As HANA matures, where should SAP focus?

It is not news that SAP is betting the farm on HANA. SAP’s sales and marketing organizations have done a tremendous job in making sure the HANA message is delivered loud and clear to its customer base.  SAP sold more that 100M Euros worth of HANA last year , and will probably do much bigger numbers this year too.

 

BW on HANA is already out, and is touted as a killer app. It might very well be a killer app – but that remains to be seen. In our internal lab projects, it is not as smooth as we expected. It is a bumpy road – but it is definitely fast. DSO activation for example is super fast, but it will also fail inexplicably, and then the time you save in activation is lost in trying to research what went wrong. The good thing is that since we know it is very fast, despite the teething problems – I am sure lot of customers will buy it. And to a certain scale, software is sold in bundles any way – so nothing will stop SAP from selling HANA licenses. Customers actually using HANA in production is another story altogether.

 

Buying is just a first step – the bigger question is who will implement. As of now, mostly SAP PSO is doing the implementation. But that is not a scalable model at all. PSO cannot satisfy the market by themselves, and SAP should be aggressively pitching to SI partners to sell and implement BW on HANA. You get some benefit by just doing a database switch to HANA, but the real benefits come from simplification – which means redefining the datamodels and data flow.  And that takes time and expert industry knowledge , and not just technical skills.

 

SI partners are terrific at implementation, and building accelerators for implementation. However, what they are the best at is NOT building apps. For apps, it is the smaller developer’s world. But then, SAP HANA is not yet available for smaller developer to do something about productively.  SAP has made a good first step. A sandbox is available for them to play with. But it is not a full development environment they can create a product, license it and sell it in a store.

 

So on both sides – implementation and apps building, SAP has some ways to go. If they don’t get their act together in short time, next year – we will start hearing the HANA shelfware stories.

 

There has been some announcements meanwhile on HANA for SMEs that I saw a few days ago. I am not convinced how SAP is going to sell HANA to SME clients. SME is primarily a market for hosted systems – public or private.  Why would they care about the nuts and bolts of the database that their system is based on? They just expect it to be reasonably fast.  As I mentioned to few friends on twitter – not verbatim –  “If I hire a landscaper to mow my lawn, why would I care if he uses a Black and Decker electric machine, or a manual push mower?”. I don’t – I just pay the guy to mow the lawn, and will hire another one if the first one does not do a decent job.  If there are special apps that are HANA based that give me a positive top line impact, there is a case to pay a premium for HANA. Otherwise, I doubt this will fly.  Especially after companies like Workday have made their cloud offering in-memory based fully and not charging specifically for it, it is hard to ask a customer to pay a premium for modernizing an old system.

 

Once BW on HANA is out of the way, obviously SAP will come out with ECC on HANA.  With most of the heavy lifting in ECC done in ABAP layer, customers will not see any huge benefits buying HANA as a database. And it is a few hundred million lines of code – so SAP is not going to rewrite everything in ECC to work on HANA. This essentially means SAP needs to build more things like the CO-PA accelerator, and more specialty apps for ECC that needs HANA.  Which then needs the small developers and SIs to play a big role to scale it meaningfully.

 

So, will SAP make the effort and actually make it work for the small developers and SIs ? or will they try to do it all by themselves?  And while they are at it – I hope they try to make this work for mobility, cloud and everything else too.  one approach – is to stay the way it is now. SAP will try to create the market, with the hope that some day in future partners can scale it. Or they can make it work for partners and smaller developers right upfront, and build a larger momentum.

 

None of this is new to SAP – several people have already made the case to SAP on these matters. And to SAP’s credit, they are good listeners. Now the only question that remains is when they will act.