Business software provider SAP has announced that its ERP suite can now run on its real-time in-memory database HANA.
Further reading
Analysis:SAP stares down its licensing critics SAP users frustrated over complex licensing and'licence parking'Billion dollar Oracle ERP project shot down by US Air Force
In the announcement,made yesterday,SAP claimed that this move"empowers customers to run their business in real time within the window of opportunity to transact,analyse and predict instantly and proactively in an unpredictable world."
While this represents an improved offering from SAP,and an opportunity to get at valuable business information more quickly for its customers,some analysts doubted that this alone would be enough to convince firms to upgrade,or switch to SAP.
"SAP Business Suite on HANA has the potential to be a game changer by making SAP much more relevant to its customers.But in the near term,SAP Business Suite on HANA should be seen as opportunistic upgrade for existing customers or greenfield opportunity for new ones,"said Tony Baer,Madan Sheina,Nicole Engelbert,Carter Lusher and Warren Wilson from analyst firm Ovum in a joint statement.
"Few if any enterprises currently rank replacement of enterprise systems as top priority.Convincing customers that the"transformative"benefits of Suite on HANA will be non-disruptive technically is the challenge SAP faces with an entrenched Business Suite customer base.Companies don't swap out their database and ERP investments overnight,"they added.
However,Philip Adams at the SAP User Group welcomed the new offering.
"It's great to see that SAP has listened to the feedback we provided as part of SUGEN[the SAP User Group]and incorporated that into the pricing strategy.We've been used to paying for databases in a certain way,so it's great to see that SAP providing similar licensing options.
"In terms of the solution itself,it looks great.In the first instance I'd expect those organisations that have a real need for speed to look at migrating.I'm sure new customers will also welcome the news as it simply gives them more database options,"said Adams.
Angela Eager,research director at analysts TechMarketView was similarly positive about the potential impact of real-time ERP for SAP.
"With this move SAP is extending its revenue potential by making an assault on the database market-it is not disruptive but will make waves.It certainly raises the intensity in the long-running Oracle-SAP confrontation because customers will no longer have to look to Oracle(and other providers)for the database on which to run Business Suite,"she said.
While using HANA's in-memory capability will speed up the business reporting process,it is the ability for data views to be generated immediately that will be more exciting to potential customers.
This is"a benefit that not only reduces database footprint and storage requirements,but also potentially simplifies the modelling and deployment of data and the design of analytics or other complementary applications that run atop Business Suite,"commented Ovum.
"HANA's in-memory architecture also allows analytics to be
embedded with transaction processing,enabling companies to become more agile.For instance,SAP customer John Deere achieved positive ROI on its HANA investment based solely on the benefits of implementing it for pricing optimisation,"they added.
However,brand and messaging remain a concern for SAP,who need to build a clear picture of their offering for the market.
"HANA has evolved over the last two years from a database to an analytics platform to simply a'platform'.How SAP avoids confusing the market will be a key factor in driving competitive advantage."
SAP has been criticised in recent months by customers at the SAP user forum held in the UK,and also by Lego CIO Henrik Amsinck,who told Computing in November last year of his frustrations at the complexity and inflexibility of its pricing and licensing models.
"SAP has totally spoiled its own value proposition,"Amsinck said."In the old days I loved SAP because the price list could fit entirely on one A4 page.You just paid for light,medium and heavy users,it was very simple.But it has completely blown that away now and I'm so sad about it.It was a very transparent costing structure,but it's now a hyper-market of applications.
"The price list is now over 300 pages,and it's very hard to work out how to do something.It's even harder to work out what it costs to run that number of applications.Even SAP sales people have a hard time telling you what you need."
He added that SAP's refusal to allow customers to stop paying for licences they no longer want or need makes it impossible for him to cost-effectively trial new services,describing a situation where he wanted to experiment with a new CRM system,providing it to a business unit to try out for a couple of years.
"Imagine you take the whole thing as a pilot,buying licences,add-ons and other fees,but it ultimately doesn't work out and you decide not to continue.Now the SAP pricing system says that's fine,they take back the licences,but you'll still pay maintenance even though you're not using anything.
"You'll pay 22 per cent per year-and to me that's very weird.I'm giving the licences back,but they're charging maintenance forever.So it's cheaper to buy the same box from third-party vendors because they can't charge me for the maintenance if we quit.
"So now,if all else is equal,if I can find a shadow IT product offering the same service,I'd buy that instead because the licensing terms will be far more attractive."
He complains that this inflexibility from SAP makes it impossible for him to deliver on his CEO's ambition.
"How can I live up to the CEO's request to be more adaptable if anything I experiment with will haunt me forever?Am I the only CIO to worry about these licensing terms?".
