SAP celebrates its 40th anniversary this year, a milestone that's a reminder of just how long it took the company to become an undisputed leader in the ERP and larger enterprise applications category. It also puts in perspective the company's comparatively young, three-pronged strategy to push into the database, mobile-computing, and cloud-computing markets.
After the first day of SAP's annual SAPPHIRE event in Orlando on Monday, there were signs that the database push, anchored by the Hana in-memory database , is still long on vision and short on real-world customer proof points.
The mobile push is more mature, with evidence of more customers, plus fresh news Monday on how SAP is filling in gaps in the portfolio. The cloud strategy is in transition, with co-CEO Jim Hageman Snabe and executive board member Lars Dalgaard--founder and CEO of the recently acquired SuccessFactors unit--set to deliver a keynote address on the topic here Tuesday.
It's hard to think of SAP's in-memory, mobile, and cloud strategies as new, given that this is the third year in a row they've been highlighted at SAPPHIRE. In Monday night's opening keynote, SAP co-CEO Bill McDermott almost seemed to reprise actor Gabriel Byrne's opening speech on business themes from last year's SAPPHIRE. McDermott explored a pastiche of "paradigm shift" topics including the consumerization of IT, connected-everywhere mobility, the power of social networking, and the imperative to "think from the customer's perspective into the company rather than from the company's perspective out to the consumer." The soaring, dramatic 10-minute discourse circled back to the need for innovation and SAP's enabling technology and leadership.
This was followed by a one-on-one interview led by TV personality Mika Brzezinski, co-host of MSNBC's "Morning Joe," who threw McDermott a series of softball questions about business and technology trends. McDermott served up a few solid examples of customer innovation, highlighting Bechtel, which used SuccessFactors talent management apps to cut senior management and focus around growth areas during the recession. As a result, the engineering firm not only survived, it grew, McDermott said. And Harley Davidson used SAP ERP software to help consolidate and optimize operations. But it wasn't just about cutting cost; Harley moved to personalized manufacturing in the process, thereby driving up customer satisfaction, loyalty, and growth.
A panel discussion with executives from three prominent SAP customers stayed focused on the 30,000-foot themes, but it could have used more examples and details. In the case of Hana, there wasn't much detail to offer. Luxury retailer Burberry has been running its global retail operations on SAP ERP for six years, but CEO Angela Ahrendts (a frequent guest at Salesforce.com events) said the company is still testing Hana and a related clienteling app. The Hana-powered iPad apps being developed will enable sales associates to have personalized interactions with customers with knowledge of where they shopped, what they liked, and what they bought, Ahrendts said, but they have yet to be proven.
The two other execs on the panel, Ray Griffith, CEO of Ace Hardware, and Scott DiValerio, CFO of Coinstar, spoke about potential uses of Hana, but impressive details on real, measurable achievements to date were tied to their recent ERP deployments. Griffith of Ace said visibility into supplier performance would enable the firm to cut nearly $80 million out of its $420 million inventory base, improving turns and freeing up cash to invest in innovation. DiValerio said Coinstar's SAP apps will make it easy to roll out three to five new businesses patterned after its fast-growing Redbox video-rental vending-machine business.
More Hana customers are to be featured during Wednesday's keynote presentation by CTO Vishal Sikka and Chairman Hasso Plattner, but deployed-customer examples weren't plentiful here on the event's opening day.
My colleague Eric Lundquist and I talked with Sanjiv Purba, the CIO of Home Trust Company, a Canadian mortgage lender that started testing Hana in January using SAP Business Warehouse data. Hana loaded faster, compressed data better, and returned queries and reports four to five times faster than the company's BW instance running on Oracle, says Purba.
Purba says he believes Hana will outperform Oracle Exalytics and other in-memory alternatives because SAP includes data extractors with Hana that quickly move data from SAP apps into the database, eliminating otherwise time-consuming batch data-movement and transformation steps. Home Trust is keeping its eye on SAP's plan to run transactional apps and analytic workloads simultaneously on a single database -- a capability SAP is expected to start beta testing by the end of this year. It's a move that will put SAP into direct competition with Oracle, IBM, and Microsoft in the database market and that some equity analysts have criticized as straying from SAP's apps focus.
Faster querying is not exactly a business breakthrough, but Purba says converged infrastructure will deliver big savings. "Being a financial institution we're going to be very conservative and prove it in a non-mission-critical area first, but it would save us a lot of money on data-extraction and infrastructure," Purba said. A combined transactional and analytic deployment would eliminate four enterprise-class servers, plus layers of software, storage devices, and associated administrative labor at Home Trust, he said. "That could mean millions of dollars--enough that you would see it in the financial statements," Purba added.
Plenty of SAP mobility customers were available for interviews on Monday, including printer maker Lexmark, watch and accessory firm Fossil, and Indian manufacturer and distributor Asian Paints. SAP also announced new apps for travel-expense management, mobile e-learning, and health-and-safety reporting. And SAP announced a partnership with Amazon whereby the SAP Afaria mobile device management platform will be offered on the Amazon Web Services (AWS) Marketplace.
By delivering Afaria on AWS, SAP hopes it can make it easier and cheaper for companies to deploy mobile device management, which more companies realize they need to handle the growing bring-your-own-device (BYOD) trend. Companies will be able to provision instances of Afaria 7.0 directly from the AWS Marketplace within minutes, according to SAP. Afaria offers device security access controls, remote wipe (so data can be deleted from lost or stolen devices), and application management capabilities (so specific applications can be provisioned or banned for use by specific users). SAP is also filling out its portfolio with the still-pending acquisition of Syclo, a firm with experience delivering business-to-consumer mobile applications.
Summing up a mobile portfolio that includes Afaria for device management, Sybase and Syclo assets for developing custom enterprise and consumer mobile apps, SAP's own portfolio of ready-made mobile apps, and the Sybase 365 messaging platform, executive Sanjay Poonen, SAP's Global Solutions president, declared that the vendor has arrived as a leader in the mobile space, dismissing even fairly well established startups as below the radar. "If you think of the other vendors out there -- MobileIron, Airwatch, Antenna, Kony, Syniverse, and mFoundry -- most CIO's haven't heard of any of them, so we think we are two to three years ahead of our biggest competitors," Poonen told InformationWeek.
SAP does have a stronger position in mobile than it has in the database market, where Oracle, IBM, and Microsoft present formidable competition and SAP is just getting started. As for cloud applications, Snabe and Dalgaard will stake out SAP/SuccessFactors' position as no. 2 in the cloud software market here Tuesday, and we should hear their strategy for overtaking Salesforce.com. On all three fronts, there's much ground to cover ahead.
The Enterprise 2.0 Conference brings together industry thought leaders to explore the latest innovations in enterprise social software, analytics, and big data tools and technologies. Learn how your business can harness these tools to improve internal business processes and create operational efficiencies. It happens in Boston, June 18-21. Register today!