SAP just funded a startup built to help its own customers escape SAP

The business move

Conduct, a London-based startup founded by three former Palantir engineers, raised $60 million in a Series A round co-led by Index Ventures and ICONIQ. Notably, enterprise software giant SAP also invested in the round. This funding boost pushes Conduct’s total capital raised to date higher as it aims to tackle a tough challenge facing SAP customers: extracting value and data from entrenched SAP systems.

Why it matters

SAP customers often face high lock-in costs due to the complexity and rigidity of traditional SAP software environments. Conduct’s mission is effectively to help these customers escape or augment their SAP systems without rebuilding from scratch. SAP’s investment signals recognition that easing this lock-in pressure aligns with its longer-term strategy, possibly by encouraging hybrid SAP landscapes or better integration options. For enterprises, this funding round pressures SAP customers to reconsider their IT architecture strategies, opening up options that can lower costs or increase agility by reducing SAP dependency.

Who gains and who gets squeezed

Conduct’s backers and customers gain a new alternative to the expensive and slow process of SAP migration or replacement. Conduct’s platform, built by engineers with deep experience in data-heavy analytics environments, likely accelerates enterprise data access and interoperability, lowering risks for SAP clients. Meanwhile, SAP’s traditional ecosystem of integrators and consulting services may face pressure if customers shift toward more flexible models enabled by Conduct. SAP also hedges its position by investing instead of competing directly, suggesting some internal tension and a defensive posture to retain control over customer data strategies.

What to watch next

Watch how Conduct commercializes its tools to deliver tangible cost and speed advantages for SAP customers. Adoption rates will reveal whether enterprises are ready to invest in platforms that loosen SAP’s grip without wholesale system replacement. SAP’s role as an investor also warrants scrutiny: will SAP eventually integrate Conduct’s innovations or keep it at arm’s length? These dynamics could influence future enterprise IT spending and the SAP ecosystem’s power balance.

AI Quick Briefs Editorial Desk