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SAP’s New Business Suite Announcement Draws Mixed Reviews

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Last week SAP made what it thought was a major announcement, that being the product launch and availability of SAP Business Suite Powered by HANA. 

As has been the tendency of SAP of late, many of SAP’s trusted market influencers, industry analysts and media sources were summoned to Palo Alto for the grand announcement.  Point of clarification, Supply Chain Matters was not on the invitee list, probably because we do not tend toward SAP group think or have significant revenue streams predicated on SAP activities. Our perspective has always been objective, and not what SAP’s media machine tends to want to hear.  One further disclosure: this author was a previous employee in SAP’s marketing groups for over two years.

This release offers SAP Business Suite applications on the in-memory architecture based SAP HANA platform, including transactions and business intelligence. This includes SAP Supplier Relationship Management and SAP Supply Chain Management suites. The primary marketing message is supporting a real-time business platform. There is a SAP HANA Analytics Foundation offered as a separate package to support analytical needs.

What’s really interesting about this announcement is the mixed reaction it has garnered, even among favored sources.  For the record, Supply Chain Matters stated over two years ago that HANA, SAP’s newest database architecture could be game-changing for B2B, supply chain applications and predictive analytics computing. After watching the videos of the new SAP Business Suite Powered by HANA, we get the sense that SAP has come up with a cool new set of tools, but the burden of turning these tools into compelling business support applications is up to SAP installed base users and their IT teams.  It was rather disappointing to note that there is a foundation of business analytics but customers need to both license and develop their business support needs.

Turning to some other enterprise software influencers on social media, Dennis Howlett, blogger for ZD Net and Irregular Enterprise penned a commentary that acknowledges a polarization of opinion.  Video interviews of other bloggers such as Brian Sommer, Ray Wang and Jon Reed further contrast both the positive and not-so-positive aspects of the announcement.  While our readers can form their own opinion, the summaries point to a promising new technology platform that lacks specifics, compelling business proposition as well as pricing details. There is a belief expressed that SAP is relying too much on system integrators and/or customers with the burden of developing compelling business applications on the new Business Suite platform. In his commentary, Howlett takes some issue with enterprise software blogger Vinnie Mirchandani’s posting, Here Comes the Gold Stack. blog commentary. (This author has come to enjoy Vinnie’s views and has contributed a guest posting on his Deal Architect blog).  We believe Vinnie’s commentary makes good points especially about vendors constant needs for customers to chase the technology stack.

Rather than prolonging the enterprise level debates, we will summarize the takeaway for SAP focused supply chain functional and IT teams.

SAP Business Suite Powered by HANA is yet another building block to SAP’s road toward market differentiation, and another strategic step in allowing customers to upgrade SAP functionality with less business disruption.  The proposition that SAP wants to be both a database and applications provider is too biased toward justifying SAP’s business interest vs. the needs of its customers. IT teams are not going to inclined to rip out existing database platforms supporting multiple business needs beyond just SAP.  It is expensive, painful, and frankly not cost justified until SAP dramatically undercuts existing pricing.

The compelling business needs of supply chain applications rests in broader and more-timely supply chain wide and B2B business intelligence and predictive analytics.  That includes needs for enabling virtual B2B and collaborative sales and operations planning (S&OP) and supply chain control tower processes that synthesize both structured and unstructured information.  As we have stated in prior commentaries, SAP HANA certainly has the potential to meet these needs, but SAP has to lead the way by demonstrating that these applications can be implemented and supported on HANA at competitive cost and benefit for its customers. It needs to better synchronize its development timetables to the needs of its entire customer base, large global and mid-market, not just the goals of its executive and sales team.

Supply chain functional teams utilizing SAP are advised to take a wait and see perspective regarding this latest product announcement.  There is a need for a lot more specifics and demonstration of benefits.

Bob Ferrari

 

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