SAP HANA – slowly moving out of hype into actual projects


2011 was when HANA hype was on over drive – it was along the lines of “HANA will solve world hunger by feeding entire generations on perceived future business value” . Every where I mentioned HANA, customers were pushing back with raised eyebrows. That did not stop SAP from selling HANA though. SAP customers do not typically buy licenses piecemeal – they buy a basket of stuff, and apparently HANA was in a lot of baskets, especially in the last quarter. This is not unusual buying behavior – it is the norm.

And then 2011 ran out. When I came back from vacation, I was amazed with the demand for big ERP projects. And right on its heels, came demand for HANA projects. Not isolated demands – many customers, some of them VERY big names – are now sufficiently intrigued to start pilots for HANA. To say the least, it has taken me by surprise – the pleasant kind.

There is a huge amount of misinformation on HANA that has been spread knowingly or unknowingly in 2011. I think the first half of 2012 will be spent setting expectations straight.

A very common scenario I am running into these days is customers that have custom built data warehouses in Oracle or SQL Server. These have thousands of Stored procedures etc. They want to find out how to migrate this over to HANA. Or more specifically – they want to know if there is a way to semi-automate the conversion of SQL of existing solutions to HANA’s SQL. If they cannot do that – the cost of re-inventing the solution in HANA from scratch is not something they seem to have an appetite for. I have pinged SAP to ask what they think about this. If you know the answer – please post a comment.

Another common question – “so we buy HANA as a datamart, then put HANA under BW as DB, and then under ECC – will this all sit in one appliance? do we need to buy more and more licenses and hardware?”. So far I have not had to explicitly answer this question. Funny enough – they look at the expression on my face and deduce the right answer magically 🙂

Basis experts invariably ask me “hey can we virtualize HANA? Can you put it on a cloud and offer us as a service? When will SAP support non-intel processors and other OS? ” . My answer usually is to point them to existing documentation. If they persist, I show them the installation files and how it can be hacked. That is the best way to deal with techies , right?

Landscape Sizing, HA and DR are all high on CIO agenda – they just want assurances that they can safely deploy this in production. This is a lot more easier now to answer than even a few months ago, since there are more options available, and we have more experience with sizing. This is also where people start getting an idea of the real cost in putting up a HANA system – and there is always an aha moment.

The other half of the aha moment comes from clients understanding there is no one HANA consultant who makes the system stand up and work. SAP started off by saying “HANA is an appliance” – and that is partly to blame for this. An appliance is like a fridge or a wireless router – you buy from a store, bring it home and it starts working after it is powered on with very few instructions. HANA is not a true appliance in that sense- and once customers get that, they realize it is like every other project. HANA needs multiple skills to pull off successfully – data modelling, BOBJ, Admin/security, ETL etc.

BW on HANA has captured the attention of several customers. SAP is doing a good job pushing it in the field. I met several field sales people at FKOM, and was amazed to see how pumped up they are to sell HANA. But more than BW itself – a lot of customers are waiting for BPC to work on HANA. I was not very pleased with the BOBJ integration with HANA initially, but it has improved and I know more improvements are planned. It is best for SAP to nail it before customers start several projects in parallel and stress out SAP support.

Many of my customers – and me too – are waiting eagerly to see how many companies will SAP parade at SAPPHIRE as live on HANA , especially for the BW case. If SAP shows a large number of customers on the key note stage, then we should have a great HANA year in 2012. Towards middle of the year, I think many more HANA projects will start – and not just small pilots. And If SAP does come out with ECC on HANA by end of the year, it will be an excellent shot in the arm. 2012 could well ramp into a terrific 2013 for HANA.

What does Apple’s outsourcing have to do with farming and manufacturing in Kerala ?


If you chop a tree for firewood, you should plant a tree to compensate. And you should do it even if you are not into the whole green thing. Or else you will be turning in your grave constantly when your children and grand children swear ad-nauseum about the trouble you put them in . But I digress.

So Apple outsourced a LOT of manufacturing to China. You should read this excellent NYT article http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html?_r=1&hpRT , and feeling depressed after reading it should be expected.

Does that make them evil – probably not. They are a profit seeking entity, and they sell all over the world. They can do whatever works for them. Did China win that work because of cheap labor? yeah – they probably did. But the manufacturing did not flourish there solely because of cheap labor. It flourished because China has plenty of engineers, built an ecosystem around Apple’s manufacturing needs and then started offering that service to other companies. And then other innovative companies started investing in China to build manufacturing. The story repeats in concentric circles – and it seems to fuel itself.

Did America lose out big because Apple outsourced manufacturing? yeah – I guess it did. But Apple was not the first to do so. And neither is manufacturing the only thing that got outsourced. But did America get anything in return? yes of course. We can now walk into mega marts and buy things a lot more cheaper. We can walk to an Apple store and buy an Apple product much cheaper than if it was manufactured locally.And so on and so on.

So is this a fair trade off? hardly, in my opinion – if what is happening to farmers in Kerala is an indication.

Kerala, my home state in the southern tip of India, literally means “land of coconut palms”. And Kerala is a place where people eat rice in some form 2 or 3 times a day. When I was young – the state had a large number of vast rice fields and coconut plantations. Around the time I was in high school, this was not the case any more. Many farmers moved from growing rice and coconut to growing rubber. Rubber was a “cash crop” which fetched handsome prices from tire manufacturers etc. Fast forward to today. Keralites still eat rice and coconut based food 3 times a day, but they have to buy these (and most vegetables) from neighboring states for a huge price. And rubber values fluctuate so much that not many farmers got rich that way. As agriculture declined, the problem was compounded by lack of supply chain efficiencies in buying and storing food grains and vegetables. End result – farmer suicides started happening in an accelerated manner. Many of them lost their land and fortune and their loved ones. And prices still go up significantly most years.

While Keralites are extremely enterprising and capitalistic when they live and work outside their state, they are mostly left leaning when they live in Kerala. Manufacturing has steadily declined in the state, and it has become a consumer economy for the most part. The state has 100% literacy, and has extremely high standards for health, higher education etc compared to many other Indian states. But despite all of this – manufacturing won’t flourish there. Both parties (well, alliances of convenience is a better phrase) that typically rule Kerala are left leaning to various degrees, and both have strong trade unions which actively discourage manufacturing. Except for IT, I think everything else in Kerala that generates money has a union presence that threatens its existence. This environment is the prime reason why lots of Keralites get out of the state after their education, and live and work outside. I am one such guy too – who finished college and could not wait to get out of there. Due to many people leaving the state, there is a positive side too – these people send a lot of money back to their families that live in Kerala. So the consumer economy generally has always been excellent.

When I read the article on Apple’s outsourcing to China, the situation of Kerala is what rushed to my mind immediately. The long term implications are stark – once you let go of something you do well, you have to be prepared to pay the price. And you should be able to invest in something else to compensate for the long term repercussions. It is the price to pay when economy takes a global flavor. You cannot pick up your toys and go home arbitrarily when you don’t like the game after some time – you need to stay in the game and invest wisely for future. Globalization is not exactly a bed of roses – it is a mixed bag.

IT outsourcing is something I am very familiar with. If a company outsources some IT functions and uses the savings to invest elsewhere, it works great. If it just eats up the savings, and don’t invest elsewhere – it just won’t survive in the long term. Outsourcing might create other kinds of jobs too – like Apple being responsible for increased demand for AT&T etc and creating jobs there. Or the outsourcing companies in India creating jobs in the US when they want to get into high end consulting etc. Apple has a large consumer base in China – and makes money in that market. One day when tax laws make it attractive to bring that money to US, Apple might do that – and it will help US economy. It is pretty hard to judge – at least for me – on how much these indirect benefits will offset the long term costs. But at a minimum, it does offer some relief.

Outsourcing of manufacturing and IT and other things won’t go away – although in an election year, many might say it will. The question is how will we compensate for the long term impact ? There is no one magic bullet – it needs a lot of things to fall in to place – on both public and private sector. And sadly, it might not get much traction in US till the presidential elections are over.

SAP – ECC is catching another wind. Are we ready?


I don’t think I have seen another time after the mid to late nineties when the market was this hot for SAP.  Several companies seem to be in a hurry to do big SAP projects again . And no – they are not talking of big HANA projects, or big mobility projects or big cloud projects. Drum roll please……They are talking about the good old on premises ECC projects – FOR REALS! It is like the mainframe – it never dies, and always catches another wind.

This does not mean no one cares about HANA, Mobility etc. All these customers have plans for all the innovative stuff as part of their projects, but they are not front and center in projects unlike in the keynotes we see from SAP leadership at SAPPHIRE and Teched.  HANA and Mobility experience will probably be an additional differentiation for SIs trying to win the implementation work.  Along with ECC, some of the other business suite systems like CRM and SRM are also showing up prominently in these projects. I expected some of these companies to consider cloud solutions for ERP – SAP or otherwise. But big customers did not seem to have that kind of faith in cloud ERP as I thought. Maybe it needs a few more years to catch on.

There are probably a bunch of reasons for this surge – investment money kept away in last 2-3 years is now being spent,  increase in M&A and divestiture activities , economy is slowly recovering and so on. There are a bunch of interesting challenges that go with this too.

1. Experience of leading and working in huge global projects

Not many PMs and team leads  in today’s SAP world have the big implementation experience. People who did those in nineties have generally gone to senior leadership positions in SIs and clients, and new generation will need some mentoring.  Unless you have done it yourself before – it is not easy to plan and execute a blueprinting session when you have 120 countries in scope. and blueprinting is only the start. So far, I have not seen anyone asking for a global agile SAP implementation, but I am betting that I will hear that one day soon.

2. Quality and quantity of Business Suite experts

If what I am seeing is the beginning of a big trend that will last 2-3 years atleast, then it remains to be seen if SIs and customers can keep up with the demand for project resources – both on quality and on quantity. Education needs will surge, and I wonder if education needs can be met effectively in large scale

3. Architecture challenges

Unlike the 90s where BDC and ALE ruled, the world has changed quite a bit on technical front. ABAP has moved by leaps and bounds, and a modern day architect has many options, and many challenges. Question is – do we have enough people who can design and create big complex systems from scratch that use modern SAP technology in grand scale?  And will modern SAP technology withstand this test of scale?

SAP is pretty serious about getting number 2 position in DB market by 2015. If these big projects can be convinced to switch from ORACLE, MS and DB2 systems – that will be a great start to make this goal. Somehow, I don’t feel like holding my breath on this quite yet. But I am going to keep a close eye on this, and will start asking customers from now on whether they feel good about switching their DB .

4. Does SAP still have enough people with deep core business suite knowledge ?

When a large number of big business suite projects start, there is always a tax on SAP – the number of trouble tickets will increase. I would think SAP’s developers are now mostly focussed on HANA and other new stuff. Will SAP have enough people who can take care of a flood of messages? Even though SAP Business Suite software is way more mature than in 90s – big projects will always have big problems that need deep experience from SAP to solve.

5. What about all the innovation agenda items?

My friends from technical side will appreciate this for sure – what will happen to all the cool innovations when a large number of configuration experts (referred to by names like  SPRO jockeys ) take over a project, and push tech stuff to the wall? Will HANA and Mobility and Cloud stand a chance? or will they all become a phase 2 item? The only one where I see some light is on BI. Over time, a lot of functional folks have realized that it is probably better to give some attention to their BI colleagues.

There is a silver lining here. It gives SAP enough breathing space to make the innovative new products more robust by the time the big projects are ready for them to be used in prime time. There would not be a risk of licensing revenue loss since SAP license sales usually happen as a market basket, and not a la carte.  So HANA sales, mobility sales etc can still show a healthy upswing while projects focus on business suite.

6. Do customers still have sufficient inhouse expertise to run the big gigs ?

Best SAP projects happen when customers pair consulting firms with strong internal resources. But over time, most of these experts move into management, or move to other companies, or their jobs get outsourced etc.  So I would imagine a lot of hiring will happen in 2012 for staffing internal roles. And that typically means some solid staff from consulting companies will switch employment soon, and then these firms will have to do some firefighting.

That is just the few that rushed to my mind – and there must be a hundred more to talk about. Feel free to post your thoughts in comments. It is going to be very exciting to live through a series of big projects again.