And Vijay Says...

SAP HANA, Mobility and On Demand – where is the money ?

SAP had a great quarter – and deserves kudos for that. Not a surprise either that maintenance revenue is the big contributor. Despite what analysts say about disruption and other such stuff – when you have a stable and committed install base, they are not going anywhere in a hurry. So SAP can take reasonable time to get new revenue streams. However it is not a permanent hall pass, and investors will become annoyed quickly if EPS drops.

So they have these three opportunities to make new money – HANA, Mobility and On-demand.

HANA is the biggest name from a pure marketing POV – SAP is shouting from the roof tops that HANA is awesome. But what is the reality? Dennis Howlett’s post http://www.zdnet.com/blog/howlett/jim-snabe-co-ceo-sap-explains-current-business-drivers/3313?tag=mantle_skin;content says Snabe could not name a live customer for HANA. We know there are several POC customers from the SAPPHIRE videos. We also heard the 10 Million a week pipeline . We also heard it is fast and easy to stand up a high value HANA scenario. So why is not Snabe listing out several customer names using HANA and deriving value in production ? Assuming 20% of the pipeline will close sales – it should bring in 72M in 2011. May be for a 1.0 product that is pretty good.

So then what happens when HANA moves under BW as its database? There are about 15000 installations or so of BW as I heard somewhere. How many of these will move from ORCL, DB2 etc to HANA? I am not convinced there will be a mass exodus from existing DB to HANA DB. For one – SAP needs to prove HANA can be fail safe in HA environments. And of course legacy DB vendors are not dumb – they will use licensing terms, instability of a new product and other FUD to delay a transition. It is an even bigger problem when HANA goes under business suites. So how much money will SAP make out of HANA eventually?Remains to be seen.

Moving on to On Demand – they have two things at play. ByD and LOB on demand. In my opinion, it is hard for SAP to make it big on ByD any time soon. They started late, had delays, and still are aiming for low numbers. There is also the worry of cannibalizing ERP on premises. Maybe some day this will change – but not soon enough.

However, LOB on demand solutions I think is a money shot. Compared to HANA – the upfront development cost is low. A small team of product managers need to figure out a good solution. Technology is already there from ByD, and since both report into same SAP executive in Peter L, I am pretty sure ByD can be extended as needed for a good reason, if an on-demand application needs it. Development skills are existing – not new, like HANA. And even if SAP takes time to sell this – one big customer is all they would need to break even. And since it is on internet, it can reach more people quickly. And they can/should be used on mobile. And once you institutionalize the development process – each successive application can be made faster and cheaper.

However, on flip side there are two big issues. One – it is never easy for a small developer to be an SAP partner to build applications on top. And two – SAP needs scalable data centers to host this. Neither is particularly easy to pull off soon.

And then there is mobility – which should be the easiest place for SAP to make money., given the growing market. Every client I know of has a mobility initiative. And very few know what SAP has to offer. Which is a pity to say the least.

Bottom line – SAP seems to portray the next big things as HANA, On Demand and Mobility. And I think it should be exactly the other way around. What say you?

Google plus – tribes won’t follow till chiefs jump in with both feet

Couple of weeks ago – I posted my opinion on G+ in this blog. I have been lurking there since then for a bit to see if anything has changed, or whether anything has improved. And guess what – nothing has changed for me.

The people I follow on twitter, and via RSS feeds – they are all on G+. Not surprisingly, they are all conversing there primarily on the same discussions they are having on twitter and on their various blogs. And a lot of it is happy talk about G+ 🙂 . I also know first hand that several of these folks also have extensive back channel conversations between themselves on email threads due to privacy concerns etc.

As long as these folks continue to share content via twitter and other media that I am already present in, I find no reason to have yet another channel to hear the same stuff. In fact it is extremely boring and frustrating to see the same content coming at you from multiple places. In case some one says something interesting on G+, I have invariably seen some one else post it on twitter almost real time. Works for me.

Till such time as G+ becomes the primary channel for creating and sharing content – most of the “ordinary”, “non-geek”,”non-socmed expert” people (tribes) will stay with the incumbent platforms like facebook and twitter. I don’t think Google invited people with socmed clout (chiefs) just because platform was not ready, or because these early adopters are known for jumping into anything that is new and stay for some time at least – I think they primarily did it hoping that tribes will follow their chiefs wherever they go. What they probably did not realize was that the chiefs will play it safe and keep a foot on old and new worlds. As long as chiefs don’t jump in with both feet, I don’t see the tribes having any reason to glance at the new shiny world.

Last week I read – on twitter – that G+ now has 20 million users. Very cool – impressive start. But that is a very low number if you consider the over all population of potential users (about 190M for twitter, and 750M for facebook I gather). I have seen the “ROI is the wrong metric for social media” message touted by social media experts. I don’t buy that for a minute. And now I see a very similar argument being put forward on G+ – along the lines of “I don’ t care how it is today, I am in for the pleasure of the ride, lets see where it takes me” . Not me – I don’t have the time or inclination to jump in for an unknown thrill ride.

I stayed out of google wave, SAP streamwork and twitter when they started – and once twitter proved useful, I jumped in wholeheartedly. Wave died (not unexpected), and streamwork has been steadily improving, and I have started to dip my toes a bit. Facebook was a winner for me from day 1 – it was one place where everything I wanted to know about the latest on my hobby was posted. I will do exactly the same for Google plus – If (not yet sure if I can say “when”) I see the chiefs commit fully, and not treat G+ as yet another channel, I will jump in and stay. The rationale is simple – I am less of a content provider, and more of a content consumer. If I become primarily a content provider, my whole perspective on this topic might have been very different.