Has SAP’s Relentless HANA Push Paid Off?

What This Article Covers

• A Brief History of SAP HANA
• What Has Been the Customer Buy-In on SAP HANA?
• In Defense of SAP HANA
• SAP HANA Competitors
• How SAP HANA Competitors Markets

Introduction

This article is about what SAP’s main focus on SAP HANA means for the marketplace and for the messaging that has come from SAP, and how this messaging has been interpreted and reacted to by customers.

A Brief History of SAP HANA

It is acknowledged that the push toward HANA originated by Hasso Plattner, the best known of the original founders of SAP. He has written three books on in-memory computing since 2011.

SAP HANA was accepted as the major marketing tent pole and has been the primary driver of SAP’s marketing and sales messaging at this time. This was a transition for SAP, as the prior tent pole was called Netweaver, which was for all intents and purposes, discarded when SAP HANA arrived on the scene. Four years after the fact it’s almost difficult to remember how dominant Netweaver was in SAP’s marketing messaging.

A tent pole is a term used by movie studios to describe the largest budgeted and highest grossing movies or television programs it produces. It “keeps the tent” or operation up. I have adopted the term here to mean the major marketing theme employed by any software vendor.

In analyzing the marketing tent poles used by SAP going back to the company’s origin, interesting things surface. SAP’s first tent pole was the integration of operations to finance in its ERP system. This was highly effective as it both resonated with customers and it also happened to be true.

What Has Been the Real Customer Buy-In on SAP HANA?

The marketing and sales investment into SAP HANA has been enormous. So what has been the client’s response to the big HANA push?

It ‘s hard to answer this question of SAP HANA’s success and adoption rate from the outside looking in because SAP marketing and those that write about SAP (who want HANA business) create the impression that a lot is happening with SAP HANA. Tracking SAP HANA sales provide an enlarged view because sales do not mean implementation success, and SAP stopped breaking out HANA sales as a separate item a while ago, which apparently reduces the visibility to sales. Some speculate this may have been to obscure SAP HANA’s real growth rate, but they did have a good reason or cover story for doing this. But I have now counted several ways in which SAP is providing a misleading view as to SAP HANA adoption. One way has been to count licenses that were given away to customers, who have no plan for implementing HANA — as “customers.”

From the inside of companies I see as a consultant, the picture looks much different. It turns out that even at this late date, more than four years after SAP HANA has been introduced, there are relatively few SAP HANA implementations.

Some of the reasons for this which are often discussed among the more educated SAP sales people that I work with. I won’t go into all of them because that would be another article, but here are three central reasons:

1. Price: As HANA is on the upper end regarding costs, and often comes to $1 million in just hardware costs alone (per application), the actual software is at the upper end of SAP’s offerings. HANA consultants are also at the very high end in cost (as well as being difficult to find). I would suggest that anyone investigating HANA’s costs simply take the hourly rate of a large consulting company HANA resource and multiply it by 160 hours per month, and this will build an appreciation for the sticker shock HANA customers face.
2. SAP’s Account “Headroom”: If SAP were a small portion of the spend of IT departments it would be one thing, but SAP already has such a sizable part of the IT spend of its customers that up-selling customers from their current position are a major challenge.
3. HANA’s Benefits Focus: SAP has developed all types of aspirational material on how to use in-memory computing and they employ very effective solution specialists to present this. However, HANA just does not address the primary pain points that SAP customers have. There is a very apparent misalignment between what SAP is promoting and what SAP customers are focused on. The fact is the biggest problems that the clients face are not the speed of processing of transactions or that business intelligence output does not run quickly enough. I would think anyone who works on SAP projects would know that there are more pressing issues that SAP customers face such as the following:

• Maintaining current systems accurately
• Improving the uptake of the system by users
• Configuring some of the existing functionality that is not working as desired
• Maintaining master data (Which so often leads to SAP systems being used less than optimally.)

Some these items were added to the video I created on the adoption of HANA by customers.

In Defense of SAP HANA

If a person from SAP, or who worked for a SAP consulting partner were to comment on this post, they would most likely say that there is a world of difference when HANA is added to SAP. That I am not “getting it,” perhaps that I lack vision, am a bad person, etc.. However, the issue is not whether I agree with it, as I don’t buy SAP software.

Rather the issue is whether customers agree with SAP on HANA. Up to this point, where SAP and their consulting partners have had more than enough time to present the case, customers have not agreed with SAP that HANA is something that is critical for them.

While some customers have purchased HANA, and most of these purchases are for a single application category; analytics, and un-coincidentally, HANA is primarily an analytics database.

SAP HANA Competitors

SAP spends lots of time discussing the benefits of HANA SAP. However, when the describe HANA SAP, they often tend to make it sound as if their SAP HANA competitors aren’t doing anything with their databases. However, that isn’t true.

In this article, I will describe some other vendors that compete in the same space.

…HANA is an analytics database heavily used on-premise for small sets of users, and, per its name, is not intended for planning (i.e., to allow users to make changes to plans). This leads to performance bottlenecks when modifying plans and viewing resulting calculations. Another side effect of HANA SAP is that horizontal scaling across servers and cores is not supported for planning use cases. No doubt it will take time for the newest of the CPM products to mature and stabilize, especially from a company unfamiliar with the cloud. There is no confirmation that SAP will take on the enormous effort to re-architect for multitenancy, the speed of planning changes, and horizontal scaling.
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..SAP Cloud for Planning, has had difficulties addressing large enterprise needs due to insufficient modeling capabilities. Even smaller companies have challenging modeling needs due to their industry-specific revenue modeling requirements, the use of driver based forecasting and “what-if” scenarios, consolidation rules, or their hyper-growth nature. Modeling flexibility is lacking, making room for spreadsheet proliferation.

Only Anaplan can scale for more complex models and large enterprises, three since Anaplan does not use off-the-shelf in-memory computing, but instead has a patented in-memory, Java-based planning engine. In particular, the patented Anaplan Hyperblock™ technology is optimized for planning and not merely analytics, unlike HANA SAP. What’s more, Anaplan’s unparalleled modeling flexibility makes it possible for Anaplan customers to scale horizontally across hardware without compromising speed, in contrast to off-the-shelf frameworks such as Apache Hadoop.

Checking With SAP HANA Competitors on HANA SAP

An important principle here is verification. SAP makes exaggerated claims on HANA SAP. But not only do SAP HANA competitors not agree with SAP’s assertions but computer science experts do not agree with SAP on many of its contentions regarding HANA SAP. Also, SAP has published scant benchmarking data versus SAP HANA competitors like Oracle.

How The Competition Markets

HANA is one of the SAP’s major marketing tent poles that it has used throughout its existence. I estimate that HANA is the largest marketing initiative ever undertaken by a company in enterprise software. However, any tent pole only has so much of a lifecycle. Either the concept is successful and is eventually adopted by competitors such that it is less of a differentiator, or it wears out its welcome and something else becomes the new emphasis point. To see examples of how differently the competition markets see this article.

Conclusion

It is now common to hear about “HANA fatigue.” For four years just about every SAP conference has been distinctly HANA flavored. One of my clients told me of her experience of at one SAP conference where the HANA pitch was so strong it took on as she described it a “cultish vibe.” That is a signal from the market to be aware of.

SAP can only keep talking about something for so long before either the audience accepts it or rejects it, and it is time to move on. That time is approaching for HANA. This is not to say that SAP won’t continue to improve HANA, reduce its price, and increase its implement-ability, but that it’s probably time for the marketing emphasis to change to a new topic.

References

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