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SAP Chairman Hasso Plattner: Exclusive Q&A

Hasso Plattner, SAP's Hana visionary, discusses customer ERP adoption, cloud deployment, and Oracle's alternative.

IW: Does mixing the cloud-deployment decision with the Hana move complicate matters?

Plattner: No, it simplifies and accelerates the move. Even if it's only for the deployment phase, it's clearly the superior platform. If companies are hesitating and don't want to make the decision, cloud or on-premises, we suggest to them, "let's do the project on our computers in the cloud. Once the system is ready, we can discuss where to do the production deployment, whether that's cloud or on-premises."

IW: That's where the Hana Enterprise Cloud is different than other clouds in that it's a private, hosted cloud, not a multi-tenant service. Does that make larger customers more comfortable with cloud?

[Want more on real-world deployments? Read 6 SAP Hana Customers Share Early Lessons.]

Plattner: I don't understand why people are hung up on this multi-tenant thing. We do multi-tenancy for Ariba. Do you think multi-tenancy is less safe? Shouldn't Ariba be safe?

IW: Is that an argument to do everything in a multi-tenant environment?

Plattner: Multi-tenancy is good when you have many relatively small communities doing similar things. Ariba is one example. Talent management is one. Salesforce automation is one. Salesforce automation for a company with 10,000 salespeople is a [case for] a separate system. Any of the larger ERP system are dedicated -- that's what I call it instead of "hosted" -- because they have to be standard systems. That have to be much more standardized, otherwise we do not get economies of scale.

Multi-tenancy is a less-important part of the cloud business. The important part of the cloud business is to offer rental. If people think dedicated systems are safer, fine, it is a safer environment. We don't share hardware between an Exxon and a British Petroleum. The big change is that the software can be rented. In the early days of SAP, long before we became public, we had rental software. In the end you make more money.

The most important thing in the cloud is that the manufacturer of the applications can provide the service of the application at any time of the day from any location, permanently. That means we can permanently improve and update the service. This is huge. Our simplified systems enable us to add to or change the system constantly, not by replacing but by putting something in place in parallel.       

SAP Chairman Hasso Plattner, right, and SAP Executive Board Member Bernd Leukert meet with press and analysts at Sapphire 2014.
SAP Chairman Hasso Plattner, right, and SAP Executive Board Member Bernd Leukert meet with press and analysts at Sapphire 2014.

IW: Simple Finance is the first "simplified system," but you've announced that many more will follow. How should we think about these simplified offerings, because they're not really "new" applications?

Plattner: It's a component -- a piece of the application that handles certain functionality. These components are linked together by the [Hana] platform. The next might be, say, 50 new Fiori apps for certain functionality. The customer can traverse between the current system and the new system, and when the users are ready, they can switch over. They don't have to switch over on a certain day determined by IT.

IW: Do customers have to worry about losing customizations from their current systems?

Plattner: We carry everything the customer has deployed on [SAP Business Suite] forward. Just looking at accounts receivables within SAP, we have 44 different layouts in our shared services center. Our users have defined them. We cannot ask customers to redo such customizations only because we want to move them forward to Simplified Finance. Their old transactions work on the simplified data model.  That's the first transition we did. The second transition is that we've put in a new application and a new accounts receivable line-item display into the system that carry forward the customizations of existing applications. So when customers go to the new applications, they will still see their layouts and will not lose their customized views.

IW: And yet Simple Finance is described as introducing new user interfaces and stripping out old code. Doesn't that introduce change?

Plattner: This is something SAP handles and it's non-disruptive to the end user. If users cannot adapt to new user interfaces within two-and-a-half hours, then we're not doing it. Any new interfaces introduced have to be intuitive... Since the system is so much faster, the learning curve is faster. John Deere planned to have 14 work days for engineers to use their [Hana-based predictive maintenance] system. They cancelled the education after two days because the engineers said there's nothing more to learn; we know the system. Our brain does not work well when the partner we have a dialogue with is slower than we are. If something is extremely fast, you can learn to operate the system on the fly.

You can use distributed databases without putting your company's crown jewels at risk. Here's how. Also in the Data Scatter issue of InformationWeek: A wild-card team member with a different skill set can help provide an outside perspective that might turn big data into business innovation. (Free registration required.)

Doug Henschen is Executive Editor of InformationWeek, where he covers the intersection of enterprise applications with information management, business intelligence, big data and analytics. He previously served as editor in chief of Intelligent Enterprise, editor in chief of ... View Full Bio

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D. Henschen
D. Henschen,
User Rank: Author
6/9/2014 | 5:30:28 PM
Re: I don't get Hasso's point on "standardized systems" and "economies of scale"
It so happens analytical apps ARE the lowest-risk way to deploy Hana. It's read-only, and you're not mucking about with mission-critical applications. The largest Business Suite (ERP) on Hana customer I've seen (other than SAP itself) is Kaeser Kompressoren, a global compressor manufacturer based in Germany. This company has 5,000 employees -- so midsizish. The thing is, they've done the business warehouse and CRM deployment, but the ERP side of the suite has yet to come. Those deployments were delayed by the availability of preconfigured hardware from HP, but the supplier's Converged System 900 for Hana was just released at Sapphire.

The bottom line here is that big ERP deployments are rare -- I'm speculating they're limited to SAP itself. But Plattner insists in this interview that the big companies are preparing.

User Rank: Author
6/9/2014 | 4:44:39 PM
Re: I don't get Hasso's point on "standardized systems" and "economies of scale"
The Deere example is interesting -- and Plattner's advice to go for the use case with the biggest payday, not the simplest or lowest risk option. With cloud infrastructure, for example, the conventional wisdom is to try it with something low risk, like a sofware testing effort. But with Hana the battle is over whether this new platform is worth it, so the search is for some use case where the speed justifies added risk, effort, expense. 
Charlie Babcock
Charlie Babcock,
User Rank: Author
6/6/2014 | 7:48:08 PM
Hana, a 'dedicated cloud' or hosted service?
One way to interpret Plattner's remarks is that a big user of Hanna can get economies of scale on a dedicated system by using most or all of the server or server cluster. I would hastily add, in Hasso's opinion. Hana on hardware dedicated to a single customer would still be operating in a "cloud-like" fashion if Hanna services could be accessed through an API by the customer from the outside, be started and stopped by the customer and possibly modified or customized by the customer. This would be operating in a private cloud-like fashion, with the cloud hardware and software off premises -- in a SAP data center. But it remains unclear to me also that that's what he's actually saying. It sounds more like a hosted service that SAP starts for you, manages and levies a predictable bill on a regular basis. That is, it's not a bill strictly based on the amount of use, and the system isn't under the customer's programmatic control. In that case, the use of the term "cloud" is either shaky or depending on your level of passion about such things, wrong.
D. Henschen
D. Henschen,
User Rank: Author
6/6/2014 | 11:45:05 AM
I don't get Hasso's point on "standardized systems" and "economies of scale"
Reporters get only so much time with top execs, so I couldn't follow up on Plattner's point on "standardized systems" and "economies of scale." This sounds like an arguement for multi-tenant applications, but he was talking about the need for "dedicated" (a.k.a., hosted systems) for each customer. How do you get economies of scale creating individual deployments for each customer? I'll try to get SAP to comment here.
D. Henschen
D. Henschen,
User Rank: Author
6/6/2014 | 11:40:24 AM
I think a lot of veteran SAP customers greeted the "simplification" message with skepticism, but many are hopeful it will bring simplified pricing, simplified contracts and simplified answers and policies from SAP. As for simplified technology? I think few believe that's something that can happen overnight.
User Rank: Author
6/6/2014 | 11:03:03 AM
Interesting that he brings up MOOCs as way to train people up on the new skills. That certainly could speed up the training of the talent pool. What was the overall customer mood at the conference, Doug?
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