SAP Shakeup Puts Focus Where It Belongs - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Cloud // Software as a Service
Commentary
5/6/2014
09:46 AM
Doug Henschen
Doug Henschen
Commentary
Connect Directly
LinkedIn
Twitter
RSS
E-Mail
50%
50%

SAP Shakeup Puts Focus Where It Belongs

SAP just set its priorities straight. Here's why Vishal Sikka's departure shouldn't worry SAP customers.

Some SAP watchers are wringing their hands, worried that Vishal Sikka's surprise resignation, announced Sunday, spells trouble. I'm not one of them. Quite to the contrary, I think it signals a return to realism and appropriate priorities. Here's why.

For more than a few years now there has been tension within the ranks of SAP. The tension has been between chairman Hasso Plattner, his protégé, Vishal Sikka, and their loyalists, and those who had a broader focus and, in my view, a clearer sense of market realities. You'd hear snippets about this tension from employees and even from customers close to the company, and you'd see more detailed comments in response to articles.

As industry insider and analyst R "Ray" Wang of Constellation Research put it in Monday's report on Sikka's departure, the Plattner/Sikka camp favored "build versus buy" and "great platforms that would lead to great apps," and the other camp leaned toward "apps over platform and execution over innovation." It's a bit of an oversimplification, but think of one group as the Hana camp and the other as the apps and cloud camp.

[ SAP's co-CEO disagreed with this assessment. Read SAP Shakeup: Bill McDermott Speaks Out.]

No matter how much innovative work SAP might whip up as part of its platform, SAP is, fundamentally, an applications company. In that world, cloud computing has become the dynamic that all players must address. Hana might help that cause to a certain extent but, somewhere along the way these past four years, the promises and expectations heaped on Hana started getting out of hand.

Hana started out as an analytics accelerator and then became a full-fledged in-memory database management system (DBMS). Soon, transaction processing was added to the list of promises, and "radical simplification without disruption" became the rallying cry. Next, Hana evolved from being a DBMS into a platform, packing analytics, application server, and data-management components. As pressure mounted to respond to the cloud threat, Hana became the platform for all SAP software-as-a-service and managed services offerings.

Meanwhile, the rest of the technology world has been catching up with SAP's in-memory promises. Microsoft has released SQL Server 2014 with In-Memory OLTP and Oracle is promising its Oracle 12c In-Memory Option later this year. SAP still has points of differentiation, like the promise of radical simplification. But as we detailed in our March cover story, "In-Memory Databases: Do You Need The Speed?," we've seen scant evidence that companies have actually been able to eliminate separate layers of infrastructure for transaction processing and analytics. In fact, we haven't talked to any large companies -- save SAP itself -- that can point to large-scale Business Suite deployments on Hana.

SAP co-CEO Bill McDermott set the tone for SAP's new direction at a February investor conference.
SAP co-CEO Bill McDermott set the tone for SAP's new direction at a February investor conference.

Hana is great technology that has its place, leading with analytical uses. And it's not being abandoned by SAP by any stretch. But this week's shakeup represents a return to reason. Sikka's departure might be a bit of a shock, but the renewed emphasis on applications and the cloud was apparent back in February at an SAP investor conference in New York. That's where soon-to-be sole CEO Bill McDermott declared "cloud is where we are taking the company" and where Sikka was noticeably subdued.

"Vishal built [the Hana] plane and he actually got it airborne, and now he hands it off the pilots who will take it to the next step in the journey." That's the interpretation SAP spokesperson Jim Dever shared with me after Sunday's announcement. Not to diminish Sikka's contributions, but SAP can still draw on the formidable technical depth of chairman Plattner, who truly deserves credit as the mastermind behind Hana.

The challenge ahead for SAP will be stepping up its cloud game. Hana is there in the background as the "powered by Hana" platform on which SaaS apps and managed deployments will run. But techno babble about platforms is not why decision makers choose cloud providers. They choose them for their depth and breadth of capabilities and the degree to which they integrate with and complement on-premises applications that, at most large companies, aren't going anywhere any time soon.

The biggest danger for SAP in the short term is a story and momentum vacuum now that it (presumably) won't be going on and on about Hana at every turn. But that's easily fixed by the next strategic cloud acquisition or overdue next steps on more organic strides toward cloud delivery.

SAP has to respond more forcefully to the digital marketing imperative, for example (as have Salesforce.com and Oracle), if its CRM apps are to remain relevant. These and other initiatives weren't going to happen if SAP kept treating every problem like a nail and Hana as the universal hammer.

Can the trendy tech strategy of DevOps really bring peace between developers and IT operations -- and deliver faster, more reliable app creation and delivery? Also in the DevOps Challenge issue of InformationWeek: Execs charting digital business strategies can't afford to take Internet connectivity for granted.

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

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
D. Henschen
50%
50%
D. Henschen,
User Rank: Author
5/14/2014 | 11:55:14 AM
Re: To be fair, goal of HANA was always powering applications...
Timo,

 

I agree there was early talk of eventually taking on transaction processing and analytics, but application server, in-database analytics, big data strategy, etc. were all tacked on to the original vision. Everying started to be "powered by Hana," even when a conventional databse and batch processing would do. Speedy insights are only required when people are actually in a position to do something with them or about them in an equally speedy way. SAP is pushing ahead of the customer's ability to execute.  
D. Henschen
50%
50%
D. Henschen,
User Rank: Author
5/6/2014 | 1:02:51 PM
Re: Pivot back to apps will not be that easy
Vinnie,

Agreed on the transitions being too messy and public. Maybe the seeds of that lie in the Euro corporate structure with an Executive Board and Supervisory Board. Ray Wang tells me the CEO is really just the spokesperson for Board, not the all-powerful decider-in-chief.

As for the apps focus, I don't agree there has been "a decade" of neglect. Some neglect, yes, but the Business Suite has been worked over and many Fiori interfaces are in the works. Sikka pulled back on Business ByDesign work just last year -- no doubt to throw more resources at Hana. With money freed up for apps and acquisitions, I think things can get back to a more balanced approach.
D. Henschen
50%
50%
D. Henschen,
User Rank: Author
5/6/2014 | 10:54:21 AM
There's plenty of database and tech expertise still at SAP
Another reason I'm not too worried about Sikka's departure, he had lots of lieutenants, including many Sybase veterans, who can carry any Hana work forward. And maybe the ASE and IQ databases will get the credit they deserve as the engines handling the high-scale transactions and historical analysis instead of being hidden components within the "Hana" platform.

Maybe SAP does need smooth-talking technologist to keep the tech dweebs happy. Bernd Leukert will have to step up on that front. We're sure to hear a lot more than we have been hearing about all the work going on in Walldorf. And then there's Hasso Plattner, who's still slated to speak at Sapphire next month. I sincerely hope that the platform and in-memory hype will stay in balance. The Hana story has been told; let the customers decide if they want to use it. 
InformationWeek Is Getting an Upgrade!

Find out more about our plans to improve the look, functionality, and performance of the InformationWeek site in the coming months.

Commentary
Why IT Leaders Should Make Cloud Training a Top Priority
John Edwards, Technology Journalist & Author,  4/14/2021
Slideshows
10 Things Your Artificial Intelligence Initiative Needs to Succeed
Lisa Morgan, Freelance Writer,  4/20/2021
Commentary
Lessons I've Learned From My Career in Technology
Guest Commentary, Guest Commentary,  5/4/2021
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
Planning Your Digital Transformation Roadmap
Download this report to learn about the latest technologies and best practices or ensuring a successful transition from outdated business transformation tactics.
Slideshows
Flash Poll