tag this

a big believer in Small

how many dedicated, not-for-profit agencies are failing to develop functional schemes to help entrepreneurs turn their ideas into revenue-generating businesses? maybe thats their problem theyre not in it to make money. however, some corporations are investing billions to provide sustainable solutions for these businesses. the co-ceo of sap, bill mcdermott, explains how these small businesses are playing a big part in its core strategy.

By r o r y C o e n

getting
a business started is both a stressful and a financially challenging exercise. Even if one does get venture capital to ease the burden of finance, the chances of it being a success are less than 30%. In such a scenario, the most prudent thing to do is to be conservative test the waters and get a sense of the market before blowing every dirham of your savings on a business that was doomed before it was even conceived. There are of course many reasons why a business falls flat in its early stages: the timing was wrong, finances dried up, lack of experience, the wrong market. Statistics show that entrepreneurs often choose the markets in which businesses are most likely to go under; they fail to take the actions that research shows help businesses to survive. Academic research shows that putting in place careful financial controls, emphasising marketing plans and writing a business plan increase the odds that a new business will survive, yet many founders fail on all three counts. The Power of Small Bill McDermott, the Co-CEO of German enterprise software provider SAP, spoke to Qatar Today about start-ups and small- to medium-sized enterprises, and whether his organisation was only after the big fish or also had a special focus on the tadpoles. He believes he knows how small businesses can have a better chance of survival. We are a big believer in the power and value of small, said McDermott. Sixty-five percent of our customers are small. These businesses are the economic engine of the world its where intellectual property exists and its where jobs will be created. But one of the learnings we heard at the [World Economic Forum Annual Meeting] in Davos earlier this year was that the number one root cause of small businesses not scaling and ultimately not succeeding is that they enter into the market without systems that can support their business model. We have come up with a break-through solution for SMEs called Business One, which runs on our proprietary platform

HANA. It can also be provisioned to a cloud environment, so it can be up and running in a matter of hours. Its extremely easy to install and its very low-cost. Many of our customers might have only a half-dozen employees and they are running this piece of software, he added. If SAP is innovating for small businesses with applications like Business One, then it is certainly collaborating with others to do the same. The winners of The Power of Small: Entrepreneurs Strengthening Local Economies, a global competition jointly sponsored by SAP and NGO Ashoka, were announced last month. The competition attracted 370 entries from 69 countries. The four winning entries, selected by the Changemakers online community, represent the most innovative strategies to help emerging entrepreneurs and small businesses grow and thrive in underserved communities. The winners received a comprehensive capital, technology and promotion package from SAP including a cash prize of $10,000 (QR36,400) and a technology donation to optimise performance and scale up operations. One of the winners, MySoft, said that small businesses need IT just as much as the big ones. For the price of a meal at McDon-

68 Qatar today

DECEmbEr 2012

tag this
alds, micro-entrepreneurs in Brazil (such as street-market salesmen, curtain fitters, car washers, confectioners and day labourers) can subscribe to MySoft and get apps to run their businesses better. In just three years, this development collaborative has trained approximately 10,000 young people to create cloud-based smartphone and laptop apps. Theres market potential to reach 27 million small service providers. Under the hood Sapphire Now the twice-annual gathering of SAP developers, users and partners was held in Madrid last month, and McDermott reiterated SAPs loyalty to its five-category strategy which has been so influential in the huge turnover figures it has been churning out in the last couple of years in particular. HANA, the powerful in-memory database that can run real-time analytics, is the ringleader, while applications, business analytics, cloud and mobility make up the quintet. We just did an amazing quarter, said McDermott. We accumulated nearly four billion dollars in software revenue, and thats double-digit growth. Software and softwarerelated services which is the most important benchmark for the capital markets was up 19% to $3.21 billion (QR11.7 billion). Our software itself, which is often regarded as the greatest predictor of future demand, came in at over 1 billion (QR4.6 billion) for the first time ever, which is an increase of 17%. McDermott intimated that we can now look forward to the next-generation total customer experience, which will be even more mobile, social and cloud-based. But he stressed that the most dynamic change will be in the real-time application of data. There seems to be this insane bias for having real-time enterprise software now, and the latency in legacy systems and diskorientated databases will not satisfy the modern customer any more, he said. They want to have instant customer satisfaction on the mobile device with no waiting. So whether its Samsung, Lenovo, Google on the Android device, Apple with the iPhone and iPad, youre going to see them standardising on SAPs unwired platform so they can run business applications in a secure way. The CEO of a well-known fashion company in Milan was quite stunned by the fact that he could not only have a completely digital relationship with his consumers, but because they interact with the Internet he could understand their preferences; he could make predictive decisions on what they are likely to want next, based on their purchasing history; he could revert them to the right store to suit their travel needs. Were in a

bill MCderMott, co-ceo of sap

whole new world here where were digitising the total customer experience, bringing it to a new level, said McDermott. Regional importance With its obvious global growth, how important is the MENA region for SAP? What is it doing to develop its strategy in this region? We made a strong statement that we were investing $500 million (QR1.8 billion) in MENA by 2015, and we are keeping that promise, said McDermott. Our growth is

doubling there year on year, so its really one of the jewels in our crown. I have been to the region many times and I see a tremendous opportunity for young people to work in our ecosystem, whether thats to work for SAP, our partners or our customers. Were working with the governments in Saudi Arabia, Qatar and the UAE to really create opportunities for the young folks to get the skills and tools they need to compete in the modern economy, he said

DECEmbEr 2012

Qatar today 69