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Analyst Holger Mueller says SAP is smart to stop trying to compete as a cloud infrastructure provider so it can leave that job to cloud providers and focus more on applications.
SAP public cloud options are expanding, as the enterprise software vendor forms new partnerships with public cloud service providers such as AWS, Google and Microsoft, while deemphasizing its own cloud infrastructure products.
This major shift in emphasis, along with new SAP public cloud offerings, came to light at the SAP Sapphire 2019 conference early this month. In a podcast recorded at the conference, Holger Mueller, vice president and principal analyst at Constellation Research, gave his take on the conference news.
"Hasso Plattner was much more adamant about the cloud," Mueller said. "He even thinks the ultimate adoption of S/4HANA is only going to come when people move to the public cloud." In a Sapphire Q&A with analysts and the press, Mueller recalled Plattner saying the SAP public cloud options also allow faster release cycles for SAP applications compared to the slower cycle of on-premises software, which made it too easy for customers to opt out of the on-premises releases.
SAP public cloud partnerships vs. Oracle cloud stack
SAP's move away from being a cloud provider contrasts sharply with that of archrival Oracle, which has been building out an entire cloud "stack" -- calling it Oracle Gen2 Cloud -- and touting its commitment to cloud infrastructure.
"Oracle's a different story because [CTO Larry Ellison's] vision is to build the IBM stack of the 21st century, from the custom-design silicon for certain loads -- which Oracle owns from the [Sun Microsystems] acquisition -- all the way from [in Oracle's words] 'the chip to the user click stack,' through all the layers," Mueller said. In comparison, SAP has "scaled down" its platform-as-a-service ambitions of several years ago.
HANA Cloud Services was perhaps the biggest SAP public cloud offering introduced at the conference.
"The big news was the data lake behind that," Mueller said, referring to the concept of HANA database "spaces" that Plattner explained in his conference keynote. "They're kind of like practical data marts for people to build things. The problem with HANA in memory is you have your transactional system running, and now the marketing guys are trying to load Twitter data and other stuff into that." Having separate spaces to isolate such applications helps to maintain adequate performance, he said.
Ultimately, SAP's move away from cloud infrastructure makes sense, according to Mueller. "Customers want them to build software," he said. "They have so many things to do, they shouldn't distract capital investment for infrastructure and data centers and areas which they don't understand and can be done by other people who do this for a living."