SAP's user conference, SAPPHIRE Now, received a noticeable face lift this year. A sprawling show floor with integrated session and keynote theaters provided ample opportunity for attendees (SAP co-hosts the show with the independent ASUG user group) to attend sessions, talk to partners, and meet with executives. The layout communicated innovation and the production group behind the show deserves high praise. The high production values would have been minimized if SAP didn't bring content t
- Streamworks – an ad hoc business process management tool that allows companies to induct relevant experts into a planning or problem resolution process with full access to SAP processes. The capability allows for a process to be constructed, tracked, and archived driving continuous improvement.
- Business Context – the process management capabilities are enhanced by the availability of information views that are context aware. SAP incorporates its understanding of industry processes with Business Objects tools to organize relevant information for specific line of business functions.
- Social Network Interrogation – SAP announced a set of tools that enable companies to parse various social networks to evaluate current sentiment. This capability can be valuable to informing the product planning process at manufacturers or to help retailers respond more quickly to either positive or negative feedback with offers delivered through the same social networks.
As to the long term direction, SAP saved those details for Hasso Plattner's keynote.
Oye Como Va (Listen to how it goes)
The venerable chairman of the supervisory board laid out an interesting vision for the incorporation of an in memory database to fuse the transactional and analytic data models within the SAP footprint. Leveraging technology advances such as multi-core processing, larger addressable memory, and columnar database structures, SAP is jacking the house up and putting in a better a foundation. A foundation that will enable it to blend its Business Objects analytic capabilities and recently acquired Sybase mobility capabilities with its process platform. The initiative has several important elements:
- Customers will not have to upgrade to the latest version to take advantage. Even those as far back as 4.x will be able to incorporate the in memory database.
- Customers can roll it out in stages, first in parallel to installed relational databases and then as a replacement.
- Cumbersome ETL processes can be eliminated.
- The columnar database will make data model upgrades and custom extensions easier.
- The in-memory database will be core to Business By Design 2.5, the latest version of its SaaS offering due for general availability in July.
The move has interesting implications for SAP's position in the manufacturing and retail markets:
- A large portion of its manufacturing revenue (>60%) comes from the installed base. These customers are generally happy but have been resistant to upgrades. Hasso said specifically in his keynote that customers saw too much risk in disrupting a stable installation. Getting the new database underneath those installations with no cost or risk of disruption to the customer makes it an easy decision and opens up greater opportunity for SAP to sell the capabilities of acquired assets from BOBJ (Business Intelligence, Analytic applications) and Sybase (mobility based extensions).
- For retailers, who aren't nearly as SAP centric, the architectural approach represents a better opportunity to connect analysis to execution.
- Taking this approach eliminates a key architectural barrier to putting SAP on the cloud, namely the existing SAP middle tier. SAP was able to scale to the degree large manufacturers required because they bent the rules of client server and then n tier computing. Block mode processing on the client, nested fields, the ABAP language, and their own SQL query optimizer all enabled this scale and allowed them to capture market share in large enterprises. However, this same middle tier (and its database independence) put it at a disadvantage in migrating to the cloud. The in-memory database brings the tiers (data, logic, presentation) together in a very cloud friendly way.
- Of course, the natural progression, if successful, means that the need for a third party database will be eliminated meaning that SAP will no longer be providing profitable cash flow to Oracle, IBM, and Microsoft. We don't believe this was a primary design goal, but certainly not one lost on SAP executives.
For buyers, many questions remain. Most notably:
- The ETL processes for SAP data will be eliminated, but most companies have heterogeneous data sources. How will SAP support the need to incorporate these sources into the analytic data stores?
- Will ecosystem partners be expected to migrate their applications to the in-memory database to remain certified?
- Will BOBJ remain a set of business intelligence tools or will SAP begin to create specific analytic applications for line of business needs? Will existing analytic applications be included in these plans (e.g. APO)?
- Similarly, will Sybase remain a mobility toolset or will SAP produce line of business and industry specific applications?
- Will SAP allow large enterprises to run a private cloud instance of Business By Design to support two tier ERP (e.g. corporate ERP tied to plant ERP), value network coordination, or joint venture strategies?
- Given a somewhat spotty in-memory track record (see Live Cache), can SAP make this database work reliably and perform as promised?
The announcement puts SAP back in alignment with their customer's need for more value from their ERP investment without the burden of upgrading. The initiative also overcomes some the architectural challenges SAP faced in delivering on a SaaS basis reliably. I'm sure many more questions will arise over the next several months, but overall this could be a brilliant business move for SAP and a tremendous opportunity for its customers. If you are a current SAP customer, it is worth investigating. You may want to see some of the issues addressed by the early adopters, but it is relatively low risk and carries tremendous opportunity to improve system performance, lower the cost of ownership, and magnify the value of your SAP data.