SAP to Become Big Database Player

Feature Article | April 11, 2012 by Jennifer Lankheim

SAP HANA is the fastest growing product in SAP's history - it's a crucial aspect of SAP's database strategy. (Photo: Malcolm Kimberlin)

When Chief Marketing Officer Jonathan Becher opened SAP’s April 10 press conference on the company’s plan to fuel growth in the database and mobile markets, he commented on the striking 360 degree view of San Francisco from the 32nd floor of the Westin St. Francis Hotel. But, he promised, “The content [today] is even more spectacular than the view.”

The day’s event would challenge common perceptions of SAP with news about the company’s move into spaces not typically associated with an outfit many see as “just ERP,” said Becher. “After today, when you hear ‘database,’ you will think of SAP.”

SAP is a Database Company

First off, SAP declared its intention to become a leading database vendor by 2015 and articulated its vision for a real-time data platform, comprising the SAP HANA platform, Sybase data management offerings, and SAP solutions for enterprise information management (EIM).

“We believe that with the next generation, breakthrough architecture and 28 years of delivering mission-critical database technology [via Sybase], we have now in our hands the ability to be the fastest-growing database company in the world,” said SAP Executive Board Member Vishal Sikka.

Vishal Sikka, SAP Executive Board Member (Photo: Malcolm Kimberlin)

SAP laid out its plans to become a major player in the database industry in a press conference held in San Francisco. (Photo: Malcolm Kimberlin)

The SAP HANA in-memory database platform is at the center of the strategy. Steve Lucas, SAP EVP and general manager, Database & Technology, said SAP HANA helps customers access and deliver information at unprecedented speeds, and is a demonstrated success. In 2011, he cited, SAP HANA generated $200 million in revenue and was deployed by more than 300 customers.

“It was certainly a wild ride but our customers, in droves, said that they love HANA. It’s the fastest growing product in SAP history,” said Lucas. “It gives us the kind of momentum that we need to build a technology and database organization.”

Many SAP customers currently run the company’s flagship ERP application, SAP Business Suite, on rival databases. SAP is hoping to convince those customers to run SAP HANA instead.

“SAP is a database company. We are committed to this market. We are committed to making our customers wildly successful with this technology,” said Lucas. “We are in it for the long haul.”

But why?

“It’s not just because we woke up one morning and said, ‘Let’s be a database company,’” Lucas said. “It’s because our customers asked us for help. They said the existing database players are not innovating quickly enough.  Vendors are pushing more, not less. We’ve gone from transactional databases to needing data warehouses, and on top of those data warehouses we need multi-dimensional stores and OLAP cubes, and we need data marts, and the list goes on and on.”

“SAP is focused on helping customers consolidate those systems,” Lucas explained, “to solve many things with one solution – one – and save them money at the same time.”

That said, consolidation is not enough, according to Lucas. It’s all about the applications.

“Nobody who runs a company gets up in the morning and says, ‘I’ve got to have a giant, refrigerator- sized database to solve my business problem,” he explained. “They wake up in the morning and they say, ‘I have a business problem and I need a business application to solve that problem.’  Applications drive demand for databases, not the other way around. We build the applications. We build the database. And we will win in this market.”

Steve Lucas, SAP EVP and general manager, Database & Technology (Photo: Malcolm Kimberlin)

The in-memory database allows a massive simplification of the IT landscape. (Photo: Malcolm Kimberlin)

Sikka had a more aspirational bent, saying SAP’s move into the database market isn’t about ratcheting up a ladder; it’s about enabling customers to envision fundamentally new ways of running their businesses and finding – even defining – new horizons.

“We believe that we have the opportunity to become the fastest growing database vendor in the world. However, we are motivated by an entirely different sort of principle,” Sikka said. “We believe that we have a once-in-a-generation opportunity to rethink real-time for businesses. To non-disruptively renew every one of our products, but even more importantly breakthrough into totally new paradigms, like healthcare, predictive maintenance, real-time banking, or consumer applications. We are much more motivated by what can we do to bring value in these unprecedented new areas.”

Investing in the Future

Toward that aim, SAP also announced plans to launch a US $155 million venture fund for startups to build on the new platform and a US $337 million incentive program for customers to move to SAP HANA.

Sikka says these initiatives support SAP’s commitment to breaking boundaries. “The purpose of this exercise is not just to do what we did in the past better. The purpose of this exercise is to go into uncharted new territories, unprecedented new areas,” Sikka said. “Our brains somehow think that the future is an increment of the past.  But the future does not have to be an increment of the past. In fact the future can be constructed out of what we know to be desirable, feasible, and viable.  So we are extremely excited to take these technologies and to go into completely new frontiers for SAP. ”

SAP is also focused on making sure developers and database administrators have access to the best training materials for SAP HANA, as well as access to development and test environments at no cost. “We know that it is absolutely critical that the ecosystem come with us on this journey,” said Lucas. “We are focused on making sure developers and DBAs have access to the best training material, the best certification material, for free.”

Jonathan Becher, SAP Chief Marketing Officer and Steve Lucas (Photo: Malcolm Kimberlin)

Sanjay Poonen, president and corporate officer, SAP Global Solutions (Photo: Malcolm Kimberlin)

Mobile 2.0 Strategy

Database wasn’t the only news on this rainy Tuesday by the Bay. SAP also announced plans to take its mobile offerings to the next level with an acquisition, three new partnerships, and the industry’s first unified mobile platform for both business-to-employee and business-to-consumer mobile applications.

“When you think about the plans that we have to reinvent the database and you combine that with a mobile platform, you get the killer app,” said Sanjay Poonen, president and corporate officer, SAP Global Solutions. “This is what we mean by the combination of the sizzle and the steak. You get the beautiful mobile experiences that allow you to unlock SAP information in real time.”

At the press conference, SAP also announced three new partnerships. (Photo: Malcolm Kimberlin)

SAP announced mobile development partnerships with Adobe, Appcelerator and Sencha to provide users with an open mobile apps development framework for efficiently and cost-effectively developing on the company’s mobile platform.  “By joining forces with these leading mobile app development vendors, we’re making it easier for large communities of developers, in the millions, to innovate on our platform,” said Poonen.

Last, but certainly not least, SAP announced its plan to buy  mobile application development vendor Syclo, a leading provider of enterprise mobile applications and technologies in industries such as utilities; oil and gas; life sciences; and manufacturing.  The deal will give SAP Syclo’s background and expertise in mobile applications for utilities, manufacturing and other industries. Syclo’s solutions will become part of the SAP mobile solution portfolio, and Syclo’s employees will join SAP. The transaction is expected to close in the second quarter of 2012.

The Road Ahead

SAP closed the conference by reiterating its commitment to co-invest with customers to accelerate the adoption of its database platform technologies. “What this means is if a company invests in these technologies we will invest in services with them,” said Lucas. “We want to accelerate. We think this is a really critical year. This is THE year. We think we can go from a dramatic amount of success that 2011 demonstrated to something really special – a big breakthrough. It’s our opportunity to provide better solutions to our customers and ultimately for us gain market share.”

The SAP HANA experts answer questions from the audience. (Photo: Malcolm Kimberlin)

General Availability Announcements

SAP also announced the general availability in April of the  SAP NetWeaver Business Warehouse (SAP NetWeaver BW) component powered by SAP HANA and of SAP Sybase Adaptive Server Enterprise (ASE) as a database option for SAP Business Suite applications.

SAP Sybase ASE: SAP Sybase ASE is intended as a supported option for SAP Business Suite applications while SAP HANA is planned to augment the extreme transactions of SAP Sybase ASE with real-time reporting capabilities.

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