SAP Counting On Customers To Go All-In On Cloud Migration With HANA

Scot Peterson,
SAP

ANALYSIS: SAP is counting on its HANA in-memory database to help retain established customers

The tale of the large, established enterprise IT vendor in the 21st century is now quite familiar. Enterprise resource planning giant SAP made sure it stuck to the story line at its Sapphire user group conference here this week.

Digital transformation? Check. Modernizing data centers and applications? Check. Having the cloud your way? Check. If you substitute the marketing tag line “S/4HANA is the digital core of your enterprise” for “the year of all-flash storage,” SAP could be EMC.

SAP, EMC and the other usual suspects are all saying the same things. They are in the fight for their lives to win and keep enterprise IT customers. That’s because they are scrambling for a market that is shrinking and being disrupted by cloud computing.

IBMSAP’s effort in the cloud, the HANA Cloud Platform (HCP), “is the key to the company’s future—it is that simple,” said SAP Enterprise Platform President Steve Lucas. He’s right, because the company is all-in on the HANA in-memory platform, S/4HANA ERP applications and HCP. There is no turning back for SAP or its customers.

As much as SAP and the other established vendors want new customers, the battle is much more about retaining current ones. That is evident in Oracle’s cloud strategy. The good news for SAP is its customers don’t always have a viable choice of moving to another vendor or provider. ERP is not something you “lift and shift” to the cloud. Customers are “stuck” unless SAP really screws up.

Keeping Up With the Amazons

That said, cloud-centric challengers Salesforce and Workday are predicting the inevitable demise of SAP. Salesforce CEO Marc Benioff this week said Oracle and SAP are doing poorly in the cloud because “they just have not been able to make that transformation that we’ve made.”

That’s not a fair comparison, since Salesforce was born as software as a service and SAP was born in the mainframe. In many organizations, SAP is entrenched and highly customized. In reality, SAP is making a bigger transformation than Salesforce ever will and has to approach the cloud differently.

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SAP’s strategy actually gives it a big advantage as it works to convert itself and its customers to the cloud. It starts with the data in the HANA in-memory database and builds out from there. The new “spring edition” of the HANA Cloud Platform is the kernel of SAP’s modernization efforts, building on top of open platforms Cloud Foundry and eventually OpenStack. Access to the ERP applications is enabled by the new SAP API Business Hub.

SAP’s other big advantage is that so many of the most important businesses and systems already run on SAP, giving it the first crack at the cloud business of those customers. HANA also has become important enough in the ongoing sustainability of its customers that rather than keep up with Amazon, AWS has to keep up with SAP. This week, AWS announced a new instance type named “X1,” which was developed to meet the requirements of running HANA in the cloud.

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Originally published on eWeek.