SAP aggressively moving customers to new database

You’ve got to hand it to SAP for competitive vision. Then take some back for how it’s explaining itself.

You’ve got to hand it to SAP for competitive vision. Then take some back for how it’s explaining itself.

The German software giant on Tuesday morning announced that the next version of its business applications would run on only its High-Performance Analytic Appliance, or HANA, an advanced database that is good at crushing through lots of data, fast.

It is a big deal, because for years SAP had relied on the Oracle database, on which it ran its complex business planning applications. It
still gets much of its revenue that way.

William McDermott, SAP’s chief executive, called it “the biggest launch in 23 years, possibly in SAP’s history”.

By making the future of SAP an all-HANA affair, the company is styling itself as the software company for big businesses to run in a world of cloud and mobile computing, with rapid data analysis.

The company claims, for example, that the system can take 600 gigabytes of raw corporate data and reduce it to 8 gigabytes. At that level, a chief executive could theoretically run his company from a mobile phone.

For the present, however, these applications, called S/4, are available for several so-called “line of business” applications, like finance and procurement, only on computers inside corporate data centres. More specialised applications are yet to emerge.

Moreover, the cloud version of the new “suite” of applications has just one function, called Simple Finance. A company spokeswoman said more cloud applications would be available this year. HANA has been available as a cloud computing product since 2013.

“It’s still a work in progress,” said Paul Hamerman, an analyst with Forrester. “The road map and the functionality aren’t clear.” The company has introduced a simpler user interface, he said, and seems headed to a new business model, based more on subscription revenue from software delivered via the cloud.

The competitive intentions were clearer. McDermott introduced S/4 by noting that the company had over the last several years built or acquired a number of cloud-based functions. Pointedly, a number of these spoke to SAP’s major competitors: HANA is a counterpart to Oracle, human resource management to Workday and sales management to Salesforce.

Other areas he stressed included commerce between companies, part-time work force management and expense management.

Put collectively, the chief executive appeared to be speaking to an entirely different way to manage corporations and work, based on rapid analysis and mobile systems.

“It’s not important just for SAP,” said Steve Lucas, who runs sales for S/4. Older databases, he said, “were created for batch reporting, which means you wait long periods for reports. This will dramatically accelerate the process — it will cause companies to pause and re-engineer themselves.”

What that will mean in effect, however, was absent from the SAP announcement. Much of the actual announcement of S/4 was a long presentation thick with corporate history and technology theory by Hasso Plattner, SAP executive chairman, that appeared to confuse as much as it clarified. “They need more customers on this and more functionality on the product” before its meaning is well understood, said Hamerman. “It’s a gradual transition.”

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