other 500 to 600 micro VCs out there. What can they expect in terms of customer access and assistance with go-to market?
Max Wessel: We do an excellent job of making sure there are sponsorships from SAP leaders when we make investments. SAP account teams and SAP customers will have exposure from the top-down to what the underlying startups are doing. In Berlin for example, we brought a number of folks to the SAP Foundry, which concluded at the end of last year. By the end of that process, we had generated 12 POCs.
Sramana Mitra: Excellent. SAP, of course, has traditionally been very strong in the large enterprise customer base. To what extent are mid-market offerings of interest to SAP?
Max Wessel: In general, we always think that cloud is a mid-market game in addition to the large enterprise stronghold that we have. Mid-market is extraordinarily important to us. It depends on where you draw the line for what is SMB versus mid-market. For 50 or 100 person firms, we continue to see Business One which is the product that we’ve been growing over an extended period of time continuing to drive traction in what SAP would define as small businesses. But it’s not a small business in the scope of a Square or Revel Systems. That continues to be a focus area for us as well.
Sramana Mitra: A seed investment that has a solution facing the mid-size of the SMBs would still be of significant interest?
Max Wessel: Yes. Underlying that belief is that companies that serve mid-market or have the potential to grow from small business to mid-market to enterprise are interesting. Folks are over served and I moved up market.
Sramana Mitra: Last question, what in your mind is SAP’s biggest success out of this intrapreneurship or corporate incubation methodology?
Max Wessel: It’s a tough question to answer given that we’ve been operating for just a handful of years. Right now, we have a wonderful application that is making great headway in the geospatial analytics space and another great application that’s doing project collaboration around SAP apps. I’m very bullish on both of these. I think the stories are still unwritten but we continue to add more and more users to both of these application environments.
Sramana Mitra: Fabulous conversation. Thank you for your time.