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12/14/2011
02:26 AM
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SAP: We'll Be No. 2 Database Player By 2015

At SAP Influencer Summit in Boston, SAP unveils plans for cloud hiring spree and Hana-led database push. Can it push by IBM, Microsoft, and Teradata in just 3 years?

You can't fault SAP for lack of ambition. Just days after announcing its hoped-for $3.4 billion acquisition of SuccessFactors, SAP revealed an aggressive new cloud-apps sales approach, and boldly predicted that it would become the number-two database vendor by 2015.

It's all part of a company goal to be the no. 1 or no. 2 player in every market that it serves. That mission, articulated at this week's SAP Influencer Summit in Boston, guides a new go-to-market strategy that led to the creation of a dedicated cloud sales team.

Where SAP salespeople previously sold all products, the new team will focus exclusively on cloud apps such as Business ByDesign, Sales OnDemand, and Sourcing OnDemand. What's more, the team will grow by more than fivefold, with as many as 500 new hires in 2012, according to Peter Lorenz, executive vice president of SAP OnDemand Solutions.

"We are very serious about on-demand, so we want to make sure we have people who are only measured by their success in the cloud," Lorenz told InformationWeek.

[ Want more on SAP's plan to break into the social sphere? Read SAP Tries To Leapfrog Salesforce.com On Social Analysis. ]

SAP also underscored its seriousness about the database market at this week's event, particularly its Hana in-memory database technology. Hana was introduced late last year in the form of an analytical appliance, a product that has since racked up $100 million in sales. But SAP is now promoting a wider role for Hana as a replacement for the relational databases running SAP BW data warehouses. SAP says it will eventually be able to run its entire Business Suite on Hana. But the technology must first be recognized as a mission-critical database.

"Hana is a full, ACID-compliant database, and not just a cache or accelerator," SAP CTO and Executive Board Member Vishal Sikka told InformationWeek, apparently weary of assertions to the contrary. "All the operations happen in memory, but every transaction is committed, stored, and persisted."

Appearing via videocast at this week's event, Sikka detailed Hana advantages including advanced compression and the ability to eliminate ETL, stored procedures, materialized views, and OLAP cubes while delivering sub-second performance. In the BW database role, Hana is routinely delivering 1,000 times faster performance than conventional relational databases, he said, while requiring lower-cost hardware investments.

Many customers just don't think of SAP as a database vendor. Perhaps that's why Steve Lucas, global general manager and senior executive, business analytics and technology, made the bold claim here (to the skepticism of many) that SAP would move into the number-two spot in the $20 billion database market by 2015. That total would include SAP's Sybase unit and it's ASE and Sybase IQ databases. But SAP would still have to surpass the current no. 2, no. 3 and no. 4 players, IBM, Microsoft, and Teradata, respectively, within just three years.

"It's a great big, audacious goal, but we want to aim high, and we think we can start in the data warehouse market," clarified Sanjay Poonen, president, SAP Global Solutions and Go-to-Market, in an interview with InformationWeek. Poonen, who is Lucas' boss, insisted SAP would continue leave the choice of databases up to its customers. But the company is clearly counting on selling Hana, as well as Sybase ASE and Sybase IQ, into its massive 176,000-strong customer base.

Sales to existing customers are also at the core of SAP's plans for cloud applications. SAP estimates that only about 15% of its customers have embraced cloud-delivered applications (whether from SAP or a competitor), so there's vast potential for hybrid deployments mixing on-premises software with cloud based apps.

SAP's boldest move to catch up in the cloud is its planned $3.4 billion acquisition of SuccessFactors. Under the terms of that deal, which is expected to close early next year, SuccessFactors will run independently as a subsidiary of SAP (following the approach used in the Sybase acquisition.) CEO Lars Dalgaard will continue to run SuccessFactors while also leading SAP's overall cloud strategy as a member of SAP's Executive Board.

With revenue of $332 million expected this year, SuccessFactors is far smaller than Salesforce.com, which is on track to surpass $2.2 billion in its current fiscal year. It may be a distant no. 2 in terms of revenue, but with 3,500 customers and 15 million users, SuccessFactors is the largest enterprise-cloud-apps vendor in terms of number of subscribed seats.

As it stands now, SAP won't be nipping at Salesforce.com's heels any time soon. And it has a long way to go to surpass Microsoft and IBM in the database market. But at the very least, competitors in both markets are surely taking SAP seriously.

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Guest,
User Rank: Apprentice
12/15/2011 | 8:52:20 PM
re: SAP: We'll Be No. 2 Database Player By 2015
Yes, these cloud/SaaS applications can be a hassle to integrate with on-premise applications. I wonder if SAP will integrate SF into NetWeaver.

This is the best option, IMO. Cast Iron, now part of WebSphere, is an ESB is designed to integrated "cloud" applications (hooks built in for SF, SFDC, Workday, etc) with other open API applications, like SAP HCM. The orchestrations are really slick. It is a little transaction volume sensitive, you can choke it, but it shouldn't be an issue if you are just running a point to point between SF and SAP.

http://drupal1.castiron.com/in...
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Guest,
User Rank: Apprentice
12/15/2011 | 8:27:05 PM
re: SAP: We'll Be No. 2 Database Player By 2015
I hear you... there are definitely scenarios where extremely fast read/writes will be beneficial, but they are pretty rare. For the average SAP user, that is running say AR, AP, GL, PP, MM, HR, SCM, what does improving the response time from 2 seconds to .2 seconds do for them?... not much. SAP tends to be back-office applications where response time is not that critical, not front-office applications like store fronts.... It would definitely be cool from a technology perspective, but I don't understand the ROI.

This will also introduce a whole new layer of complexity unless you want to make HANA your master database to replace Oracle/DB2 for every application, not just ERP.... If you use HANA for SAP, you will need some sort of costly MDM solution to aggregate and synchronize all of the tables for other applications that use, for instance, your master customer tables.... I think in-memory, for the vast majority of users, is still a solution in search of a problem. Particularly when you are talking about using in-memory for OLTP (several TBs of data) as opposed to say OLAP (several GB of data). I wish SAP would have just stuck with DB2 as their preferred DB and Oracle if users want it. This is going to get messy.
The Alchemist
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The Alchemist,
User Rank: Apprentice
12/15/2011 | 9:07:18 AM
re: SAP: We'll Be No. 2 Database Player By 2015
Well, an in-memory database in itself would not justify the big bucks. But when you start digging deeper into the potential for applications that run on current RDMS - thats when the value of in-memory databases begin to emerge. Take for example, if its possible to crunch huge amount of backend data in transactional databases and return the result at sub-second speeds, think of what can be achieved. An actual example would be to analyze the profile of an online shopper, credit history, demographic information, social trends via newsfeeds etc. (all huge amount of data) and based on this info, return a dynamically calculated discount for the online shopper. Thats where the value of in-memory databases comes in. SAP's vision is to have eventually its ERP running on the in-memory database (HANA) and now you should picture all those time consuming transactions working extremely fast. You can even imagine how his could affect the supply chains, planning simulations etc ... which traditionally involve huge data crunching.
The Alchemist
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The Alchemist,
User Rank: Apprentice
12/15/2011 | 9:06:51 AM
re: SAP: We'll Be No. 2 Database Player By 2015
It would be good to know the scenarios where on premise HCM can work with cloud based SuccessFactors.
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Guest,
User Rank: Apprentice
12/15/2011 | 8:19:47 AM
re: SAP: We'll Be No. 2 Database Player By 2015
Hmmm, it looks like SAP is attempting to follow Oracle and expand their stack. This will be very interesting for SAP users that run on Oracle or DB2 today.

HANA is an in-memory database. In-memory databases tend to run... in-memory. I can see running in-memory as an accelerator or possibly for BI, if for some reason users need their reports in sub-second speeds (I am not really sure what that does for you), but why would you want to pay the millions of hardware dollars it would cost to run an entire transactional database in-memory? Disk is cheap, flash is expensive.
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