SAP after Sapphire: A look ahead
As software vendors tend to do during their big annual user conferences, SAP made a lot of promises to customers this week at Sapphire. The overarching theme was a desire to make SAP’s software simpler and its customers’ lives easier.
Like any promise, SAP’s pledge will only be as good as the follow-through. Here’s a look at the work that lies ahead, as well as some important conclusions drawn from Sapphire’s content.
It’s wait and see on Simple Suite
SAP used Sapphire to unveil Simple Finance, a new version of its core financials application that takes advantage of the Hana in-memory computing platform and uses a simplified data model. It plans to give other Business Suite modules the same treatment.
SAP will continue supporting other databases for the suite, such as Oracle. But co-founder Hasso Plattner made it clear in public remarks this week that suite customers who want the best new innovations should go the Simple route.
However, that will require an investment in Hana, which only a small percentage of SAP customers have bought so far, whether through direct purchases or as part of a subscription-based deployment of Simple Suite on SAP’s Hana cloud.
It’s also early days for Simple Suite. SAP, like many other vendors, has had delivery dates slip well past the original intent. It’s not yet clear when SAP will be able to present customers with a fully baked Simple Suite for their consideration, giving competitors more time to lure them away.
SAP also needs to give customers good reasons to make the switch, according to one observer.
“For SAP, adopting Simple Finance enables it to cut down on the vast amount of code it’s previously maintained,” independent enterprise software analyst China Martens said via email Friday. “For an SAP customer, how do they translate all that into business benefits? That message is in there, but it needs to be the primary message in order to really ramp up adoption.”
Sapphire was Bernd Leukert’s first major appearance as development chief since he replaced Vishal Sikka, who launched Hana but abruptly left the company recently as part of a management shakeup.
Leukert, a veteran SAP employee, seemed more than prepared to take up Sikka’s leadership mantle during Sapphire, speaking with poise and insight both in a keynote session and a press conference with media and analysts.
“There was a confidence with Bernd I was glad to see,” said analyst Ray Wang, founder and chairman of Constellation Research.
Hana is growing up
Sikka was so enamored with Hana, he often referred to the software as his “little girl.” Extending the metaphor, Sapphire showed that Hana is now more of a young adult, some three years after its general availability.
This week, SAP announced it has shipped an eighth service pack for Hana. In the view of John Appleby, global head of SAP Hana at consulting firm Bluefin Solutions, the release marks a turning point for the platform.
“There was a time during Hana’s early years—2011 through 2013—where it was nearly a full time [job] just to keep up with what was going on,” he wrote in a blog post this week. “By comparison, I just read all the release notes, changes and new features in the SPS08 release, and I know what’s new within a few hours and how to apply it to our customers. What? SAP stopped innovating with Hana? It’s not so much that, but rather that it was time for Hana to grow up.”
“For the last 12 months I have watched Hana become more and more solid—no longer is she racing around the track on a sports bike—she has gone to college and got a job,” Appleby added. “I’m willing to put my money where my mouth is, because I have a customer going live in a few weeks and I have chosen this release. So far, there are no surprises, and this is a large enterprise class system with a total of 18 nodes of Hana.”
Hana’s level of maturity could jump-start sales of the technology. One person who does not want that to happen is Oracle CEO Larry Ellison, who will unveil his own in-memory computing option for the Oracle database during an event next week. If Ellison’s track record is any guide, SAP may want to brace for some rhetorical fireworks.
Fiori for free? Not so fast
SAP made a splash by announcing that Fiori, a set of lightweight, cross-platform applications that tap many of the most common processes in the Business Suite, will now be included with software licenses customers buy, as well as made available to customers with active maintenance contracts for licenses they already own.
SAP relented to pressure from user groups, which had called for Fiori to be part of maintenance given the company’s poor track record with user interfaces. While SAP co-CEO Bill McDermott termed the announcement as making Fiori free, SAP is planning to sell services for implementing it.
In addition, Fiori has significant dependencies on Hana, requiring customers to make that additional, and potentially substantial, investment.
While SAP is positioning Fiori as its primary user interface approach going forward, in doing so it’s also positioning itself to make some serious money.
Mum on mobility, for now
Sapphire’s top-line messages focused on the future of its applications and Hana, with relatively little focus placed on SAP’s enterprise mobility assets.
In a time of exploding usage of mobile devices and the Internet of Things, the omission seemed somewhat odd. But one explanation may be that SAP’s recently appointed global head of mobility, Rick Costanzo, is still cooking up his strategy plans. It’s likely SAP will make significant noise about mobility later this year.
The simple truth
Sapphire provided plenty of evidence that SAP “knows they have to disrupt themselves in order to make it to the next level,” Wang said. “There is an understanding of what a road map may look like. But a lot of the pieces of the puzzle need to be developed. There’s massive change ahead and they’ve got to invest quickly for that level of change.”
“SAP’s commitment to simplicity feels more real than previous attempts—it does have legs (and Hasso’s backing),” Martens said. “Firms who’ve successfully adopted cloud applications tend to talk about how preparing for that move forced them to question and re-imagine their business processes, often paring down vast amounts of customization—it feels like SAP itself has finally gotten that message.”
But SAP’s promise of simplicity has to go beyond the software itself, Martens added.
It could benefit “from having one or two simplicity ombudspeople or complexity czars—one or two people at C-level whose entire function is ensuring (and guaranteeing) simplicity for SAP customers,” she said. “Not only in the new software, but how to get from the old, complex stuff to the new stuff, and also the entire customer experience, particularly pricing.”
The Fiori saga is an instructive one to consider, in Martens’ view. It “felt like déjà vu all over again,” she said, referring to the flap several years ago over an unpopular support fee hike. “SAP puts something out, users don’t like it, SAP holds fast and then eventually listens and changes,” Martens said. “Doesn’t that speak to the company still not listening sufficiently to its customers?”