During SAP Global Press Conference web-cast (Tuesday, May 7th) SAP revealed their vision for SAP cloud-based offering. This announcement was followed by a series of blogs and SAP Sapphire sessions/keynotes/discussions where SAP did a really good job on explaining how individual parts will fit together and what are the differences between individual offerings.
More on this subject can be found in the following blogs:
Sunshine on a Cloudy Day (by Vishal Sikka)
SAP HANA Enterprise Cloud, SAP HANA Cloud Platform, SAP NetWeaver Cloud Platform, NEO, … (by Björn Goerke)
Evolution of the SAP HANA Cloud Platform (by Aiaz Kazi)
Sapphire Now 2013 report card (by Jon Reed)
I personally believe that it would be very useful to describe SAP HANA Enterprise Cloud also from technical side (some architectural diagram on how it is built) – but that is not the point of this blog.
While SAP did really well on explaining this particular move I still believe that it is not clear enough (at least to me) where exactly this move is leading to in long-term perspective. There is space for different interpretations of where SAP is going and how the vision of SAP future can look like.
Before I start I would like to point out that all of this is pure speculation based on lack of information on this subject. I hoped that this would become clearer during SAP Sapphire but I did not find anyone able to provide me with a satisfying answer to this question.
I would also like to highlight that content of this blog describes my personal opinion and is not representing in any way the position of my employer.
Speculation #1: SAP as the exclusive cloud provider for SAP HANA technology
First interpretation of this move (and the most logical) is that SAP is aggressively entering the hosting business with the goal to take over (ideally) all the new SAP HANA based installations as part of their SAP HANA Enterprise Cloud offering.
Of course there will be customers that will prefer to stay on the premise and customers preferring other hosting partners and these will continue to be supported by SAP, but all customers will be pushed by SAP to take advantage of SAP HANA Enterprise Cloud.
What does it mean? This might have considerable impact on the SAP ecosystem. From the perspective of SAP HANA Enterprise Cloud many SAP partners will not be partners anymore and will rather become suppliers – of hardware, of software (for backups or monitoring), and possibly also of services (in case that SAP will decide to outsource part of managed services). In any way SAP would step between the customer and the partner, taking over the control over the engagement and closing the options for customers.
In other words – there will not be any need for basis teams or infrastructure architects (except those working directly for SAP). This can be seen as a serious blow not only to partners themselves, but also to the whole SAP ecosystem, because some roles will become redundant (from the perspective of SAP HANA Enterprise Cloud).
Note: Of course nothing will change in the on-premise world, but this world will become smaller and smaller over time.
What about non-HANA based applications? SAP announced that the purpose of SAP HANA Enterprise Cloud is to host SAP HANA based applications. But what about the rest of the customer environment? Possibly, this is where partner cloud offerings (that are usually more generic and are able to host various technologies) come into play.
During SAP TechEd 2012 in Last Vegas SAP was predicting the time of „interconnected clouds“. Is this vision describing SAP future?
SAP announced that all SAP applications will be able to run on SAP HANA. Therefore this also means that all SAP applications will be supported in SAP HANA Enterprise Cloud.
Does this mean that in the future SAP will expect that all SAP software will be hosted in SAP HANA Enterprise Cloud and all non-SAP software in partner clouds?
Of course we are speaking about SAP vision for the future – real result can be completely different as it depends on what the customers will demand.
Speculation #2: SAP HANA Enterprise Cloud as a „prototype“ for other cloud partners (or maybe also SAP customers)
Second interpretation can be seen as opposing extreme to the previous example.
SAP published SAP HANA Enterprise Cloud FAQ:
In this FAQ you can find the following question and a corresponding answer:
Q: Is SAP getting back into the hosting business? A few years back SAP said that hosting was a partner’s domain and many invested in that business.
A: SAP HANA Enterprise Cloud is not a generic hosting offering, but allows enterprise customers an option to accelerate their SAP HANA, SAP Business Suite, and SAP NetWeaver BW powered by HANA deployments; certified partners are encouraged to provide their own SAP HANA based offerings to customers.
Also you might notice in various places that one of the important incentives for SAP behind offering SAP HANA Enterprise Cloud was their goal to enable faster SAP HANA adoption and to remove all roadblocks for potential customers (particularly in the area of HW procurement – you do not need to buy any HW in case of SAP HANA Enterprise Cloud).
Does this mean that SAP is not seeing SAP HANA Enterprise Cloud as product that they will try to aggressively push forward, but rather as a tool that will help them to accelerate adoption of SAP HANA technology?
If so, it would be logical to expect that SAP will challenge their hosting partners and cloud providers to build their own SAP HANA Enterprise Clouds according to SAP specifications, because this would increase adoption of SAP HANA much more. In this case I would expect SAP to release reference architecture for SAP HANA Enterprise Cloud, their Cloud Frame technology and best practices on how to operate such environment.
Next question can be if big customers would be allowed to raise their own SAP HANA Enterprise Clouds in their own data centers. There are customers that are still having their own data centers and these customers could benefit from this possibility.
What does it mean? This scenario would have totally different impact on hosting partners as this would only change the way how they will provide their hosting services. Partners could continue to provide on-premise hosting and in parallel to that they can complement existing generic cloud offerings with dedicated co-located SAP HANA cloud offering.
Other partners (hardware, software or even services) would also have better positions, because they would be able to make alliances with individual cloud providers. The whole SAP ecosystem would be heavily transformed, but would survive this change.
And customers that prefer to run their SAP business in their own data centers could still benefit from SAP HANA Enterprise Cloud without giving up their independence.
To me it is not clear where SAP is heading, and I believe that anything between these two extreme options is possible. I totally agree that SAP made very important step, but in which direction?
I think that SAP should better formulate their long term vision as this will (in either way) seriously impact the whole SAP ecosystem – all SAP partners, all SAP customers and all practitioners.
I would welcome all constructive critics or explanations – it might be my mistake of not understanding SAP strategy (and I fully admit that this is possible) but I consider this unclear situation as so important, that I cannot afford to ignore it.