SAP Business AI, helping you achieve real-world results

Daniel Newman:
Juergen Mueller, CTO and member of the executive board at SAP, welcome to this year’s Six Five Summit.

Juergen Mueller:
Daniel. Hi, everyone. It’s a pleasure.

Daniel Newman:
It’s great to have you here. This has been a really significant year across just about every part of every business. 2022, we had ChatGPT come into our conscious and change how we thought about doing business. ’22 was a bit of a, “Oh, my gosh,” then ’23 was a, “Build, build, build.”
’24, though, Juergen, has been implementation. Companies are spending, thinking, doing, dreaming of what’s possible with AI. But it’s not just AI, it’s looking at their whole stack, their whole business, everything they do, and how they can do it better.

First and foremost, Juergen, as the CTO of SAP, thanks for joining us. Tell us a little bit about what’s going on, what you’re thinking about these days as you’re leading and working so closely with your customers around the world.

Juergen Mueller:
Daniel, it’s an amazing time. It was never more exciting being a CTO or in our industry in general, because, as you mentioned, you have to rethink everything, basically. Good thing is that, at SAP, we are in a very, very good starting point for our customers.

Actually, let me share with you that a couple of weeks ago we bid farewell to one of our co-founders, Hasso Plattner. When you recap the 52 years of SAP … That’s how young SAP is as a startup. If you recap that, SAP has always been super close to the end users, and that is what we continue to do. We continue learning from end users, of course informed by technology of how the world runs. This is how SAP has built the broadest portfolio of enterprise applications.

Now, of course, as you mentioned, we are rethinking that. For us, we deliver last year already a dozen or so GenAI cases, building on top of the eight years of experience we have with narrow AI in production as well.

Daniel Newman:
I love that you pointed out … Five decades that SAP has been a leader in enterprise software. Of course, congratulations on the transition. Mr. Plattner was a tremendous contributor to the SAP community.

I remember … I think I’ve been doing Sapphires for almost a decade, and I remember every year listening to one or more of his various keynotes. Always a thinker, a bit of a dreamer and innovator, thinking about how to take this product forward.

You started to allude to it a bit here in that first answer, Juergen, but talk to me about staying relevant. Five decades. You’ve got changes in your leadership team. You have changes in what customers need. You’ve gone from prem to Cloud. What’s the secret to SAP, and how has it been so successful at staying relevant through these 50 years?

Juergen Mueller:
Over time, SAP learn how the world runs. What I always find super exciting is the different application areas, of course with S/4HANA at the core, when it comes to finance, to manufacturing, to quality, then everything around HR and procurement. Also, the supply chain side of the house and customer experience. This is so broad. Then you have the Business Technology Platform with all the supporting technologies for SAP and non-SAP.

Then what I also like a lot and why we are so relevant … SAP kept reinventing in the different industries as well, because of course a retailer is very different than higher education or professional services company. SAP learned how all those companies run, and is part of so many mission-critical business processes in those companies.

Now with, of course … What do these business processes create, these end-to-end business processes? They create data. Data, now talking about GenAI, is the fuel, is the treasure trove. We have tens of thousands of customers who trust us enough to give us access to their data, to train machine learning models to make our software even better. That is a positive flywheel effect that we see here, because that we give to users, they give feedback. This is how, actually, in that world of GenAI, we are infusing generative AI capabilities into all of our enterprise applications.

At the end, it’s always, again, about getting back to those end users. We stand up every day because we want to improve the end user’s life at our customers.

Daniel Newman:
I started working with SAP, advising the company, over a decade ago. I’ve always admired the depth of industries that the company is focused on. A lot of companies have gone vertical over the past several years, many of which have picked a few what I’d call vertical pains, maybe financial services, maybe healthcare. SAP … It’s changed little bits, but usually more than 20, sometimes as many as 25 industries that it’s focused on. That’s because of the specialization.

I think with AI what you were alluding to is that specialization will become even more important, because that data … Being able to apply it to models, smaller models that are industry specific. We’re going to come back to talking about that in a minute, but I also want to talk about your platform strategy.

You mentioned the word platform. You said BTP, the Business Technology Platform. The world is looking at this moment. I alluded early on, Juergen, to the great reset that is going on. AI is making every company on the planet rethink who they’re going to partner with, who’s going to integrate for them. Which ISVs will they work with? Where will the data sit? Will they do it in the cloud, SaaS, and hybrid iteration of it?

SAP has hundreds of thousands of customers, five decades plus of experience. But, at the same time, vendors are selling, “You can do this easier, different, simpler. It’s the time to change.” You’re fighting to keep your customers and, of course, grow them. How’s that strategy going? How are you keeping customers with SAP during this really important inflection?

Juergen Mueller:
Some of our customer CIOs … They say, “There’s a swarm of mosquitoes attacking you,” everyone now claiming to do everything with GenAI. “Everything easy. Everything done.” But you don’t want to have a dozen or a hundred POCs with different vendors, and then trying to stitch everything together again. We know that this will cause such high integration costs and data consistency issues, et cetera.

Then you rather want to pick a few partners, SAP being one of them, such that you can rely that latest GenAI capabilities are being infused into the enterprise applications where GenAI is needed and relevant for the end users. If you are in finance and you work on your financial close, it doesn’t help that you have 10 different tools. You want to have this in the best tool that does their mission-critical job that has all the data. You actually also don’t necessarily want to replicate data out of that system. It’s cost. It’s efficiency. It’s also potential compliance challenges with data leaving those systems.

Therefore, our strategy here is very simple. We continue offering our customers the best end-to-end business processes. We infuse GenAI. We have a digital co-pilot experience called Joule. We already embedded Joule into many of our solutions and announced even more where this will happen, such that you get the GenAI support where you need that right in point of time.

You can imagine that, when you have your application open, let’s talk HR, you have your HR application success vectors open, GenAI already understands the context you’re in. It understands what you want to do. Therefore, there cannot be a more efficient way of doing GenAI in that context.

Then, on top, Daniel, you know our ecosystem is very important to us. SAP wouldn’t be where we are without a great ecosystem. Everything we do ourselves in the area of GenAI we also offer after vetting to our customers and partners with the generative AI hub on SAP Business Technology Platform. Therefore, with this, customers then can do the same. They can use the data they have in SAP, they can ground models, they can do fine-tuning. We have vetted those models already for reliability, for enterprise application readiness.

That is what you want. You want a partner, very strong partner, instead of thousands or hundreds of mosquitoes attacking the CIOs, claiming to solve everything.

Daniel Newman:
I think, of course, there will always be innovators that will rise. You were at one time one of those. Then there’s always this great battle of innovation that goes on. Companies that have significant provenance and large customer bases are always fighting off what you’re calling those mosquitoes.

Sometimes there’s a very clever mosquito that finds a way to create and enter. By the way, some of those become your partners down the line and they end up becoming really important. Many of those will deter or take CIOs and companies off their mission, distract them, create complexities and problems.

One of the advantages I think that you have is … Companies have a big enough challenge with their data already as they’re trying to figure out how to move forward. Taking one of the big complexities off the table and enabling the existing database to proliferate into the platform for AI is so important. I think you have a very compelling case to make that you are one of, if not the most important for most of those companies.

I think you also mentioned a few really important things because you’re a cloud/hybrid solution. Is that there is data that needs to, of course, go to the public Cloud for maximum value for generative AI, but we’re also seeing this trend line around privacy, and this trend line around hybrid, and this trend line about keeping some data on-prem for economic value, for security value, for privacy, for compliance. All these things together give you a really compelling story to tell.

You’ve given me, and you’ve alluded to me where AI fits in the platform. It sounds to me like what you’re doing, Juergen, is you are making AI accessible. You’re asking your customers to modernize their SAP instances so that they can embrace all of the capabilities, but you’re also giving them a pathway to do that.

What do you see as the trends now? Once they get modernized, their data becomes accessible, they’re able to take advantage of Joule and all the integrations you’ve built with the public Cloud. What are the tech and innovations that you’re looking as CTO of SAP, building forward, for your customers?

Juergen Mueller:
Daniel, you mentioned a couple of things, so let me comment on a few of those. SAP is an innovation powerhouse. As you mentioned, we want customers to be with us on their journey or to modernize their states to actually leveraging all that innovation capability that is in SAP.
When you talk about data, with SAP Datasphere we make it insanely easy to combine SAP and non-SAP data in a federated way. Again, you don’t want to replicate all this important data that has business semantics to it and then redo all the semantics somewhere else, but with Datasphere, you can do that in a federated manner.

Then, when you talk about the platform, once more on this topic, really it is about a combination of challenges that CIOs, CDOs, et cetera have. At least in an SAP context, but also beyond, we help with that.

You mentioned that SAP for so many companies is amongst the or the most important system to run their mission-critical processes. Therefore, when I ask them, “How many applications do you have?” Oftentimes it’s a lower four-digit number, like 2 to 3000 applications. SAP being so important, what do we need to do? You do need to integrate those with each other. Which better integration technology could you use than the one from SAP with the Integration Suite?

Then it’s about automation, SAP and non-SAP. Again, we have SAP builds. We help with that. You want to build extensions because you want to have a clean core, being super fast in upgrading. Customers now sometimes have a 10 times faster upgrade cycle. Not doing upgrades every 10 years, but doing those every year. It doesn’t take three, four, or five months, or even much longer to do that, but it takes a couple of weeks to do that. The extensions you want to build in a way to not modify the system, and that you do with SAP build as well.

Then it’s about data. You mentioned that. Maybe now the most important part. Some companies are further ahead because everyone knew that you need to invest in your data to have a clean data and a good data strategy. But now it’s a compelling point in time, because, without great data, there’s no great generative AI. Doing that with SAP, where that data actually originates from, and being able to combine this with non-SAP data helps tremendously in getting the job done.
Then, of course, you have analytics and planning on top, and we already talked about AI.

Therefore, this is super important. You have an amazing application company here with a fantastic platform, the Business Technology Platform, underneath. Then, of course, there’s so much more, Daniel. We could be talking about sustainability. So many challenges still ahead.
Then, when it is about business transformation management … Because everyone now understands the go-to, the to-be picture, but the reality of it is very complex. How do you use leading tools like SAP Signavio for assessing processes, SAP LeanIX for looking at your enterprise architecture, and more to driving adoption of new solutions? How do you do that?

Then, of course, it’s about continuous intelligence on the data side of the house, such that the system actually does more and more of the job for you. Then there’s quantum computing. We could spend the rest of the day here, but I know you have a fantastic program as well.

Daniel Newman:
I appreciate you teasing some of the things and some of the directions. I agree with you. We do need to think about, of course, all the exciting GenAI opportunities, but there’s a much broader analytical AI that still exists, by the way, and has existed for over four decades. That companies require the best data, the most accessible data on the planet to benefit from.

As you head into other areas you mentioned, like sustainability, the future of qubits and quantum and how they will be able to solve big problems in many industries, you’re absolutely right, Juergen. I do appreciate, by the way, that you’ve taken a little time out of your Europe SAP Sapphire to join us here for this year’s Six Five Summit, Juergen, and also you had your big Sapphire event last week. Tell me a little bit, tease everyone out there a little bit, what were the big things that you announced at this year’s Sapphire? What can you share with our audience before we let you get back to your European event?

Juergen Mueller:
The overall theme, Daniel, for Sapphire this year was Bring Out Your Best. We want to help everyone bringing out their best.

Now, talking about AI, that is, of course, the technology of our generation, maybe, at least of the decade. SAP is business AI, so we really look at the business side of the house. You have many ingredients, but we want to make it useful and relevant for the end users.

When it comes to Joule, our generative AI co-pilot, we announced Joule in September last year already with initial integrations into SAP SuccessFactors and SAP Start. Since then, SAP has integrated Joule into S/4HANA Private Edition, S/4HANA Public Edition, as well as in multiple applications across our supply chain portfolio, our BTP portfolio. In the second half, Joule has also planned to be integrated into Ariba, into SAP Analytics Cloud, many other supply chain solutions as well from SAP.

Then it’s about languages, accessibility. Joule will be able to converse in multiple languages, of course English, German, Spanish, French, Portuguese as well, and many more. Also, we announced new partnerships at Sapphire, which are amazing.

Now when we look at generative AI … Let me give you a few examples. For example, SAP Analytics Cloud. We announced our generative AI capability such that everyone from boardroom to shop floor actually can ask analytical questions. That creates the transparency everyone needs to then, also, of course, taking the right decisions.

In the integration space, Joule will help you to create integration flows, for example between SAP and a government system because they created new rules and regulations. Of course you want to integrate that super quickly with the SAP Integration Suite.

When you think about LeanIX or Signavio, we launched generative AI capabilities. For example, process recommendation in Signavio, or also we will have prompt-based process mining as well. Then we have a 2-million-plus ABAP development community, and we upgraded ABAP language to ABAP Cloud as well. Here we help with generative AI. We work together with NVIDIA on training our model, and now we support ABAP developers with generative AI as well to help them in their development process.

You do see a lot is happening. This is just a small bite of what we announced at Sapphire, and there’s something in it for everyone. What is important to take away when it comes to generative AI, but also all the other important topics, SAP is not just announcing, but we are delivering.

Daniel Newman:
Juergen, I want to thank you so much for joining me at this year’s Six Five Summit. We’ve had so many great conversations over the years. This was another wonderful one.

For everyone out there, I hope you have the chance to really take all of this in. Juergen Mueller, CTO and member of the executive board at SAP, thanks for joining us at this year’s Summit.

Juergen Mueller:
Thank you, Daniel. Have fun, everyone.

Daniel Newman:
Now back to you.