HANA puts SAP at risk of being a modern tech vendor with aging business apps

Constellation Research claims SAP needs create a vision for the in-memory platform

By Derek du Preez, Computerworld UK |  Software, HANA, in-memory database

SAP's in-memory platform HANA puts the software giant at risk of becoming a modern technology vendor with aging business applications, where it needs to 'create a vision' of how a 21st century enterprise will operate, aided by in-memory technology.

This is the view of Holger Mueller, vice president and principal analyst at Constellation Research, who has released a report called 'Behind the ROI of Deploying SAP HANA'.

SAP released HANA over two years ago as an in-memory database, but has since incorporated analytics and transactions into the platform, enabling businesses to achieve near real-time results. SAP is pinning much of its future success on HANA, as it has outlined plans to move almost all of its offerings, including its software-as-a-service products, onto the in-memory platform.

However, despite having a lead on other vendors in the in-memory market, Constellation Research's Mueller warns that SAP shouldn't be too arrogant about dominating the space in the future.

"SAP has done a good job describing HANA from a technical point of view but still lacks concrete business value propositions. In fact, some complex concepts could benefit from some more thought cycles," reads the report.

"But what will make HANA a success? SAP must show how the return on investment (ROI) of this new technology will transform business."

Mueller's report identifies that when HANA was released, new hardware was considered to be the main cost as it requires the best kit running on an Intel platform, including the best processors, fastest components and highest power usage efficiency (PUE) devices.

However, through a non-disclosure agreement with SAP, Constellation Research has determined that the cost of the new hardware is significantly lower than the expense of hardware that is required to support the same footprint on a conventional SAP hardware landscape.

Mueller writes: "The cost savings is quite significant and a pleasant surprise. In fact, the move from a hardware perspective is a no brainer." Although this all depends on what stage of writedown the hardware is in.

Also, the report indicates that from a total cost of ownership perspective, moving an SAP system to HANA is not a new implementation, but more of an optimisation exercise. Though an organisation may need to migrate the data, once this is complete, the SAP systems will just run.

However, Mueller notes that SAP is "masking the complexity" of a HANA implementation, as up until this point it seems that all live customers have worked very, very closely with SAP on the projects. He writes: "This is an area that SAP must address in terms of training, documentation and a more stable product that can be successfully implemented without handholding by development."

SAP's biggest challenge, according to Constellation Research, is describing HANA's business value. The report states: "Despite the anticipated lower costs on the hardware, implementation and maintenance sides, customers will want to see the tangible, quantifiable business benefits in the overall ROI picture of HANA.

"Faster running reports will not be enough to justify the migration to HANA. A few business functions running faster will still be a stretch and only justify the investment under favourable circumstances.

"SAP needs to create new applications, re-think how a 21st century enterprise operates on in-memory technology, make the associated business benefits tangible and evangelize those benefits among the market leaders and fast followers."

Mueller claims that SAP needs to be careful not to declare victory too early in the war of database adoption for SAP products and that the risk for the software company is significant if it doesn't fill this 'HANA vision' void.

However, Constellation Research believes that this lack of vision creates an opportunity for partners to create clever applications for HANA.

"The good news - the lack of thought leadership on SAP's behalf on the next generation application side - drives opportunities for partners to create higher business opportunities with applications on top of HANA," says Mueller.

"Partners seeing a future in the SAP ecosystem should not miss the opportunity to create a bigger piece of revenue (and different piece) than the traditional services revenue."

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Originally published on Computerworld UK |  Click here to read the original story.
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