Oh, another day. Hello, Christian. I'm glad you had to do the catwalk and not me. So hello everyone. Christian, for the past few years, you've been leading SAP through a huge and ongoing transformation from on-premise software to the cloud and now there's a whole other one upon us with the AI revolution. What learnings are you applying from that first transformation to this one and which one do you think is going to be bigger for the company?
Yeah. I would say transformation is never easy but just look around and when I listen to Sarah what is happening in the tech market and the reality was with SAP six years ago, yeah we had a great ERP, we are running the world, I mean 80% of the world's most business transactions run by our systems but this business model came to an end because at the end when your customers are 10, 15 years behind the latest innovation and see what is happening in AI, that is not sustainable. So we restructured the whole stack. We came to a modular architecture. Now today we have a platform where you can do finance, HR, supply chain but you can go live in weeks and not in years. So for example SAP is known for very large enterprises but we actually have thousands of startups, Whimo, Data Pricks, Mistwell, they're all running SAP. They don't care about, you know, we help them to scale their business. Now change and transformation in SAP, I mean when you tell coders that their product needs to change which they coded for 10, 15 years it's never easy when you tell your people in the go to market now everything matters is telemetry, adoption, infusing the innovation, helping customers to change it's also not that easy. So it's a lot about not only creating new technology and building a new stack it's also a lot about changing how people work. You need to go on the ground. We are running in over 150 countries. So you have to explain the people why this change is needed and honestly you also have to infuse a lot of new talents because you cannot just change a company just from inside. You also have to make sure that actually you have people coming from outside and then last but not least now with AI, I mean the next transformation, the way how we code, the way how we sell, the way how we create content, even the way how our finance and HR people will work will change dramatically and of course I cannot go out to my customers say hey use SAP AI when we are not credible enough to use AI by our own. So of course we are now also transforming again with AI.
What are the biggest challenges to adopting AI amongst your customers?
The biggest challenges, I mean they all love to talk about oh SAP can run an autonomous payroll. We talk a lot about manufacturing in time, manufacturing sequence, manufacturing because with generative AI, with our business AI the combination does it, you can predict demand real time. You can actually change the way how you manufacture. You can reduce inventory. That all sounds great. When then the AI hits the reality, you see that in many companies there are a lot of data silos. It's not about only plugging an LLM into their systems and processes. It's about our AI foundation and then working with companies like Databricks, Snowflake and others to harmonize data. Because you have to have the semantics right and that is often times the first challenge where we are helping and by the way we have a lot of startups who are also doing this for us. So everyone here is invited also to join that. And then the second one is about change management. I mean when you are plugging in AI and you change the way how you do a quarter end or you do payroll people need to understand what workflow is now getting automated, what will change and you need to, what Sarah said is very important, you need to go into the business and explain the end users what is happening. I mean this is good change but you have to make sure they are on the journey together.
How would you mark SAP's homework? How good a job are you doing on that front at the moment?
I mean we are still learning. Everything else would not be true. We have a great AI foundation. We have our digital assistant like every other tech company. I would say our digital assistants understand business data the best. We are working with Perplexity to also have the unstructured content. So in the future someone can ask Joule, SAP, hey there are new tariffs coming from somewhere in the world. What does it do to my P&L? So these things are really good but now what we need to do is making sure the adoption is there and that is the second step. So we also learned our architects, our best consultants, they need to go to the customer and making this work because from the tech to bringing it to life and really bringing it to usage there is a way to go and this is of course still something what we are working on together with our customers.
Do you think the challenge is that customers don't really understand how AI could be helpful to them in these tools or is it sometimes that the tools just aren't good enough yet?
Yeah, look, Amy, where I'm getting very nervous, just this week, I was together with a very big customer actually in the United States, manufacturing. They said, 'Oh, Christian, I going to buy a lot of AI from SAP. I love that.' The problem was this was it. I said, 'Yeah, but where is your business?' I mean when you now want to plug in AI for better cash flow conversion, when you want to plug in AI on the supply chain side you need to work hand in hand with the business. So this is really really important and that is something where we also educate our customers say hey this is not about just buying a piece of technology this is about change and I guess many people here, many entrepreneurs here probably feel the same it's about, you know, the one thing is convincing the customer the other thing is making sure they also understand how to adopt the new technology, how to adopt AI.
How are you working with startups?
Startups, I mean first of all, as I said at the beginning, first of all we are helping them to scale. I mean think about SAP is only known for the big large corporations in the world that is not true. I mean in the cloud we celebrate go lives in two weeks. I mean we have a BYD who is now dominating, you know, in certain spaces they started very early with SAP and we allowed them to scale their business worldwide. We have Databricks early on. First of all we are helping them, you know, for them using our platform to scale, build their business. Second, in our portfolio, take Agentic AI. We are inviting all of them to join and build Agentic AI applications on top or next to SAP. I was with Coca-Cola last mile delivery with the bottlers. There is a good startup. I said, 'Hey, we don't need to code this by our own. There are better people who understand last mile delivery.' So, we are all checking always our portfolio and said, 'Hey, this is where we are very good at.' And then there are cool startups out there who have so much expertise already. Let's give them the access to our data. Let's understand them that what is the business context and then they can actually, we take them by the hand and bring them to our customers and we have over already 800 Agentic AI startups on our platform and you can tell they are all loving it because they are getting not only integration into SAP they're also getting help from SAP to learn our customers. We are opening doors we can say hey you are in supply chain, Agentic AI startup here we can give you access let's work together and convince the customer to actually adopt our AI. So that's the way how we work and then over time if they want to also have help on the people side, I mean we have experts as well where we then also from time to time do a certain exchange to help them to also ramp up their own startup.
And how do you keep on top of, I mean as a journalist covering Agentic AI I find it super hard to keep up with all of them. How do you kind of keep in review which ones are actually bringing benefit to your customer, which one people aren't finding very useful? How does that process work?
I mean as a CEO these days when I do my, we'd call it business reviews, my product owners come and so we always talk about build, partner, buy and on the partner side I definitely want to see, you know, what kind of companies do you see outside of the company who can help us or who can also maybe, you know, at a certain point can be a disruptor. So that is very important that we also think at SAP my product owners looking what is happening in the market. Then we as SAP we have a big venture fund, Sapphire Ventures, it's about six, seven billion big, they are screening the market for us worldwide and then we are working together with many private investors also telling us hey SAP there is something you should look at and that's how we are actually screening the market. We bring them on as I just explained and then over time who knows, sometimes even these companies are joining SAP and we are a very friendly company, I mean we let these businesses grow. I'm not a big believer that you just acquire someone just for a product you also acquire sometimes for great talents, for great people and that's how we do it.
How many startup acquisitions have you made in the past few years?
We I would say we have across all of our portfolio around 50. So we actually infusing a lot and then again via our venture fund we are having certain shares in hundreds, I would say probably thousands of startups. So where we are going in and already helping these young startups to grow their business.
Who, give me at least three names of companies you think you're watching as a potential disruptor who might be coming to eat your lunch.
Oh, I have to say, I mean I have, there's, I'm just, we were now talking to a startup in Berlin which we like when I just look at the way how they do automation, process automation. I mean this is what SAP does for many many years they are doing it with AI. Lovable is great for code generation. So I'm now sticking here a little bit to Europe and then over there I mean we are working with Cursor, we are working, Perplexity is not kind of a startup anymore, I mean yeah and these are the things we are looking at and of course it's amazing what these companies do.
And what would have to happen for you to think crap we need to buy them because otherwise bad things are going to happen for SAP.
Yeah, I mean the best story probably who explains it was Signavio. So we worked with them. It's actually a founder came from HPI and university where working a lot with it was a very good cultural fit and then the product itself was doing process analysis. Now we are infusing agentic AI for process automation and now a lot of customers came to us said hey SAP we don't like that our mission critical data goes somewhere else and it's getting replicated this has all kinds of security concerns so they said hey can you not just natively integrate it and maybe even embed it. And so that was of course for us very important that we are when it's so close to the core of what SAP does and even our customers are telling us it would be better to consume that out of the box that is a strong indicator then we are looking at culture, people, you can acquire the best product if it doesn't fit from a culture perspective always a problem and then the third one is of course the market opportunity which we are looking at.
