The world's largest manufacturer of software for controlling companies, German SAP is finally speeding up in AI

“The software company SAP has finally noticed that AI opens up the possibility for established providers in particular to exploit a new competitive advantage. And act now.

The software company SAP is not one of the fast ones. Somewhere between the legendary beginnings, the acclaimed IPO and the rise to become the world's largest manufacturer of software for controlling companies, the entrepreneurial spirit was lost. Fat, cumbersome -  the group has to deal with such attributes. No question, the pioneer has grown old.

It is also true, however, that over the long term the group has repeatedly managed to get the curve under control at the last minute, so to speak, to pick up speed again and to clear the field from behind with all its financial clout. That was when it was going online, and again when it was time to move the business to the cloud. Now the years are tough again: This time SAP faces competition from both fast-growing cloud companies and powerful "hyperscalers" like Google and Microsoft - all digging into the business.

Maybe that's why CEO Christian Klein was initially skeptical about the new possibilities of artificial intelligence. After all, the group had no experience with this, the competition is based in America, and customers could become even more unsettled. The topic has simply overrun Europe's largest software company. If the signs don't deceive, then the paralysis is over now.

In May, the group announced partnerships with Google, Microsoft and IBM, and last week the corporation Sapphire Venture published a plan to invest $1 billion in young AI companies. And now the group is directly investing in three outstanding companies, above all in the German AI hopeful Aleph Alpha from Heidelberg.

All this combined with a public change of heart, away from "Artificial intelligence will remain a marginal issue" to "Artificial intelligence is the next big thing".

SAP has apparently noticed that AI opens up the possibility for established providers in particular to exploit a competitive advantage.

After all, no company has access to more company data than SAP. AI is absolutely dependent on such data in order to learn.

The Board of Management has evidently recognized this opportunity and is now confidently going on the offensive. In doing so, the Board promises security to unsettled customers: their data will not leave the SAP environment. Late, but still: SAP has set the indicator again.”