Other advantages lie in SAP's financial stability, but "more importantly, when you're inside SAP you can leverage the relationship SAP has with customers," Bannon said. "As a startup you'll never be able to have 40 companies sitting around the table telling you what their needs are so quickly."
There are certain disadvantages, depending on how you look at it, Bannon added. "When you're inside SAP, you have to kind of work within the context of the SAP goal," he said. "When you're outside, you can turn quickly whenever you want to, a little more freely. But if you're interested in going after a very big market and that market is something SAP is interested in going after, then it's a perfect match."
LVM is now SAP's fastest-growing product aside from its HANA in-memory database, although LVM's total sales are much smaller, according to Bannon.
Other recently released products that arose from SAP's entrepreneurial efforts include Precision Retailing, a mobile application that gives consumers personalized offers in real-time, and Smart Meter Analytics, which uses HANA to crunch large amounts of smart meter data for business insights.
Projects in the pipeline include SAP for Utilities Cloud EV Readiness Package, which will help power companies get a handle on electric vehicle infrastructure, and a project code-named BINGO, a suite of SaaS (software as a service) applications providing analytics and other capabilities for mobile game and gambling companies.
These efforts notwithstanding, it would be wrong to discount the cultural challenges SAP faces "moving from being a monolithic ERP company to an entrepreneurial, agile collection of really good startup ideas," said Jon Reed, an independent analyst and SAP Mentor, a title given to the company's most committed community members. "That's a huge transition."
"The challenges become, how do you discover ideas, nurture them until they're grown and then scale them," Reed added. "I would argue that SAP has proven to be good only at the first of these things."
HANA is an example of a significant success arising out of internal research, with strong initial sales and a central role in SAP's product strategy moving forward. However, "the difference is you had buy-in from the top" in the person of SAP co-founder Hasso Plattner, Reed said. "HANA clearly was a very special research project."
Other projects at SAP have died on the vine, sometimes due to internal politics, according to Reed. "Something you develop may be disruptive to something else SAP is doing," he said. "To be fair, that's not just an SAP problem."
"Still, at some point organizational politics play an unwanted role in deciding what goes to market," he added. "Hopefully they can find a way to protect good ideas and bring them forward."
Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com