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6/4/2014
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SAP's McDermott: Say Goodbye To 'Too Complex'

SAP CEO Bill McDermott promises to help customers simplify their technology landscapes using SAP Hana Enterprise Cloud. But is this the kind of cloud that most companies seek?

required to migrate to the new workflows and interfaces? How significant will promised performance gains or net-new functionality be to the business? Will these benefits offset new costs for cloud hosting and the switch to Hana?

Not to complicate matters, but SAP has a separate cloud called the Hana Cloud Platform. This is SAP's platform-as-a-service (think SAP's version of Force.com) where you can rent infrastructure, including Hana database services, and also subscribe to true, multitenant SaaS applications from SAP and its partners. The plan is to move all of SAP's SaaS offerings, including Ariba, FieldGlass, Hybris, and SuccessFactors, to this platform, but that will happen over time starting with the components that will most benefit from Hana performance. Indeed, SAP is masking a lot of behind-the-scenes complexity with its clouds.

Sizing up the cloud competition ahead, financial securities analyst Jason Maynard had a rather brutal assessment of SAP's prospects after Tuesday's announcements. "Simply refactoring code onto the Hana database doesn't mean [SAP's] systems are true software-as-a-service," he wrote in a research note Tuesday. "We think SAP is paying the price for the company's inability to get behind the shift to the cloud in the last decade in a tech industry that's clearly turning to the cloud ... While SAP has a great franchise and very sticky installed base, it is clear to us they are late to the cloud and missed the architectural shift."

As for that "sticky" installed base, the path to the cloud isn't black and white. And despite all the cloud hype, ERP deployments, particularly large ERP deployments, won't move to (or be replaced in) the cloud easily. McDermott said SAP's strategy is to give customers choices and flexibility. There's staying on premises, moving to the SAP Hana Enterprise Cloud private option, or moving to the Hana Cloud Platform public option. A hybrid combination of all three will probably be the reality for existing customers.

As for would-be new customers, the momentum of new deals seems to have swung in favor of cloud options like NetSuite and Workday. Their stories are simple: it's ERP built for and delivered in the cloud.

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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sjajodia
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sjajodia,
User Rank: Apprentice
6/9/2014 | 3:20:05 PM
Re: Simple is in
Brian,


SAP software is based on configuration through table settings. More flexibility means more table settings that have to be understood and implemented. This raises the complexity. Another reason for complexity is scalability. Many of SAP systems follow a distributed architecture for scalability so a transaction processing system may be separate from the analytics system and a portal may be a third system to handle user loads. With HANA, this scalability can be achieved in a single system. Configuration flexibility is on the other hand more difficult to address as it is perceived as a big plus by many customers.
anon1030790470
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anon1030790470,
User Rank: Apprentice
6/5/2014 | 9:44:46 PM
Re: My take on... (former SAP Customers' Ambassador worldwide, working on SAP Public Trial)
Do tell on please!  What exactly is your gripe?!
anon1030790470
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anon1030790470,
User Rank: Apprentice
6/5/2014 | 9:43:34 PM
Re: SAP Hana Enterprise Cloud sounds like managed hosting
I think McDermott must be talking about SAP's BW on HANA, that is if he's not just a sales guy talking through his hat.  Suite on HANA gets much lower compression ratios, the sizing guide says to assume just 2x compression and you don't get the benefit of dropped indexes either (unlike BW).


A problem is that HANA is such a loose concept now that it's hard to know what SAP means, and I suspect that suits them. My assumption is that SAP on HANA in Cloud will be utilizing the full range of HANA technologies - Sybase ASE for Suite since runs on cheaper hardware to run and seems to have better transactional throughput than the HANA database; HANA database for BW with near real-time feeds from the transactional systems.  Possibly IQ for NLS if needed.  That's how I'd do it at least, to save a fortune on hardware.  Since it's in the cloud, the customer won't need to know about this behind the scenes complexity.


Doug, do you know if this assumption is correct, or are both BW and Suite truly hosted entirely on HANA database?
CarolineO304
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CarolineO304,
User Rank: Apprentice
6/5/2014 | 8:37:31 AM
My take on... (former SAP Customers' Ambassador worldwide, working on SAP Public Trial)
Bill, I am saying Goodbye to the business plan of SAP Corporate - corruption and criminal harassment... 

"I want a public trial, buddy. Until you end up behind bars; with Plattner in the same cell, can you picture it?" Excerpt from the Season 2 of SAP Criminal Minds at leoapotheker-mylife [dot] com.  

 

 
D. Henschen
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D. Henschen,
User Rank: Author
6/5/2014 | 8:36:33 AM
Re: SAP Hana Enterprise Cloud sounds like managed hosting
Charlie, SAP's Hana Enterprise Cloud platform is a managed-service, hosting environment on Hana. It's private cloud, so it's possible to carry forward your customizations. Where SaaS vendors get their economies of scale from providing a single service that users can configure, SAP says its economies are gained through Hana, which offers columnar compression and the elimination of separate infrastructure for transaction processing and analytical processing. That's the story and they're sticking to it. The example shared in the story is SAP's own deployment, and the claim that an 11-terabyte system previously required to run SAP's own ERP footprint became a 2-terabyte footprint with Hana. If true, that's a pretty significant gain in efficiency.
Brian.Dean
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Brian.Dean,
User Rank: Ninja
6/4/2014 | 11:18:08 PM
Re: Simple is in
I am wondering, what makes SAP's technology complex. It is because it deals with financial information and re-modeling a simpler technology from the ground up would just result in re-doing work while, gaining no efficiency -- much in the same way how banks are trapped with COBOL.
Laurianne
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Laurianne,
User Rank: Author
6/4/2014 | 5:19:46 PM
Re: SAP Hana Enterprise Cloud sounds like managed hosting
Excellent questions, Charlie. Let's get some clarity on that.
Charlie Babcock
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Charlie Babcock,
User Rank: Author
6/4/2014 | 3:10:13 PM
SAP Hana Enterprise Cloud sounds like managed hosting
If you can carry all your customizations into the SAP Hana Enterprise Cloud, that sounds like managed hosting to me. You get your own copy of the application running remotely, and your customizations somehow will appear in it, probably through a remote scan and upload. That's not software as a Service, and SaaS was the only term in the cloud lexicon that was a candidate to be used with this offering. There's nothing wrong with your own remote copy of Hana Enterprise Cloud. You just won't realize the efficiencies and savings of a multi-tenant SaaS architecture. Among other things, your copy has to run all the time; you won't be able to start and stop it at will. Or possibly I misunderstood something. Would SAP like to dispute that?
Alison_Diana
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Alison_Diana,
User Rank: Author
6/4/2014 | 10:45:55 AM
Re: Simple is in
Exactly, Doug! It's very easy to say a company's products are going to be simple, not quite that easy to make it real especially when those products have a reputation for being the polar opposite. While McDermott got points for publicly recognizing the widely known point that SAP's producs have been complex, he'd better have some compelling user stories to share 12 months from now.
D. Henschen
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D. Henschen,
User Rank: Author
6/4/2014 | 10:36:37 AM
Re: Simple is in
I spoke to a Uniliver exec -- a global SAP user -- and he said of McDermott's "simple" message, "that's brave coming from SAP... I'm going to use that in my discussions with SAP CRM execs." Uniliver has taken several years to consolidate more than a dozen ERP systems into four regional deployments. A project to implement new mobile sales apps, aided by Infosys, has taken 2 years. Make no mistake: SAP's technology is complex. That won't change quickly.
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