SAP Embraces In-App Purchasing
In a move that has broad implications for how software will be sold and invoked in the future, SAP this week at the Sapphire Now conference released an update to its Lumira data visualization application that enables end users to buy new functions from directly within the application.
Known as in-app purchasing, the SAP approach to marketing its Lumira data visualization software starts with a free version of the software that anyone can use. But once it's installed, SAP will offer access to both more sophisticated algorithms and other forms of digital content that end users can purchase using a credit card, according to Nic Smith, senior director of marketing for analytics at SAP.
"This is a shift in how SAP has traditionally done business," Smith said. "We recognize how disruptive this will be to our partners."
In-app purchasing was first seen with gaming applications, and SAP is clearly copying a business model that providers of mobile applications aimed at consumers have widely embraced.
SAP is inviting partners to develop algorithms and other content that they can monetize via Lumira, SAP said. To provide a platform for processing that code, SAP has quietly embedded lightweight implements of its HANA in-memory computing, code-named Velocity Raptor, inside SAP Lumira.
In addition, SAP is making it simpler to pull data into Lumira from both Microsoft personal productivity applications and directly from Hadoop, Smith said.
Lumira is SAP's response to a rise in demand for data visualization software that has led to the rise of Tableau Software and Qlik. Rather that moving data into a separate application environment, SAP is positioning Lumira as the new face of SAP HANA in-memory computing applications, Smith said. To that end, SAP is embedding predictive analytics algorithms that it gained from its acquisition of KXEN in 2013 in both Lumira and the core SAP HANA platform, Smith said.
The degree to which end users will embrace in-app purchasing remains to be seen. But if that monetization model for software gains acceptance, solution providers that resell application software across the channel will need to rethink their business models.
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.