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SAP Business Trends: SAP ServiceEconomy: What is it?

Posted by Nicolas Schobinger Oct 12, 2014

Selling software is big business, you know this. As a result of selling software some adjacent businesses are

being generated - and they are getting big too. Think of third-party software, hardware, or all forms of services.

This is commonly referred to as Ecosystem. Today I'd like to examine one category of the SAP Ecosystem -

Services.

Demand for SAP-related Services is so important in terms of size that I refer to it as the SAP Service

Economy. For 2013, we estimated its value to be in excess of $57B worldwide. It's main segments are

Consulting and System Integration, Application Management, and Hosting. Allow me to elaborate on the first

of these three.

In 2013, Consulting and System Integration accounted for 60% of the overall SAP Service Economy totaling

around $34B in revenues worldwide. It has steadily grown 6% since the financial crisis. We estimate -

conservatively - that this translates into direct jobs for 365 thousand professionals at providers of Consulting

and System Integration services. And this does not include the jobs inside customers to run SAP systems -

which possibly doubles the total number of direct jobs. This is a serious economy.

SAP Business Trends: SAP Service Economy: What is it?

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Over the years, SAP has experienced a wonderful growth story with its software. And so did the SAP Service

Economy. It's good business.

But where is it headed to? Assuredly it's going to change. With tech disruption like Cloud, Internet of Things,

and Big Data progressing on the software side, we are starting to also see changes in the Service Economy.

If you do business in the SAP Service Economy, you ought to get ready for this. I will offer my views on how

the SAP Services Economy will likely evolve in one of my upcoming posts.

Note: The SAP Service Economy is an open one; everybody who wants to do business is free to do so.

Maintenance, as it is captive to SAP, is not accounted for in this definition. All numbers are estimates - they are

not official SAP data.

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