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A number of deployment options for SAP HANA and S/4HANA are available, including public cloud, private cloud, on premises and varieties of hybrid options. SAP organizations have been cautious about adopting HANA in the cloud, but that approach appears to be changing.
Research from U.K.-based SAP consultancy Centiq indicated that confidence in HANA public cloud adoption is stronger than expected. In this Q&A, Centiq CEO Matt Lovell discussed the current state of HANA infrastructure landscapes and why organizations are using HANA as a platform for innovation.
What does Centiq's research say about the current state of HANA and S/4HANA adoption?
Matt Lovell: There's a significant acceleration of S/4HANA adoptions by customers and also the volume of projects that have gone not just to the public cloud, but all-in on public cloud adoption. I think that surprised us. In our first report 16 months earlier, customers had indicated quite a cautious approach to public cloud adoption for SAP landscapes and services -- to 16 months later, being all-in in terms of production and nonproduction to the cloud. We found that cloud-first is a wider organizational strategic adoption that includes SAP, so we're seeing infrastructure teams assisting and leading SAP applications business teams by saying, 'We will adopt cloud for core services' and because a lot of dependent services SAP is relying on are already working comfortably in public cloud.
So, in some ways, it's an overall IT approach, and HANA is being brought along?
Lovell: Yes, it is, absolutely. Business is also seeking to drive out more value [in] real time from the data it holds in disparate data sources. [Businesses don't have] a platform to do that, and HANA is that answer. Organizations are digitally transforming and trying to deliver back to the business real-time decision-making and real-time analytics, but all of that now is absolutely pivotal to what organizations are trying to achieve. That has really strengthened the business case behind HANA adoption and the acceleration of HANA applications and the use of HANA from different data sets and databases.
It's kind of a chicken-and-egg situation. Are organizations finding uses because they have HANA, or are they looking at business problems or goals and saying HANA is the right platform?
Lovell: It's a little bit of both … SAP used to speak of their products in very technical and application terms. Now, it's very business value-oriented, where the customer is the hero and they say what HANA has done for this customer in this vertical. There's much more confidence growing in the fact that HANA can solve these problems in organizations, and therefore, it's accelerating adoption. Equally, you're seeing customers on the HANA platform see so much more with HANA. They're spreading the word even between the market competitors, as many of them meet at user groups and share information on what works and what doesn't. Many more customers are preaching the merits and benefits of HANA and what it's done to integrate disparate data sources to solve really complex problems that previously IT or the business couldn't solve.
What are some of the challenges of migrating to HANA or S/4HANA, and what are some of the differences between the two?
Lovell: The answer has two parts because customers' requirements for HANA typically are related to reporting and data analytics real-time processing, whereas S/4 tends to be the migration of much larger and much more complex heritage embedded platforms that run finance, CRM, SCM [supply chain management], manufacturing and logistics. They take much longer to migrate and have a much different set of dynamics around them. Customers have to rewrite applications to work within HANA, and they're getting more familiar with the approach for that.
Why is migrating to S/4HANA more difficult?
Matt LovellCEO, Centiq
Lovell: When you consider the migration of ECC [ERP Central Component], ECC is made up of so many different moving parts. There are often tens of thousands of processes in an average landscape, and those have to be transformed, as well as the application stack. That typically means that customers need to do a lift and shift, which doesn't always result in the optimal environment because you're lifting and shifting all of the existing processes and their problems and constraints straight into the cloud. Customers don't realize the benefits that they thought they were going to get in terms of performance improvements or real-time capabilities because the limiting factor is the process rather than the platform. You also have customers that have to transform their processes, and that needs skills -- their business skills or IT platform skills -- that look at smarter ways to break those problems down and determine how these existing processes can be automated, codified and simplified. Those projects are typically one to two years because not many customers lift up their entire ECC landscape and make S/4 a direct replacement.
What would you say is the current state of HANA and S/4HANA deployments?
Lovell: There's a significant increase in customer confidence in both HANA and S/4HANA and how they can support organizations to transform digitally and transform in terms of real-time responsiveness and capabilities. There's also an increase in the confidence and trust in public cloud adoption for HANA and the benefits that organizations are realizing from taking that approach. This is accelerating and exciting organizations to innovate and accelerate other digital programs and initiatives. However, whilst all these projects are going on, many organizations are still experiencing significant skill shortages in the new platforms, particularly as customers go to the cloud. The cloud is generally not just HANA, but HANA's obviously implicated in all that, and the management of the platforms is quite different than traditional SAP. You have to look at a different set of tools and different areas of optimization, and many customers who don't do that often experience increased costs because you've got to learn how to manage the environment, the platform and the services differently.