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SAP cloud strategy makes new strides, but HANA platforms need clarity

The SAP cloud strategy has made new strides toward industry-specific applications, but the vendor's cloud offerings on its HANA in-memory database technology still need clarifying, according to an industry analyst interviewed in this video from the Sapphire Now 2014 conference in Orlando, Florida.

"SAP'"s cloud strategy is evolving," says Holger Mueller, vice president and principal analyst at Constellation Research. "Every Sapphire we learn more. I think they have to clarify what is the HANA Enterprise Cloud -- which is usually the custom solutions, the hosted solutions -- versus the HANA Cloud Platform, where the new applications are built, and how the two work together.

Mueller also addresses SAP's migration of its flagship Business Suite ERP platform, which was announced last year amid questions from users and analysts about whether the entire suite made the transition without any disadvantages. Mueller was confident in the software's performance but questioned how much it matters to SAP users.

"It's always there, and then there's a little bit missing, but I think they're really pretty much there," Mueller said. "The question is … what is the value proposition for a customer to run your suite on HANA. As someone said before, speed is just a number. What am I enabling in better business processes to justify an investment?"

With developments in the SAP cloud strategy being announced at this week's conference, seven months after archrival Oracle did the same, Mueller was able to give an update on the competitive picture.

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"SAP has a slight advantage because they had HANA as an in-memory database," he said. "Oracle's 12c memory option should be generally available soon. It will be interesting to see because most SAP customers run on an Oracle database."

During the Sapphire Now opening keynote, SAP also announced it would no longer charge for its Fiori device-agnostic graphical user interface (GUI) technology, which developers including SAP can use to create more user-friendly screens for ERP and other enterprise applications.

"It's a good move by [SAP CEO] Bill McDermott and his team," Mueller says. "Customers have a tough time with IP [intellectual property] maintenance. What kind of innovation do I get for that?

Nonetheless, questions remain about how SAP users can really take advantage of getting the free Fiori GUI and development tools.

"It's all new technology. We have to look into the details -- I don't want to start any speculation. There's probably going to be a HANA database price tag," Mueller says.

"Maybe it's really free, but then the implementation is there. There are a lot of sunken costs."

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