NEWS ANALYSIS: SAP's strategic hat trick involves convincing enterprises that the HANA in-memory system will bring simplicity to the corporate IT stack.
I don't believe I've ever used "simple" and "SAP" in the same sentence. Implementing SAP enterprise applications was a complicated software and hardware undertaking that, while usually worth the journey, required time and money.
Simple is as easy as signing up for a Google Gmail account. Now, newly minted sole SAP CEO Bill McDermott is championing simplicity and an end to corporate complexity as SAP's enterprise mission.
"There's a huge chip on my shoulder," McDermott told the attendees at SAP's Sapphire annual conference in Orlando, Fla. That metaphorical chip is complexity weighed down by layers of corporate bureaucracy.
Challenging corporate bureaucracy is not one of those topics likely to draw anyone favoring the opposite. But finding a way to banish complexity while growing a big, international presence is no easy task.
At the heart of SAP's strategy is the computing cloud powered by its HANA in-memory computing system
. "HANA removes redundancy, reduces complexity and simplifies the IT stack," said McDermott. But utilizing the HANA features requires a company to obviously have access to the HANA system either on-premises or accessed through the cloud.
The goal might be to have HANA chugging away
in cloud environments, but getting a large segment of non-SAP users to embrace a new architecture is a formidable task. McDermott acknowledged the task and said the company is embarked on an educational marketing strategy that will see a Netflix-like original content tactic applied to enterprise technology.
SAP is in the quandary faced by many large traditional enterprise vendors, including IBM, Hewlett-Packard
and Oracle. While the cloud is the future of corporate IT, the vendors built their businesses on selling boxes and consulting contracts to customers. Once customers were locked into proprietary systems, they often had little choice but to stay with the same vendor.
Now the shift is to cloud-based systems built on subscription services. Enterprises are anxious to engage in a journey to the cloud, but unclear about how to evaluate competing vendors and aware that Amazon Web Services is the commanding presence in cloud computing.
McDermott outlined a series of moves designed to get SAP into the forefront of customer consideration. Among the changes in the SAP product line was making two products free. Fiori is SAP's user interface suite of 300 role-based applications used to design consistent SAP interfaces across applications and platforms.
Personas is SAP's drag and drop product for modifying graphical user interfaces. The products are now free, and a credit will be given to users who previously paid for the products. The move is designed to promote the image that SAP provides modern, graphical, mobile tools to create appealing customer applications.
The company also introduced a "Simple Finance" product utilizing the Fiori interface combined with the HANA engine to process real-time financial information, including predictive capabilities. Simple Finance is the first of an expected series of "Simple" products that will include other corporate functions such as inventory and enterprise planning. "We want everyone to run a simple, gorgeous user experience for SAP," said McDermott.
SAP is engaged in trying to woo three classes of customers. SAP wants to move existing SAP customers to its cloud platform, and the company wants to win customers away from traditional competitors, including Oracle. Then perhaps most importantly, the company needs to convince fast growing, Internet-oriented startups that SAP and HANA
are a legitimate choice for their infrastructure.
Security, reliability and adherence to standards will be three of the important attributes SAP wants to get across in its marketing messages. This new strategic initiative for SAP is taking place as the company has experienced turmoil at the top of the organization, including the recent departure of technology head Vishal Sikka
McDermott has a lot of work ahead to convince enterprise executives that SAP and HANA
deliver the right platform to build a simple and less complex organization. If successful, the transition of SAP from reliable but complex to reliable and simple may indeed be worth a Netflix-like mini-series.
Eric Lundquist is a technology analyst at Ziff Brothers Investments, a private investment firm. Lundquist, who was editor-in-chief at eWEEK (previously PC WEEK) from 1996-2008, authored this article for eWEEK to share his thoughts on technology, products and services. No investment advice is offered in this article. All duties are disclaimed. Lundquist works separately for a private investment firm, which may at any time invest in companies whose products are discussed in this article and no disclosure of securities transactions will be made.