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With all the recent hype about the HANA GA release and a series of excellent blogs about InMemory technology,  I wanted to take a quick look at the topic with a focus on the broader implications rather than a deep dive into the technology involved.

Fundamentals

I remember reading a critical blog (from 2010!) from Workday co- founder and co-CEO Aneel Bhusri when SAP announced its plans regarding InMemory Technology.

For Hasso’s benefit, I am happy to share with him that yes, in-memory database technology delivers on all the promises he describes in the video.  How do I know?  Since the founding of Workday in 2005, all our applications have been built using a pure in-memory database architecture that has done away with the relational model.  We have been using this technology for more than 5 years, and have been in production with global, Fortune 500 customers with it for the past 3  years

I guess this is an example of just how far behind the legacy providers like SAP are in terms of innovation.  I wait, with baited breath, for the next installment of “Hasso on Hasso.”  Might it be “The iPhone: the Next Big Thing?”.

Welcome to the present, Mr. Plattner.  If you really want a glimpse into the future, I invite you to stop by Workday’s offices :-).

The suggestion was that SAP was late to the game and that its new technology really wasn’t that new / revolutionary.  

Note: See this more recent blog from Brian Sommer for a comparison of how Workday and SAP use InMemory technology.

Lately, I’ve been thinking about Bhusri’s statement and have been trying to figure out why HANA and SAP’s InMemory technology is so important.  

Although the media focus is often on the technology itself, it is more important to look at HANA and InMemory technology in the specific context of the general SAP ecosystem and the market for enterprise software.  In my opinion, a critical aspect is the ability of SAP to tap into its existing customer base and provide this technology to a very broad base of potential users.

OK – Workday has been using InMemory technology since 2005 but how many customers does Workday currently have. Based on the latest count, they have 123 customers. SAP has 172,000.  Regardless of the fact that Workday is viewed as a threat by some in the SAP ecosystem (see the Why Workday is a Major Threat to SAPfrom fellow SAP Mentor Jarret Pazahanick for a lively discussion on this topic), the number of users impacted by Workday’s use of InMemory technology is still less than that of SAP’s potential customer base.  

Some pundits may suggest that I’m comparing apples and oranges: Workday’s InMemory technology is already available and being used by all of its customers. SAP’s HANA just went into GA and the number of productive users of HANA is still limited.  First, SAP has other InMemory solutions (for example, BWA and SAP Enterprise Search)  that are already productive.  As suggested by the relative youth of HANA and the wide-reaching plans of SAP for its InMemory technology,  the real impact of this technology will occur in upcoming years. As I stated above, it is this potential / the future impact that is the more important consideration.

SAP has the ability to truly democratize the use of InMemory technology (Note: I once wrote a Liberating HANA – How River will democratize SAP’s In-Memory technology about the River to democratize InMemory technology for developers) and to impact the daily life of the millions of users supported by their customers. As the various HANA-related blogs of Jeff Word have demonstrated, these changes can be as simple as speeding up of the creation of “lunchtime” reports

Although the large number of existing customers provides a myriad of sales opportunities for this technology, it is also presents SAP with various challenges. The understandable desire of SAP to bring HANA into the landscapes of as many existing customers as possible forces SAP to consider an almost unlimited number of potential use cases for this technology.  Since this customer base spans different industries and contains multinational companies of various sizes with different characteristics, the associated HANA-related scenarios are equally diverse. Realtime analytics is a general benefit that is welcomed by most customers but the greater benefits (and those that are the most interesting in my opinion) are usually associated with industry-specific scenarios which are usually more difficult to define.   A recent list of potential use cases demonstrates the diversity of such scenarios.

Other specific examples concern sustainability and energy:

When it comes to industry-specific use cases, sustainability could be the area where HANA makes the biggest impact, according to Adrian Bowles, VP and principal analyst with the Constellation Research Group. Energy meters collecting masses of consumption data hold the keys to managing energy demand. But analyzing those volumes of data has been extremely difficult. Effectively analyzing those energy use patterns could help companies or utilities decide when to shift energy loads for maximum efficiency.

In addition, Bowles says, SAP’s inroads in the energy and carbon management sector (in terms of customers and products) make this area a natural target for HANA.

“High-speed analytics will be the differentiator here,” Bowles says. “The analytics power that HANA will bring will allow us to not only identify what certain patterns in that energy data mean in terms of sustainability but do it early enough that we have time to do something about it.” [SOURCE]

SAP must demonstrate the actual business value of the involved technology in specific industrial scenarios that reflect actual customer requirements rather than meeting broader business requirements (for example, faster reports) that often allow vendors to hide behind the hype of their own marketing efforts.  As a result, the efforts of consultants from SAP and its partners to prove the value of this technology in one-on-one interactions with customers will have a much greater long-term impact than the blogs of marketing departments.

As evidenced by the innovative demos seen in this year’s The HANA InnoJams prior DKOM 2011, SAP’s industry experts and developers can identify such scenarios. The challenge for SAP will be to 1) convince customers of the importance / relevance of such scenarios and 2) standardize such industry-specific solutions so that the associated implementation efforts remain low.

The Process rules – Some things never change

A recent Finding the right SAP HANA scenario for your business by fellow SAP Mentor John Appleby about HANA contained the following statement about the possibilities of integrating HANA into existing processes:

Tieing back into the process. Once you’re this far – it makes sense to tie it back into regular business process. So you could make it reorder product, if it is out of stock – or penalise the retailer in our example for not making promotions. SAP HANA then becomes the centre of a real-time decision engine.

When I read this statement, I was automatically reminded about past discussions about integrating collaboration / Web 2.0 tools into existing processes. Every time some new technology / trend emerges, there is the apparent need to include this technology into the existing process structures. I have to admit that Thoughts on the Application of InMemory Technology to Process Environments.   For me, this tendency once again proves the longevity and importance of the Process in Enterprise IT – The Great Debate – People vs Process in SAP’s OnDemand offerings – and the continued importance of the BusinessSuite with its set of time-tested processes in SAP’s long-term strategy.  The apparent failure of collaborative software to successfully achieve this interaction (see Dennis Howlett’s discussion of the recent Jive’s S1 filing for more details) demonstrates the difficulty in accomplishing this goal.  Thus, the intent to integrate HANA into processes is commendable but its success is in no way a given.

The HANA AppCloud and HANA POCs

In the same Finding the right SAP HANA scenario for your business, John Appleby also describes in some detail the importance of creating HANA POCs.  What I missed was the potential of the Creating a data market with the HANA AppCloud to provide an environment where companies could quickly set up such POCs.  The HANA AppCloud would enable companies to kick the tires of the technology involved with fewer costs than if they set up a local instance of HANA.  Installation costs and the time involved to set up the environment would also decrease.   The HANA AppCloud could also act as an initial staging platform if tools are available that could transfer the data and associated application code to an on-premise HANA installation if a POC in that environment is also desired.  
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  1. Jarret Pazahanick
    This is an excellent article and one of the best that I have read on SCN this year. It is always impressive the amount of thought and detail that go into your blogs.

    One of the reasons I wrote the “Why Workday is a Major Threat to SAP” is to get discussions and comparison like this in the marketplace especially around core areas like functionality,usability,in-memory and would love to see one around mobility (hint John Moy/Kevin Benedict) 🙂

    On a side note I have heard from many people within SAP that they have Workday firmly on their radar screen and view them as a real competitive threat.

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    1. Richard Hirsch Post author
      You’re right – comparisons between vendors are quite useful when they come from community. However, as Dennis’ comment suggests – such comparisons aren’t easy to make.  The diversity in enterprises is matched by the diversity and complexity in the software that services such entities.  Especially the rise of OnDemand environments makes often such comparisons a challenge.

      The heated debate that surrounded your Workday blog, however, demonstrates the value placed by the broader ecosystem on such efforts.

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  2. Dennis Howlett
    Workday’s customer count belies the extent to which it is used. They’re talking about running 100K person payroll inside a 4 hours time frame (as example), they have instances where there are 275K people on the system – not all running apps simultaneously but available to them. Reporting and BI are available on any set of transactions in real time without the need for any additional processing or application. And…it is all integrated from the get go.

    Part of the way they’re able to handle this is through the grid framework they’re developing.

    Now – does this work smoothly for all purposes? No. There are things that the object store/IMDB does not handle well at this time but that does not mean the issues won’t be solved.

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    1. Richard Hirsch Post author
      @Dennis

      Excellent point – what I didn’t consider is the underlying architectural model. Since Workday is a SaaS and the majority of SAP InMemory installations are assumed to be OnPremise, the comparison is not exactly accurate. Indeed, Workday may currently have more simultaneous users for InMemory technology for a single environment (for example, the largest SAP customer using InMemory technology vs the largest instance in Workday’s OnDemand environment).  In the long term, however, I still think that the total number of users effected by InMemory technology (either via HANA or other offerings) will be greater for SAP rather than Workday.

      I’ll also update this comparison in a year’s time when the use of SAP’s InMemory technology is more established in its OnDemand offerings (for example, Business ByDesign).  The question is whether this future comparison will be  easier or more appropriate since ByDesign and Workday are not really active in the same market segment.

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      1. Jarret Pazahanick
        One of challenges that SAP will have is trying to differentiate to prospective NEW customers why SAP’s in-memory offering is a real competitive advantage over Workday’s offering as I think it is obvious that comparison is going to be very challenging.

        I like the idea that you are going to update this in a years time though I think that on-premise will still be the most appropriate comparison as ByDesign is quite a ways away from being in the same market segment.

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  3. Rolf Paulsen
    A welcome variety besides the other technology-centric blogs and articles about HANA.

    Since SAP itself focusses on the technological innovation, it is completely justified to point out that SAP is late in IM-technology.

    For the large number of SAP customers, it will be the REAL challenge to provide support even if a small fraction of this customers install HANA in the next years. HANA is a complicated technology where software is close to special hardware, OS patches are relevant etc. It will be interesting if SAP will run into an support bottleneck or not. Support is not the topic for interesting blogs, but may slow down or kill new technology if it is missing.

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    1. Richard Hirsch Post author
      That is an excellent point that I haven’t really considered yet. SAP is really pushing HANA to developers and customers but if existing SAP support structures aren’t prepared for all those requests that usually accompany a new offering of such complexity then there will might be a large number of irate individuals. I think a blog from SAP on this topic would be greatly appreciated and might do much to deal with the worries of those interested in exploiting this new technology but unsure whether SAP can handle the resulting support issues.
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  4. Nigel Page
    In IT terms, SAP is only a small player and 172,000 customers does not constitute democritisation of anything. Until this reaches into the (many) millions of customers, only a small proportion of people will ever be impacted.

    Democritisation also brings with it the need for affordability, which is challenging with a small customer base, but necessary if the goal is to be achieved.

    HANA is a good start, no question, but it has very long way to go if the goal is democritisation.

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    1. Gregory Misiorek
      well, behind those customers are users, so there are millions of people accessing an SAP system every day. security and authorizations, and corporate hierarchies make practicing democracy really tough, however. most companies seem to be dictatorships and overstepping your title can quickly turn into having no title at all. HANA may start very democratically (if we ignore the high barrier to enter) but it will be subject to the same pressures as the rest IT initiatives within the enterprise.
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