Does SAP HANA replace SAP Business Warehouse?
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In a word, no.
The two products address two different needs. HANA is designed to be a superfast general-purpose database and application platform, while BW is an application that operates as a toolkit for building and maintaining data warehouses. Determining which product makes sense for your use case is a big topic, but I give an overview of the decision making process in this article on how the choice between SAP BW and HANA depends on your data management needs.
Despite addressing two different needs, SAP BW can benefit from SAP HANA, and vice versa. SAP BW needs a solid application platform (currently NetWeaver ABAP fills the role) and a fast database, especially for analytic workloads. HANA fits the bill here. Meanwhile, companies developing data marts and data-centric applications on HANA will eventually begin to feel the pain of managing a large and diverse data environment. BW's data warehousing capabilities can help here.
The "BW on HANA" version of BW is already becoming quite intertwined with HANA, leveraging HANA's capabilities to provide features that are not available when BW is running on other databases. Slides 52 and 53 of the BW 7.4 SP5 roadmap presentation give an overview of the situation, but the whole presentation is worth a detailed read. I expect that over time the two platforms will continue to become more intertwined. The article How SAP BW and HANA will merge over time -- and why it matters walks through some of the possible ways the two applications will come closer together.
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