Is more SAP S/4HANA on tap in 2016? The experts weigh in

SAP S/4HANA was the big news in 2015, but what's in store from the vendor in 2016? Six industry experts discuss what they see on the horizon from SAP and its competition.

"Prediction is very difficult, especially if it's about the future."

--Niels Bohr, Nobel laureate in physics

Predicting the future of technology is not for the faint of heart, as evidenced by Niels Bohr's warning, but people can't seem to get away from it. It may be human nature to look back at the past and try to determine what may happen in the future.

SearchSAP editors wanted to know what might be up for SAP in the year ahead. The release of SAP S/4HANA was the major development of 2015, but SAP also had big announcements for cloud, the Internet of Things, small and medium-sized enterprises, and more. Will SAP S/4HANA start to become more than just an intriguing concept? Will the momentum for SAP HANA continue to grow? What are customers expecting from SAP this year?

We asked several industry experts for their thoughts on the products and technology trends they expect to see from SAP in 2016. And since the broader landscape of competitors and technology trends affects SAP, we heard about some of those as well. Responses came by phone and email.

Predictive index: CRM, connected cars ... and Garth Brooks?

Jon Reed, diginomica co-founder

Here are some of the things we might see in 2016:

  • SAP will double down on its attempt to redefine the CRM market. The words customer experience will be used more often in SAP keynotes than even S/4HANA.
  • SAP won't open source HANA, but it will open source a product no one is expecting to be open sourced.
  • SAP will announce a surprising and unexpected connected cars partnership.
  • SAP will have all its software as a service (SaaS) products, including SuccessFactors, running entirely on HANA by the end of 2016.
  • We'll hear much less about "running simple" in 2016, and more about "running digital."
  • By 2016 TechEd season, SAP will announce a much more aggressive and open approach to exposing APIs, primarily through the HANA Cloud Platform.
  • Of the product announcements made in the last three months, SAP Cloud for Analytics will have the slowest start in 2016. SAP Vora will surprise with its momentum, particularly connecting to Apache Spark for analytics.
  • SAP will announce that Garth Brooks is headlining the Sapphire Now concert. And the vendor won't change its logo or color in 2016.

Drivers of licensing

Duncan Jones, Forrester vice president and principal analyst

It's hard to predict what SAP will do, because sometimes the huge inertia prevents its leaders from seeing that change is required, and then implementing such a change. In my area of pricing and licensing, there are two major issues where I hope to see change next year, but I'm not sufficiently confident to actually predict it.

I think the "indirect access" scandal will become sufficiently high profile in 2016 that SAP's leaders will have to do something about it. SAP will have to rein in the license compliance group, or risk angering too many customers. Then, it will have to find a way to fairly monetize userless use of its software, and then persuade customers to accept a change to their contracts to reflect that new licensing basis.

I hope that SAP will also change the way it licenses HANA to make it possible for customers to switch their SAP environments to it. Currently, I would advise most customers to avoid HANA, because there is no visibility of the long-term total cost of ownership. Large customers have been able to negotiate acceptable deals, so there is a chance that those rare concessions will first become commonplace, and then be incorporated into the base model. The problem is the unclear dividing line between "runtime" and "platform," and the badly designed pricing model for the platform version.

Dig the new breed

Carl Olofson, IDC research vice president, data management software research

The advent of memory-optimized, columnar-compressed, database management system (DBMS) technology, such as SAP HANA, makes it possible for a new breed of applications to emerge. With these databases, you can not only run analytical queries side by side with transactions on the same data, but you can write applications that use analytical queries to make decisions about how transactions are to be handled, making them smart transactions -- not simply data-driven scripted operations. I expect such applications to appear during the course of the year, running on SAP HANA and on other DBMSes as well. There are implications here that go beyond technology -- they could force a fundamental rethink of the meaning of a business process.

Competitive landscape

Holger Mueller, Constellation Research principal analyst and vice president

  • SAP needs to show traction for S/4HANA with customer adoption and business use cases. They need to show why users should upgrade.
  • Oracle needs to show traction beyond human capital management (HCM), finance, CRM, supply chain management and the new order-taking capabilities. Oracle needs to produce large, complex enterprise automation in the cloud references in 2016 -- not "just" point solutions.
  • Infor needs to debut the new finance and HCM applications. Then, we will have to see how well Infor delivers and how many early adopters they can showcase in 2016.
  • Workday needs the adoption of its finance application to go up significantly. Their focus should be on joint finance and HCM customers, global expansion and references. Workday Student is set to debut, but how many early adopters will be there? Watch for more industry and other horizontal automation areas to be announced.

Data centered?

Stewart Bond, IDC director, data integration software

We will continue to see new innovations focused on big data, analytics and cloud data management. Data is core to organizations undergoing digital transformation, forcing the issues of data trust, availability, security and compliance to become first-class citizens in digital transformation initiatives.

I suspect we will continue to see innovations coming from the usual commercial suspects -- IBM, Informatica, Oracle, SAS and so on. SAP will likely continue to improve Vora for better connections between HANA and Apache Spark. Players such as Talend and Pentaho, which have come out of the open source community, have been active, as have vendors in the startup community. Expect Hadoop distributors, such as Cloudera, HortonWorks and MapR, to also bring new innovations either through their own development, enhancement of open source projects or through partnerships.

Gathering momentum

Cindy Jutras, Mint Jutras president

Many of the trends we've seen over the last couple of years will continue to gain momentum in 2016. These include:

  • Cloud. Fewer than 30% of organizations will even consider a traditional on-premises service for future purchases of software that runs the business. While hosted cloud remains an option, a true SaaS offering is pulling ahead in terms of preference.
  • Mobile. Many simply just take for granted access to enterprise data from a tablet or smartphone. We see fewer and fewer laptops on the road today.
  • Social. While the term social still has unfortunate connotations, most feel social capabilities are important -- if not must have. They might not call them social, but most find a consumer-grade user interface, enterprise search through structured data residing in enterprise applications, the concept of following business objects and capturing "conversations" about those business objects all very appealing.
  • Analytics. Whether you have big data or typical data, the ability to analyze that data iteratively to predict and prescribe outcomes is becoming less of a luxury and more of a business necessity.

The digital economy is a common thread throughout these trends. While many industry observers have been touting digital transformation for some time, all this talk has been pretty fluffy. It's time to bring that digital discussion down to earth and connect it to the reality of running the business -- both in terms of (electronic) transactions, as well as collaboration internally and externally.

Disruption will also be a key factor moving forward. The world of consumer products and services has been disrupted by the likes of Uber, Airbnb and even earlier, Netflix. Many industrial businesses feel pretty safe and protected from that level of product and business-model disruption. Those that felt safe are in for a rude awakening. New innovative products, services and entire business models are about to hit the world of industrial products. Companies still operating on old, rigid business services will not be able to respond quickly enough and will be in jeopardy. This will force them into the digital transformation they have been insulated from.

Next Steps

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