|Myles Bunbury, P.Eng., SAP Customer Experience Competency Center Head, EPAM|
The customer is king.
Those of us who have been in the SAP Commerce Cloud (Hybris) ecosystem since the time when Hybris was ‘hybris’ remember this tagline well. Put the customer at the center of everything. And consequently, another king was born – Hybris as the e-commerce leader per both Forrester & Gartner for years and years.
Per the latest Forrester Waves for both B2C and B2B, released on May 19th, 2020, SAP Commerce Cloud has lost its leader position and is now regarded as a “strong performer”.
As one EPAM VP put it, “Seismic change in the leaders group.”
Before proceeding, some caveats.
Unfortunately, due to reprint restrictions, I cannot post the Forrester Wave™ reports itself; however, you are welcome to purchase and download them yourself to add additional context to my commentary and to formulate your own opinions. They are available here:
- The Forrester Wave™: B2C Commerce Suites, Q2 2020
- The Forrester Wave™: B2B Commerce Suites, Q2 2020
In addition to the reprint restrictions, my commentary here is also governed by the Forrester citation policy, which limits what I can share and opine publicly, and which prevents me from directly referencing content in or quoting from the report:
Ergo, you will see links to other resources where I’ve been able to stitch together bits and pieces of the report where possible.
In the meantime, before proceeding, I recommend that you review the actual Forrester Wave graphics which have been posted elsewhere:
Feel free to contact me if you want additional thoughts.
A Shifting Market
Before we all head to the emergency exits in a panic, let’s understand how Forrester reached their results.
“As monolithic technology becomes outdated and less appealing to merchants, the providers that lead the pack will demonstrate deep integrations with both owned and competitive solutions, as well as business user tooling that unifies controls across those solutions and streamlines workflows. Vendors that deliver this value position themselves to successfully help their clients grow revenue, deepen customer loyalty, and expand into new markets.” 
Let’s chunk that out before looking at how SAP Commerce Cloud fared.
1. Monolithic Technology
“Monolith” continues to be the noose around SAP Commerce Cloud’s neck. While in some sense that’s fair – it’s still Hybris of old – usually when I hear of SAP Commerce Cloud spoken of as a ‘monolith’, the speaker is either ignorant of or undervaluing the legitimate and positive investments that SAP has made over the years to open up and break apart the so called ‘monolith’. Spartacus is probably the best example, where the B2C & B2B accelerators of old are trending toward decommissioning in favour of a new Angular-based headless storefront. SAP Context Driven Services also replaced the older embedded BTG personalization engine. SAP Product Content Hub is positioned to split off the traditional product cockpit as a SaaS-based offering. Other “satellite” software, such as Hybris Loyalty, have cropped up over the years. SAP Cloud Platform Integration, SAP Cloud Platform Integration Extension Factory (Kyma), and a multitude of new APIs for SAP Commerce Cloud open up dramatically the integration options available. I (and likely SAP) acknowledge it’s a work in progress. But it isn’t anything to sneer at either. Give credit where credit is due.
2. Deep Integrations with both Owned and Competitive Solutions
Open integrations were one of the keys to the success of the early days of ‘hybris’. Pre-SAP acquisition, integrating into competitive solutions – most notably Adobe CQ (now Adobe Experience Manager) – was the way to get into the door of prospective customers since they did not have a broader portfolio or customer base to fall back on. Since the SAP acquisition, I’ll argue it’s been 2 steps forward, 1 step back. Deep integrations with SAP owned solutions have proliferated and matured, as exemplified by the C/4HANA unified suite story that SAP put out a few years back. But in that same time, focus was reduced on the broader ecosystem and “best of breed” type integrations. Certainly, the aforementioned “marriage” of ‘hybris’ and Adobe of old is no more. Netted out, SAP should hold its own here.
3. Business user tooling that unifies controls across those solutions and streamlines workflows
Let’s be honest – business user tooling has never been the #1 selling feature of Hybris. While it’s leaps and bounds better today than years ago, the UI roots are still in a German-engineering-based exposure of the underlying data model. Unification across solutions is still a work in progress in my opinion, as the CX suite still very much feels like separate, independent point solutions in my eyes. SAP is likely on the weak-to-neutral area here.
Separate from the quote above, the following appears in another section of the report:
“Have built or moved to a cloud, SaaS, microservice-based offering.” 
The report also talks about the need to keep software current via continuous upgrades of the software, something that is viewed to be easier in a software-as-a-service (SaaS) model. That leads me to two additional evaluation criteria:
4. Cloud & Microservice-Based Offering
For all of SAP’s efforts to brand Hybris as SAP Commerce “Cloud”, the reality is that, at least today, the offering is still very much Hybris of old. It is now simply hosted in an SAP data center (CCv1) or an Azure data center fronted by an SAP Cloud Portal (CCv2). “SAP Commerce Hosted” is a less sexy, but probably more accurate, term.
Turning SAP Commerce Cloud into a truly cloud-native and SaaS solution will take time. And it’s not without risks. SaaS by nature naturally pushes towards conformity (or, at least, customization via configuration, not code). That’s sensible for “vanilla” e-commerce (eg. Navigation menus, categorization, user records, order history) but not so much for the pieces that differentiate brand from brand (eg. UX expression, unique promotions, backend integrations). By “over SaaS-ifying”, Hybris risks losing the differentiated flexibility that made it ‘king’ in the first place.
5. Frequent, Painless Upgrades
Troubled waters, here. While personally I have never really thought of SAP Commerce Cloud version upgrades as “painful”, and the historical 3-4 month release cadence felt “frequent enough”, it’s probably fair to say that “not painful” is not as good as “painless”, and a release cadence greater than 3-4 months is the reality for any software vendor in the era of 2020. The reality is that a typical technical upgrade of SAP Commerce Cloud runs about 8 weeks – with a heavy portion of that effort being in the form of testing & validation. 4 weeks or less is doable if you’re on top of technical debt and have a mature (preferably automated) test framework in place. 12 weeks or more may be the case if you are upgrading from something “ancient” and haven’t adhered to best practices with respect to your customizations.
On the bright side, if we look at the “newer” elements of the SAP Commerce Cloud portfolio, such as Spartacus and the “Cloud Platform Extension Packs”, we do see SAP pushing towards a 4-6 week-ish release cadence. So while the core could be more nimble, the foundation that SAP is laying for tomorrow appears to have easy upgrades built in as a foundational principle.
Another part of the report says the following about client preferences:
“More are opting to assemble a suite of best-fit solutions tailored to their needs,” enabling them to, “seek out exactly what they need to efficiently manage their digital businesses.” 
I’m fully in line with this observation. “Best of breed” (as I call it) is much more common to see than a vendor-centric approach amongst the clients I engage with day-to-day, month-by-month. In fact, I partnered with General Electric Healthcare on this very topic as it pertained to their selection of SAP Commerce Cloud and Sitecore for their headless e-commerce solution. (If you’re interested, you can check out that webinar at https://www.epam.com/our-work/videos/the-power-of-best-of-breed-integrating-sap-hybris-and-sitecore.) I’ve also been mindful of curating an ecosystem of 3rd party vendors (eg. PayPal, Vertex, Avalara, Bazaarvoice), some of which partner with EPAM for our SPARK for SAP Commerce Cloud program (https://www.epam.com/our-work/accelerators/spark-for-sap-commerce-cloud). Ultimately, the entirety of the business needs need to be factored into the solution, not just the (core) e-commerce platform.
Unfortunately, I fear this has been one of the major casualties of the SAP acquisition of Hybris. SAP, with its vast ecosystem of SAP-centric clients, and it’s vast arsenal of salespeople trained to cross-sell every SAP product within that ecosystem, is somewhat insular in my experience when it comes to accepting “best fit” perspectives of clients. With the focus very much on the existing SAP install base, the vibrancy that flowed from actively selling to “anybody and everybody” in years past has dulled somewhat.
Now that we’ve mused ourselves about how SAP might have fared given the evaluation criteria, let’s see what Forrester said across their three main categories: market presence, current offering, & strategy.
Not surprising, as the world’s #1 solution for e-commerce for years for both B2C & B2B, SAP dominated the market presence section. In fact, they earned a “perfect” score across all evaluation criteria. This speaks to the ensuring power & presence of the platform and is a solid reason why the reality is that, regardless of overall ranking, SAP Commerce Cloud is not going anywhere any time soon.
Here too, SAP performed quite well. SAP placed third in this category, missing out on the second spot by a hair. Amongst the sub-categories, SAP was solid across the board; however, the lack of “knock it out of the park” scores to lead the pack in various categories held it back from the top spot.
Strategy is where SAP struggled the most. Of the 10 vendors evaluated, SAP ranked 7th, and last amongst those whom I would describe as “real and regular” competitors. (ie. Competitors that I see show up in RFP bake-offs against SAP.) SAP’s sub-category scores were actually somewhat average, except for the heavily weighted “delivery model” sub-category, where SAP earned the (tied for) lowest score awarded. This heavily influenced the strategy score, and is in my view the key factor that knocked SAP out of the leaders group.
Feedback & (My) Reaction
Let’s take a closer look at what Forrester said in relation to the scores they awarded.
1a. Upgrades are not in line with modern best practices.
1b. More investment is needed by SAP into core platform architecture.
Piggybacking off what I highlighted in the previous “strategy” section, Forrester explicitly calls out in bold the reality of SAP Commerce Cloud upgrades. And the evidence backs this up. For those that read my previous blog post on SAP Commerce Cloud upgrades & versions (https://hybrismart.com/2020/05/14/what-does-history-tell-us-about-the-upgrade-potential-of-the-pending-sap-commerce-cloud-v2005-release/), you’ll recall that I presented evidence that around 35% of the existing SAP Commerce Cloud solution owners are outside of the official SAP support cycle and therefore at risk from having not upgraded to a recent version. So it’s fair to say that upgrades are a real issue that is having real business impact, and this is what is prompting SAP, for example, to extend the end-of-life dates on some of it releases.
To be clear, upgrades don’t “go away” in a SaaS based model. The reality is that APIs, configurations, and other SaaS-based “-isms” evolve and change over time. The software vendors, in order to keep costs down, need to deprecate and eventually sunset features/capabilities over time. Eventually, this breaks backwards compatibility. Solution owners (and their system integrator partners) still bear the burden of testing changes and refactoring code as the e-commerce platform evolves. And their hand is typically forced since the changes/enhancements “will go live” regardless of what they want or do. But what these vendors typically do that SAP is trying to grow into is bear the brunt of the platform deployment, data migration/transformation, and feature compatibility checks. SAP does have their “Platinum Upgrade” offering as part of their cloud licencing, where SAP handles the technical upgrade as part of the licence fee, but at the moment this offering can be triggered only once per year.
2. SAP’s product roadmap and vision are approximately equal to the competition.
I’ll take this as a win. I’ve made the point directly to SAP at conferences past that I felt that other platforms were “catching up”, so it’s good to see that Forrester hasn’t put SAP “behind”. While I think SAP is doing some good things with enhancements such as SmartEdit and Spartacus, it’s been a long time since I noted something revolutionary instead of evolutionary. The (present) value proposition of SAP’s cloud (CCv1/CCv2) offering, which is where much of SAP’s energy is going these days, is so-so at best – especially for a solution owner who already has robust continuous integration and continuous delivery (CI/CD) infrastructure hosted on AWS/Azure/GCP/cloud.
I’m hungry for a bigger, bolder roadmap from SAP. Are you?
3. SAP is offering a cross-vertical suite of engagement solutions via its C/4HANA solutions.
Pertaining to the “deep integrations” evaluation criteria, Forrester does recognize SAP for continuing to build out its cross-product integrations amongst the various pieces of the SAP Customer Experience suite. Kyma (microservice enablement) and SAP Context Driven Services (personalization) are also alluded to. This roadmap is deemed “on par” with the competition.
To my surprise, there is ZERO mention of Spartacus. This is a big deal in my mind given that SAP takes the hit for both “monolith” and (lack of) “microservices”. Decoupling the frontend is a major step forward in bringing additional flexibility and uptime to the platform, not to mention the realities/benefits of a more modern, Angular based storefront. This leads me to believe that some points were left on the table. Probably not enough to push SAP back into the leader group, but enough to get it much closer than it placed.
4. SAP Commerce Cloud is primarily for SAP customers.
This one hurts. If external parties are calling out that your platform is “only” good for those that already use your other software, that’s a wake-up call. I spoke earlier about Hybris’ roots as an e-commerce engine for anyone and everyone, regardless of their IT landscape. Even if SAP chooses not to sell to a non-SAP client base, that’s not the same as “it is not a fit” for a non-SAP client base. In my view, SAP Commerce Cloud has been and still is an e-commerce platform suitable for anyone that wants a full featured and top tier platform. For Forrester not to agree with this point implies a serious market perception issue that SAP needs to overcome. Per the earlier notes on “market presence”, SAP still is tops in market presence today; but if you’re not growing, you’re dying. Hunting for those greenfield opportunities I believe is still key to the long-term success of the SAP Commerce Cloud platform. (For added emphasis, SAP’s current focus on migrating their customers from on-premise or from CCv1 to CCv2 is to their short-term gain, but also at their long-term peril.)
The astute reader will have noticed that my references have all come from the B2C report. The reason for this is that the B2C and B2B report are almost (quite literally, word for word) the same. The emphasis in each report shifts slightly because of the context, but the key points are identical.
That said, I will admit that SAP’s fall from the leader group in the B2B space is probably the biggest surprise for me out of these reports. The previous B2C report from Q3 2018 (https://www.forrester.com/report/The+Forrester+Wave+B2C+Commerce+Suites+Q3+2018/-/E-RES141115) showed strong competition that was getting stronger. For SAP to be “caught” and overcome is disappointing, but not necessarily unexpected in my eyes. However, in the B2B space, SAP had more dominance. (It was also the only platform to be a leader in both B2C & B2B in 2018.) Ergo, falling to “strong performer” in this iteration of the report shows just how fierce the competition is, how commoditized e-commerce has become, and how real the need is for SAP to accelerate its reinvention and reinvigorate its strategy.
I hope this analysis has given you a deeper understanding of Forrester’s views on SAP Commerce Cloud and how it fits/competes within the broader B2C & B2B e-commerce markets. As I said earlier, now is not an “abandon ship” moment. SAP has deep pockets and a tried and true platform. The global talent ecosystem to build and support SAP Commerce Cloud is robust, plentiful and mature. Despite advances in technology and thinking, companies are not keen on reinventing the wheel and jumping to “the next shiny thing” with a full replatform. There is every reason to believe that SAP will regain momentum over the coming years as their long-term bets on how to reinvigorate Hybris come to fruition. That’s not to say that it will be easy or guaranteed – just that it’s doable. It’s also probably fair to say that the era of Hybris’ “exclusive” dominance in the leaders group is over. The competition has also matured and, backed by equally big companies with money to spend on R&D, isn’t likely going away.