SAP: Talking and Walking the Cloud

During SAPs Database and Technology summit in Barcelona SAP reinforced its HANA commitment once more together with a selection of its tier one partners.  SAP’s first HANA (originally short for Hasso’s New Architecture later baptized as High Performance Analytic  Appliance) announcement as well as it first release dates back to 2010 and was labeled an application architecture for real time analytics and aggregation. When a Walldorf application giant is making a move  into the database market it raises eyebrows;  especially from database leader Oracle. Not only began  SAP to compete in the database market it also branded its HANA database as an in-memory database implying that for real time analytics and transaction processing you need an in-memory tool.  They made Oracle look like the king of batch processing. In all honesty, for a German application vendor these are bold moves combined with unprecedented marketing tactics. But can they live up to their HANA promise?

Since its release in November 2010 the HANA database product has been further developed and turned into a complete database and application platform. For SAP the HANA database will become its technological backbone that will be leveraged to drive all its products and partner solutions going forward.

SAP is betting heavily on HANA. It has to. As the market for its traditional enterprise ERP software has run its course it has to double its efforts to become an important SMB player. To date SAP’s SMB results are mixed, some country office are doing fine, some don’t. The more large enterprises there are in a country the less commitment there is from local SAP organizations to focus on SMB. Something to do with the low hanging fruit…. But SAP corporate is committed to SMB and has also mapped out its own SMB segment: the Progressive SMB. Progressive SMBs are growth and technology driven companies that one day may become a valued SAP customer. To become the leading SMB business application vendor SAP wants to capitalize on what they perceive as the three major trends that are defining today’s market: cloud, mobile and Big Data. During the summit it was all about the cloud.

SAP has invested a lot of its resources into making HANA available in the cloud. HEC (HANA’s Enterprise Cloud) was recently launched to show SAP’s commitment to HANA as well as to the cloud. Their SMB products (Business All-in-One, Business One, Business Suite and Business by Design) are now available in the cloud.

Another cloud investment area is SAP’s Lumira development. Lumira may be better known under its former name of Visual Intelligence. Recently the Lumira Cloud was released:  SAP’s version of a cloudbased selfservice data visualization offering. It even supports hardcore Excel users.

SAP really wants to be a cloud company if not the cloud company. It regards this as a prerequisite  to succeed in the SMB market. It also has adopted a more focused marketing strategy that is geared towards branding SAP as a cloud company. It was interesting to hear not one single SAP executive talk about ERP, SCM or CRM. Giving their products a more sexy name (HANA, Lumira, Fiori) instead of R3 or All-in-One, illustrates a changing and more savvy marketing approach.

Summarizing: SAP is not only talking the cloud but also walking the cloud. It has devised a cloud strategy with HANA at its core and is fully executing on it. Cloud enabled products are rolling out, its HANA platform is becoming the de facto core technology for all products, marketing is sharpened and SMB commitment is communicated on every occasion. There is no doubt that product and service wise SAP can live up to its SMB commitment. But will its (prospect)partners buy it? SAP wants to have partners that sell. It is here you hear smaller partners grumble that they don’t get the support they need, that it is hard to communicate with SAP or that SAP wants to ‘own’ the business relation with their client. So, while SAP is marching forward, creating a healthy partner ecosystem may need some further tuning.