SAP HANA Crosses the SAP Business Suite Threshold, Will Customers Follow?

At a major global announcement event today, SAP announced availability of its SAP HANA database for its SAP Business Suite. SAP co-founder and SAP supervisory board chairman Dr. Hasso Plattner outlined the motivation, the history, and some of the project details associated with the announcement. In net, SAP will offer an "extremely competitive" (from a pricing perspective) "rapid deployment solution" planned for release next month (February), with the goal of having customers go live in six months or less—targeting both existing and new customers for SAP Business Suite running on SAP HANA.

This announcement is clearly an emotional one for SAP, littered with quotable quotes, such as

  • "... as big a change as the introduction of R/3 20 years ago" - Dr. Plattner
  • "Why is speed so important? One reason. Mobile" - Dr. Plattner
  • "... a network of networks of realtime business is the vision." - Vishal Sikka, SAP Executive Board
  • "In my 20 years in SAP I have never seen such innovation." - Rob Enslin, Head of Sales

The reason for the dramatic overtone? Finally, SAP feels it has a legitimate option to displace its number one applications competitor, Oracle, in the database tier. For decades, Oracle has enjoyed and employed a Trojan Horse by being the primary database choice by customers who choose SAP applications, putting SAP into the ironic position of making its #1 competitor successful in order for SAP to be successful. While SAP Business Suite also runs on other databases including IBM DB2, Microsoft SQL Server, and its own Sybase Adaptive Server Enterprise (ASE), with Oracle #2 in enterprise apps market share and #1 in enterprise database market share, it is clear that Oracle is the primary target for SAP Business Suite running on SAP HANA.

"Speed" and a return to real-time seem to be the primary benefits promised for SAP HANA powering SAP Business Suite. 20x data loading performance improvements, processing complex queries sub-second, and not having to choose between read and write optimization are examples of the speed improvements. While the overarching themes were business value for customers and co-innovation with partners, shifting enterprise applications to take direct advantage of modern, memory-infused architectures carries the most impact for SAP customers and prospects.

The Bigger Truth: Vision Takes Years, Does Execution Take Decades?

The SAP HANA project has been underway for over three years. Go-to-market in earnest for SAP Business Suite on SAP HANA starts today. Regardless of SAP HANA's speed improvements, enterprise databases are notoriously sticky—many DBAs are well versed in "If it ain't broke, don't fix it.". Enterprise application upgrades are as long and arduous as any IT prioject. What is the compelling economic value, therefore, to IT departments and their business partners to introduce change and risk in order to have enterprise applications run on SAP HANA? Speed only? It is not clear to me if that will be enough alone to drive the types of database conversion numbers SAP might hope for.

However, SAP Business Suite on SAP HANA on the cloud, public, private or hybrid, begins to offer a unique value proposition that will potentially add the line of business to the buying equation. SaaS has been driven by line-of-business interests. The ability to make moving, in pieces or in whole, SAP applications to the cloud, that also clearly takes advantage of considerable SAP HANA innovation, offers SAP a potential shortcut to somewhat ameliorate the challenge of pushing such a difficult change in the enterprise. The other compelling proposition and promise from SAP HANA is significant business process change and big data - in essence moving SAP from the maintenance portion of IT budget to discretionary.

Regardless, however, the real work begins today for SAP to change the balance of power. And it will be won, or lost, one deal at a time, one sales engineer to IT engineer meeting at time, one partner or consultant negotiation at time. SAP, as it did with NetWeaver, is proving again that it can wage an effective air war with SAP HANA and in particular now Suite on HANA. But Oracle wins wars primarily on the ground. SAP's goal of shifting the database layer to itself for applications and big data is spot on strategically. Tactically, however, it will still take a nitty-gritty focus every business day to take on Oracle in the trenches, even armed with Suite on HANA.

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