HANA, HANA, HANA! Can SAP prove the value to companies both large and small?

All the talk at SAPTechEd this week has been about HANA, SAP’s new in-memory computing engine. While there were plenty of “techies” at the event this week, you don’t have to be too much of a technologist to understand that processing data that is stored in memory is going to be a lot faster than processing it from disk. And results from early adopters have been more than impressive. Examples include Yodobashi who took the process of running incentive payments from 3 days down to 2 seconds. Or Nong-fu Spring who ran the same script in HANA and in an Oracle data mart and found HANA to be 200 times faster. In fact these results are so impressive, one SAP customer said to me, “It sounds too good to be true.”

I suspect many other SAP customers may have similar sentiments. This all sounds great but how does my company benefit? Indeed my colleague Laurie McCabe of the SMB Group summed it up with a question to Sanjay Poonen, President, Global Solutions and Go-to-Market. Laurie asked, “HANA, HANA, HANA. That’s all we’ve heard. Can you bring it down to earth for us?”

Sanjay did. Think of HANA as a platform that will power all that is SAP. You know that little sticker on your laptop that says “Intel Inside?” Mine says “Intel Pentium Dual-Core InsideTM”. I remember when Pentium processors first came out, eclipsing the performance of their predecessors. Today we just take Pentium processors for granted. And if you are like me, you probably don’t know much more about what’s inside, but you’ve come to expect a high level of performance from a brand that you know and trust. While making HANA an industry standard is an unrealistic goal, making it an SAP standard is not and SAP expects to boost performance in a major, game-changing way.

You won’t see SAP using the phrase “HANA Inside” (note the trademark symbol on my sticker and yours). But you will see it porting all its enterprise applications to this platform. Although with such a broad product portfolio, this is a huge task.  All on demand (SaaS) products including Business ByDesign and other “line of business” on demand products (e.g. Sales On Demand) will be powered by HANA. For Business Suite customers, it will become an option. For SAP Business One (SAP’s ERP solution running in over 30,000 small companies), it will be embedded. There won’t be any decision to be made and there won’t be a price tag attached. It will just come with HANA inside.

For existing Business One customers, it will be delivered through the upgrade/release cycle. As Sanjay put it, “It will be like taking your car to the dealership and driving away with a larger engine.” I suppose this analogy works for the Business Suite as well, but while that “larger engine” for Business One would be covered under an extended warranty (maintenance), there would be a price tag associated with it to power the Business Suite. And I would expect the engine embedded in Business One might not unleash the full power of the engine. That’s OK because I suspect many Business One and On Demand customers will simply benefit from improved speed and performance and never look beyond to take advantage of the full power of HANA. For that you need vision and a certain degree of creativity to see the potential. Indeed we’ve only seen a few glimpses of these so far.

Today HANA is only available in appliance form on hardware from several vendors and SAP still has a long way to go in terms of making its enterprise applications available on the platform. Even though we’ve been hearing about HANA now for a couple of years, it represents a major technology transformation and SAP is still in early stages of innovation.

Early projects have focused on analytics. This might be viewed as the low hanging fruit of in-memory computing, bringing speed and agility to big data. But while the power of in-memory computing might be intuitively obvious to IT, to be successful, it cannot be viewed just as a new and better toy for IT. IT needs to sell the value to the budget holders and SAP needs to win the hearts and minds (and wallets) of line of business executives.

SAP is open to performing proof of concept (POC) projects today, and the cost of the project can be applied against the purchase of HANA and a more extensive project. But also several purpose built applications represent a first step in proving that value. In fact two new applications were also released this week:

  • SAP Smart Meter Analytics: mines smart meter data to analyze customer energy usage patterns to improve system load forecasting
  • SAP CO-PA Accelerator: planned functionality includes real-time profitability reporting on large-scale data volumes , instant, on-the-fly analysis of profitability data at any level of granularity, aggregation and dimension and cost allocations

These join previously released Strategic Workforce Planning that supports analysis of the effect of changes to a company’s employee base.

These are all great examples that target specific use cases. But SAP wants the use case to be pervasive.  And in order to achieve that, the platform needs to make applications better and faster, easier to use at a lower total cost of ownership. These improvements will spur new ideas of how to take full advantage of the technology. That’s a tall order. So far the dramatic results of early projects have created a certain mystique, or what Sanjay calls “the halo effect” and with that comes differentiation. He welcomes the sentiment that it is “too good to be true.” Give him a chance and he’s anxious to prove it is not.

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2 Responses to HANA, HANA, HANA! Can SAP prove the value to companies both large and small?

  1. Pingback: Key Themes from SAP TechEd 2011–How Do They Relate to SMBs? « Laurie McCabe's Blog

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