The Business Suite on HANA: The announcement and what this means for customers

I was lucky enough to be invited to the SAP’s exclusive event in which they announced the Business Suite on HANA on 10^th January. The Business Suite on HANA is big news for customers and consultants alike and was already widely anticipated to be announced prior to this event. There was a lot of information given prior to the main Press Conference, which was held simultaneously in 3 locations.

Due to the high-profile nature of this announcement, SAP arranged 3 simultaneous events covering 3 timezones and hosting a number of senior SAP executives. The events were held in Palo Alto, New York, and Frankfurt and kicked-off Jim Hagemann Snabe and Bill McDermott, Co-CEO’s of SAP, holding simultaneous media/analyst briefings in Frankfurt and New York respectively. I was in attendance at Jim’s session and he spoke of how he had waiting 3 years for this event. He began by speaking of the technological advancements that create a massive breakthrough and change the way things are done. He highlighted SAP’s main innovations: R/1 (real-time mainframe business processing), R/3 (client-server technology), and then SAP HANA (real-time database-less processing). It was at this point that revealed the details of the Business Suite on HANA.

Business Suite on HANA is not R/4

Snabe was clear that the Business Suite on HANA is not R/4. He specified that while an R/4 system could be disruptive to the existing investment of customers and to business operations, the Business Suite on HANA will be delivered as an Enhancement Package – which SAP maintains is “Innovation without disruption”. He cut to the chase quite quickly and highlighted the licensing model, pricing point and how the Business Suite on HANA will remain compatible with the same databases that it currently is.

There will be no additional licensing for the Business Suite on HANA, although HANA must be licensed as a database (instead of, say, Oracle or Microsoft SQL Server) and, importantly, the pricing has been intentionally set to be comparable to alternative databases in the market. One important point to know is that HANA-certified hardware is required to run HANA in this scenario. As the present put it after Snabe closed: “a small step for IT, but a big step for business.”

Ian Kimbell, the speaker who is most famous for his SAPPHIRE event presentations, gave a brief but impressive demo of the capabilities of the Business Suite on HANA via a tablet app. The demo included drag-and-drop selection of data from a HANA-generated graph and on-the-fly processing of 80 million records in roughly 1 second. Up next was the customer panel featuring Bayer MaterialScience, Ferrero Group, and HS24, who discussed their usage for around 15 minutes. Their message was similar to other messages: processing time for business-critical data was vastly reduced by around a factor of 10.

Global Press Conference

After this session concluded there was a break before the global press conference commenced, where the Business Suite on HANA was formally announced. As part of the press conference were speeches by Hasso Plattner, Chairman of the Supervisory Board, and Vishal Sikka, Member of the SAP Executive Board, Technology and Innovation, which included a short live demo from Sam Yen, Global Head of Design and User Experience.

In Hasso’s passionate and nostalgic speech “Making a Vision reality”, he referred to the release of R/3 in 1992 and how he knew then that something had to change in the future. 6 years ago, he and his students at Potsdam discussed “14 years after R/3, what would an ERP system look like if we started from scratch?” They used Design Thinking methodologies to begin conceiving what has now become the SAP HANA and the Business Suite on HANA. 3 years ago, SAP started the development of SAP HANA. The way Hasso described the design process showed a higher level of thinking and innovation that is part of the vision that has made SAP the company they are today.

Hasso made the following statements about the Business Suite on HANA:

• A non-disruptive change of suite to HANA with unbelievable performance results
• Because of the power of SQL only one version of suite will go forward using not only HANA, but also DB2, Oracle, Microsoft SQL Server, SAP-ASE
• Code will be changed to support all databases, with some unique code for HANA
• The biggest technological change was optimization for multi-threading processing
• More and more apps will run through mobile and this requires processing below 3 seconds

Hasso closed his speech by concluding that he sees a brilliant and bright future for SAP for the next 5-10 years.

Vishal spoke of the innovation of the Business Suite on SAP HANA and how this was going to revolutionize business processes with just-in-time processing. He made 2 intriguing statements:

• SAP has reinvented the software that reinvented businesses
• HANA is not only a database, but also a platform

For me this proves how highly SAP feels about the Business Suite on HANA and the effect that it can have on their and their customer’s business. I also felt that Vishal was genuinely proud of not only the HANA product, but also of the people that had worked hard to make it a reality.

Customer Benefits

The attention then switched from Palo Alto to New York where Rob Enslin, Member of the Global Executive Board and Head of Sales, talked about the business value of SAP HANA alongside Derek Dyer of John Deere. Derek named several reasons for using the Business Suite on HANA:

• Bring new innovations to the business
• Solve problems that were deemed unsolvable before
• Simplification of IT stack and therefore better TCO
• Crisper insights into company data
• Enhanced self-service mobility for end-users

What was interesting about this was many of these were potential advantages but none of these were actual measured benefits of using Business Suite on HANA. To me it didn’t seem that John Deere were yet fully live with the Business Suite on HANA.

The main event concluded with an Executive Q&A with Hasso Plattner, Vishal Sikka and Rob Enslin. Hasso re-iterated that there will only be one version of the Business Suite and customers can upgrade without using HANA as a database. In reply to one question, Rob made the claim that they could bring a Design Thinking team into a customer and give them an analysis of the benefits of using the Business Suite on HANA within 24 hours. If SAP can – and will – genuinely do this for customers it will be an interesting statement of intent, although I am dubious of how many customers will not be recommended to go with the Business Suite on HANA.

So what does this all mean for customers?

I generally think that this provides a solid option for customers. I’m a big fan of HANA and its potential and I believe that customers should seriously consider moving their Business Suite database to HANA. The licensingmodel seems attractive and SAP is obviously looking towards aggressive uptake in the Business Suite on HANA, particularly with new customers. In addition, SAP will be offering a Rapid Deployment Solution (RDS) from February 2013 for migration and implementation of the HANA capabilities and Vishal Sikka specified that this will be particularly useful for new customers. The major stumbling blocks will be the cost of the HANA-certified hardware and the limited expertise currently available in the market. Creating a business case for moving to the Business Suite on HANA will really depend on whether the benefits can be quantified versus the cost of the hardware (since the database license should be comparable with the existing database).

Since the Business Suite on HANA capabilities are delivered as an Enhancement Package it has the potential to be a mini-upgrade project for customers, although because the upgrade is on the kernel and database layer there should be less disruption than standard Enhancement Package implementations. The biggest challenge customers will face is finding experienced HANA resources to deliver this upgrade smoothly and efficiently. It goes back to customers being vigilant and thoroughly vetting the possible consultants that will be implementing. Customers should also be aware that an existing implementation partner without the expertise of vision of HANA may advise against such a move.

Overall this announcement as a number of potential benefits that will definitely provide a greater ROI from their SAP ERP system. Since HANA is both a database and platform, as SAP demonstrate in the below architecture diagram, then this provides additional benefits than purely processing speed.

The main advantages that most customers could realize include:

• Cost savings/greater ROI
• 10x to 1000x faster analytics
• Significantly enhanced processing speed and operation of the SAP ERP system
• Elimination of batch programs
• Landscape simplification
• More functionality with less code
• Significantly less maintenance and database tuning

It is difficult to know exactly what customers will benefit from in terms of landscape simplification and functionality, although the processing power of HANA does provide more opportunities to develop high-scale applications that were simply not possible before. There are a number of standard reports or programs in SAP that can take over12 hours to complete and these types of jobs – especially those that require some user input during operation – will be dramatically quicker.

One possible obstacle that I’m not really able to quantify at this time is how customer code will work with HANA. In one of the Q&A sessions Hasso said that he believed most customer code will run on HANA. At this stage it is hard to tell how little customer code will not run on HANA, if any. For customers with many lines of custom code it might be worth waiting for a few guinea pigs before looking into the Business Suite on HANA.

As mentioned above, customers may find it difficult to find a partner with adequate expertise. While finding niche expertise to just come and upgrade an existing SAP ERP system to run on HANA might be feasible (although ha tad pricey), it may prove much harder for customers to find a partner with the necessary resources to implement this as part of a fresh ERP implementation. SAP plan to address this with significant investment in training to support customers who want to leverage Business Suite on HANA. To date there are already over 600 certified and 5000 trained HANA consultants, although whether there is much experience between them and whether this is the right type of experience is a different matter entirely.

For customers who do not wish to migrate to Business Suite on HANA – and SAP has 40,000 customers running on each of DB2, Oracle, and Microsoft SQL Server with 6,000 on MaxDB – do not have to as support will remain for these databases. The Business Suite on HANA will use the same code for all databases, although some code will be optimized for HANA.

Summary

This is an important move for SAP and the licensing and pricing point make it attractive to customers. There is still a need to create a business case and evaluate fully whether this will be beneficial, but if the cost of the HANA-certified hardware and the right expertise is not prohibitive then even an incremental decrease in processing times could bring a significant ROI in a short period of time. SAP have done a good job of the announcement, but there is certainly still a number of finer details that customers will need before being able to make the case for moving to the Business Suite with HANA.

Photos courtesy of SAP Mentor Martin Gillet and all of the great photos from the Frankfurt event can be seen here.

For the record, SAP paid for my travel to attend the event but has no influence in my views or opinions.