Are SAP’s Layoffs Due to an Impressive Transformation?

Executive Summary

  • SAP’s has come up with a logic for key layoffs in areas where their products are failing.
  • We analyze the evidence for SAP’s logic.



Let us see how SAP’s explanations hold up.

The Quotations

An Impressive Transformation?


Here is a transcript of the conversation.




Our Analysis

SAP has layoffs in many of the areas in which SAP has been unsuccessful. SAP Cloud, Leonardo, HANA, etc.. If the demand had materialized for the offerings, the layoffs would not have been necessary. However, SAP makes a claim that we have not seen made anywhere, which is that the layoffs are not layoffs or a sign of weakness in the layoff areas, but instead is an “impressive transformation.” The term digital transformation, which is a fake term that we covered in the article The Problem with the Term Digital Transformation, has led to the trend of companies calling any change or any setback as a “transformation.” SAP also claims that this is “obvious to most.”


Mueller then begins his answer with sort of boilerplate motivational speak. And he immediately begins by emphasizing the importance of innovation. What is curious is that the layoffs themselves show how lacking in innovation SAP has been. The evidence for innovation at SAP is extremely weak.

Here are a few examples.

  • We have documented how HANA, a database that is highly touted by SAP for innovation was based upon two acquisitions (acquisitions are not innovation) and how SAP has simply backward engineered other databases as covered in the article Did SAP Just Reinvent the Wheel with HANA?
  • There is also a complete lack of innovation in SAP Cloud, which will now simply be a system to upcharge customers for AWS/GCP/Azure as we covered in the article How to Understand SAP’s Upcharge as a Service Cloud.
  • S/4HANA is not at all innovative. It is a technical “rejiggering” of ECC’s backend, that increasingly looks like it will be implemented on premises without Fiori.

Then Mueller goes on to discuss machine learning, which many vendors also claim, but is really just a bubble that will be popping shortly. If you look at SAP’s machine learning claims, you find that SAP has simply added some standard machine learning algorithms that it had nothing to do with developing to a few of its products, but it charges for them when they have been available for free for decades. We covered this topic in the article How Real is the SAP Machine Learning and Data Science Story? Any customer who is purchasing “machine learning” from SAP should contact us because you can get everything SAP is selling in ML for free. You just need to know how look for those items online.


Overall the first answer by Mueller is more of a diversion away from the question rather than any type of observation about the layoffs — which again, are not called layoffs in the question, but an “impressive transformation.” As in Orwell’s 1984, War is Peace.

Do the Layoffs in HANA Point to Problems with HANA?






Our Analysis

Well first off, it is unclear who actually understands SAP’s strategy, as the following graphic explains.

Blaming people for not understanding what SAP’s “strategy” is, is not a true critique if the strategy is not knowable. This is a constant feature of SAP messaging, that if their behaviour appears erratic or illogical, the fault lies with people that “don’t understand ABC or XYZ. Sometimes things just don’t make any sense. 


As we have covered in articles like Why Did SAP Stop Reporting HANA Numbers After 2015?, HANA’s growth plateaued in 2015 when they switched the narrative to S/4HANA. HANA is an extremely expensive database with no differentiation in the market How Were SAP’s Claims True if HANA is Now Not a Differentiator?


This means that SAP is not receiving a return for continuing to make HANA the primary marketing tentpole that it once was.

We covered in the article HANA’s Time in the Sun Has Finally Come to an End in mid-2018 that SAP would reduce its marketing and development and overall investment in HANA because it did not make sense to continue to do so. Now, less than a year later, SAP is doing what we predicted they would do, but we have been told to please not emphasize this fact. Accenture, Deloitte, Infosys and Gartner, along with every HANA resource would rather not have it published that all the information they have been telling their customers about HANA has been false.

Therefore, while HANA is not going to be discontinued as a product, it is not going to receive the same emphasis or internal resources as it did in the past.

Meuller tells several lies in his response.

  • The fact that SAP promoted a new individual to a position in HANA does not mean anything. It has not mattered who had that position in the past because HANA’s design objectives are illogical because they were initially set by Hasso Plattner who was unqualified to design a database.

iDataLabs makes its money by selling data to salespeople. Unlike SAP, they have no incentive to overestimate or underestimate HANA’s usage. This means that even with all of SAP’s marketing push since 2011, SAP was not able to make HANA anything more than a niche database. 

  • SuccessFactors is on HANA?: SAP customers are not live on SuccessFactors on HANA. SAP is still testing an internal version of SuccessFactors on HANA as we covered in the article Did SAP Move SuccessFactors to HANA?
  • Analysis of Layoffs is Too Narrow?: Our analysis, which Mueller may be referring to as our articles on SAP’s layoffs have been very widely read, and we know they have been discussed within SAP as they did not provide the desired spin on the layoffs, is not simply based upon the layoffs alone. They are based upon field reports related to HANA and based upon years of research into HANA.
  • HANA’s Future Priority?: We can’t predict the exact priority of HANA in the future, but it is going to be reduced.

Do the Layoffs in HANA Point to Problems with Leonardo?






Our Analysis

Mueller is really lying in this explanation. We covered in the article Our 2019 Observation: SAP Leonardo is Now Dead, that Leonardo will disappear as a product. SAP cannot have success with Leonardo because IoT is based upon open source components (which SAP is never successful with), and IoT is not inherently tied to the ERP system, which is how SAP sells all non-ERP applications into their account base. SAP can normally get a few companies to invest in something like Leonardo, but these are really just custom development projects. Information from those that have worked with Leonardo state that it is not a product. SAP will create a custom solution for you if you pay them. But it is not a packaged solution.

Machine learning is not expanding in SAP.

Mueller’s entire response is false. The reason the layoffs hit Leonardo is that Leonardo is not relevant for customers, they are not buying, and therefore Leonardo resources are not needed.

What is SAP’s Biggest Challenge?

Q: What is SAP’s biggest challenge and its biggest opportunity?



Our Analysis


If you are using the term blockchain to fill the gaps in your life or to make yourself seem more interesting than you are. If so you need to talk to your doctor as to why you feel the need to use this term.

So it is odd to read a few paragraphs later about how it is tempting to get carried away with buzzwords. A major problem with Mueller’s predecessor, Bjorn Goerke.

The things Bjorn Goerke said did not come true and were often misleading. Who attended a session with Goerke and said “yes I am getting the real story here.” The misinformation in this interview with Ray Wang comes fast and hard. Entirely left out of this discussion is how SAP is marking up cloud services by between 3x and 10x. 

Virtually nothing that Bernd Leukert said would happen came true. SAP has a distinct shortage of people in top positions who will tell the truth. If all the top people are good for is repeating false information, it will be impossible for SAP to make the changes they need to in order to improve. 

Now both Leukert and Goerke are gone from SAP, however, Mueller does not seem like he will be saying anything that is true during his tenure. Then Mueller will be gone in a few years, replaced by another practicer of make-believe. These characters all say about the same things, so there might be an AI robot who is actually writing these comments, and Leukert and Goerke, et al are simply hired actors. At this point who can tell the difference.

The rest of Mueller’s quote does not give us anything to analyze because it is lacking in any content.


A number of SAP resources critiqued our analysis of SAP’s layoffs. A month ago we were told by many SAP resources not to comment on the layoffs. That it was “inappropriate.” However, Mueller now has commented on the layoffs, and it is doubtful any SAP resources will state that it was inappropriate for Mueller to comment. The concept here being that only SAP should be allowed to comment on their layoffs and that all of those that work in SAP or research SAP should look to one source for what the layoffs mean — which is SAP’s PR department. However, unlike any of the PR controlled explanation provided in this article from SAP our analysis actually made sense.


However, if you work in SAP, listening to Mueller’s explanation is a bad thing, because it will prevent you from making adjustments. SAP is making these adjustments but does not want the outside world to be able to understand what they mean.

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Financial Bias Disclosure


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