Friday, October 24, 2008

SAP’s Investment in Linkedin and EDI and B2B Collaborative Networks

It was reported today, October 23, 2008 that SAP’s Venture Capital arm made an investment in Linkedin, a business focused social networking site that many of us use. I am especially fond of Linkedin as it kept me in contact with people that ultimately hired me. There are a lot of industry folks scratching their heads and wondering why SAP would invest in a social-networking site like Linkedin, but I am not one of them. I will tell you why in a moment.

Let’s talk about Linkedin. Linkedin enables a person to create an online profile (much like a resume or CV) and then connect to other people’s profiles that are known to you through personal and/or professional relations. The result is the user ends up with millions of professional connections through relationships that have relationships that have relationships. You connect only once, but then you have access to millions of other professionals that are in Linkedin’s collaborative network. Each user that joins Linkedin brings with them a network of professional contacts and relationships, which are added to and become part of the collaborative network. The ability to easily connect to other users on the network is already built into the system. It is a simple button click to expand one’s collaborative network.

Now let’s revisit a recent statement from SAP co-CEO Leo Apotheker, “SAP will be focusing future development of its business suite of products and Netweaver integration middleware at meeting business needs to develop and maintain collaborative networks.” Where can one find an example of a more “collaborative network” than Linkedin? I see SAP’s investment in Linkedin as an investment in training and consulting on how to both do and be a collaborative network.

If you take a look at SAP’s recent strategic investment in Crossgate,, you will see another example of a collaborative network. Crossgate’s Business-Ready Network, for B2B / EDI managed services, enables SAP users to connect once and have access to all the other users on the network (over 40,000 at last count). Each time another company joins this network, and adds their trading partner community, the network expands for all other SAP users. This collaboration greatly reduces the time and expense of communicating business-to-business for all SAP users. This is a B2B collaborative network.

Henning Kagermann, SAP co-CEO stated at SAP's Sapphire conference, “Collaboration is the most important market transition going on in business… It's about connecting systems. We have to move out of our comfort zone and manage these networks collaboratively."

Can you now see the Collaborative Network connection between the Linkedin investment and the Crossgate investment?

If you would like to discuss this topic in more detail please contact me.

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