Can SAP hold his position for another decade? An integrated PaaS will be key!

Nick van de Hulsbeek, 10 December 2014

For me personally this is an important question.

The last years technology and IT is getting more fun for me as a solution consultant. Systems are easier to configure and roll-out. Even with one man from IT, it is possible now :-).

This is possible because of the new era of computing, where SaaS software is taking over.

It is no news that SAP’s focus is 100% Cloud these days.

Let’s put it a bit stronger: All current SAP on-premise installation will be for 95% Cloud based in the near future.

It’s interesting to see how SAP is moving to this new model. Look at for instance sERP, meaning simplified ERP. SAP’s current datamodel is complex but robust to support a lot of business processes through all kinds of industries. There was no reason for SAP to change that in the last decades. SAP has been used a lot by many committed customers. System integrators and consultancy companies have the expertise to run the projects.

With the introduction of SAP HANA’s in-memory platform, scalability has become increasingly important, and pay per use is the new standard. Virtualization will make this possible.

Simplifying the database model will help to reduce the TCO. Simplification is now possible as in the past, redundancy was needed to get a proper performance. SAP HANA’s in memory platform erases the need for these redundant indexes, and increases the need for simplifacation.

This new sERP model makes it possible to:

Easily update records in ECC.
Easily service the data
Less data storage
In-memory compatible

These advantages are necessary to run cloud.

One of the most important USP’s for SAP in the on-premise decade was integration. Standard integration between SAP’s CRM, ERP and BI platforms, later also mobile and now via standard services to for example Cloud For Customer, via a hybrid cloud model.

With SAP’s strategy of taking over different leaders in the Magic Gartner Quadrant, SAP’s strong topic of integration is under pressure. State of the art Cloud companies such as Hybris, Concur, Fieldglass, KXEN, Camillion, SmartOps and more are incorporated in the SAP group.

A new problem now dawns… How will these SaaS applications integrate with each other. Or with ERP on-premise for that matter? The biggest challenge of SAP is to get all of these applications, including sERP and Cloud for Customer integrated in one platform: PaaS. This must be the SAP HANA Cloud Platform. PaaS main characteristics is to support SaaS with UI and process extensions and share the same native relational DBMS. SAP’s vision is very clear on this: “One truth, One place for all data via SAP HANA Cloud Platform” See Bjorn on TechEd https://www.youtube.com/watch?v=-VHmcWf8Id4#t=180

The current status today is that SAP Cloud for Customer (SaaS) and SAP HANA Cloud Platform are not integrated on database level. At this moment you need to implement the standard Cloud For Customer webservices in the SAP HANA Cloud Platform to communicate between the two applications. So currently SAP’s PaaS is not fully supporting SaaS.

In today’s digitally connected world, it is more critical — and challenging — than ever to provide a fully integrated proposition (business suite) as a Vendor (in the cloud).

Let’s see how this develops.