Navigating Changes SAP HANA Will Bring About
In SAP circles, there's something of a frenzy going on relating to anything to do with the SAP HANA in-memory computing platform. But, as is often the case, the law of unintended consequences necessarily applies.
While most SAP customers are initially embracing SAP HANA as a way to speed up the processing of reports, it's only a matter of time before they start moving the majority of their SAP applications to HANA. Driving much of that shift will not only be the desire to run those applications at orders of magnitude faster speeds, but also a rare opportunity to consolidate SAP application licenses.
Most customers are running multiple instances of SAP—many of which they often inherit by acquiring another company. As an in-memory computing platform, SAP HANA provides the raw horsepower required to consolidate many of those applications in a way that should significantly reduce the total cost of the SAP operating environment.
While that overall consolidation may help SAP reduce its customer support costs, a dip in licensing revenue is not what SAP would ultimately like to see happen. Instead, SAP is going after small and midsize enterprise (SMEs) more aggressively than ever. To that end, SAP has launched a "buy now, pay later" initiative in the SME space that provides zero-percent financing for up to 24 months when customers purchase any SAP product on the reseller price list.
As cloud computing continues to evolve in the SME space, the way customers acquire software is fundamentally changing , according to Kevin Gilroy, senior vice president and general manager for both the Global SME Segment and Indirect Channels at SAP. They don't want to incur a massive up-front expense. Instead, they want to be able to easily access the business value of an application and, if need be, incur little-to-no switching costs should they decide to shift to another application. Ultimately, Gilroy said, this shift will fundamentally change the way SAP and its partners bring products and services to market.
In the meantime, server vendors and their channel partners are anxiously awaiting the pending consolidation of SAP applications. Hewlett-Packard, for example, is touting a line of x86 systems that are purpose-built for SAP HANA, including a Project Kraken offering due out later this year that is configured with 12 terabytes of memory.
According to Paul Miller, vice president of marketing for HP Converged System, as customers make the shift to in-memory computing, many of them will make a simultaneous switch to converged systems that will make running IT environments consisting of thousands of applications accessing petabytes of data significantly simpler.
Further on down the road, however, even more challenges await. With the rise of in-memory computing, the line between what is a database and an application will get increasingly blurry. Over time, it's likely that SAP HANA will wind up being the impetus for realigning the entire SAP product portfolio around business processes, rather than specific products.
Amit Sinha, vice president of marketing for database and technology innovation, concedes that those changes are all but inevitable not only because of the rise of in-memory computing, but also advances in data virtualization and application programming interfaces that will blur the line between where one platform begins and another ends.
Navigating all that change will clearly be a major challenge for both SAP and its channel partners. But at this point, there really is no going back. The only real choice is to find ways to proactively manage the disruption that SAP HANA represents; otherwise, customers will surely start looking around for companies that can better manage a transition to a brave new world of in-memory computing that by any measure is going to be tumultuous.
Michael Vizard has been covering IT issues in the enterprise for 25 years as an editor and columnist for publications such as InfoWorld, eWEEK, Baseline, CRN, ComputerWorld and Digital Review.