As SAP HANA and Syclo continue to gain traction in the Asia-Pacific Japan region, they are proving to be the catalyst for SAP to bring new customers into the fold. Freya Purnell and Eleanor Reader report.
Since its launch in December 2010, SAP HANA has typically been adopted for one of three use cases – by SAP Business Warehouse customers, who are looking for a boost in performance, by customers implementing a HANA-specific application, such as Profitability Analysis (CO-PA) or Business Planning and Consolidation (BPC), or by customers seeking to use its real-time capabilities to do something completely new.
According to Anthony McMahon, senior vice president, database and technology, SAP APJ, those in the latter group – tempted by the transformational benefits of the platform – are typically not SAP customers, creating the opportunity for the company to broaden its footprint.
“It could be an Oracle or custom application, and they are just frustrated with either what they can’t do, or there is a market factor that is driving them to do something different,” McMahon says.
This trend is helped along by the fact that SAP has been committed to ensuring HANA is seen as a next generation application platform that is not just limited to SAP customers, but can support customers running a diverse range of solutions.
“The risk then is that the technology will be constrained for what the potential is,” McMahon says. “The way that many customers today are going to market is changing because of social, the cloud, and mobility, and the way they run their business has changed. It’s not all going to happen in SAP and that’s what we want HANA to enable, otherwise we are going to restrict ourselves.”
Australia has proven to be a fruitful market for SAP HANA, with five of the top 10 largest deals in the region coming from our shores.
In another positive for the Australian market, SAP has also recognised that it needs new consumption models for HANA, so that the platform is accessible for a wider range of customers. Two business models already exist – a perpetual licence direct from SAP for large projects, or purchasing by the hour through Amazon Web Services.
SAP is now working with partners on a consumption model that will be suitable for mid-market enterprises, who may have thought HANA was out of their reach.
“We are working through that model right now. I’m not saying it’s going to be cheap, but as long as it delivers the business case, then they will use it, and they shouldn’t have to feel like they have got to outlay millions of euros or Australian dollars to get that technology,” McMahon says.
Suite on HANA breathing new life into ERP
The focus has now shifted, of course, to the launch of SAP Business Suite powered by SAP HANA. The first two ramp-up customers in APJ were India’s Avon Cycles and Bangkok Airways with another 20 customers in the region also signing up for ramp-up. While the momentum is building, McMahon is not necessarily expecting a huge revenue spike from the release.
“It’s a major breakthrough, but the actual revenue we are going to generate from it is not going to be significant. We are pricing it the same way they might get an Oracle transactional database, which is 15 per cent of the software maintenance value, but it’s going to change the way that they are using the ERP system today, and it’s going to also change the way that SAP is developing the future generation of what ERP will look like, knowing now that we can do the analytic piece and the transactional piece in real time,” McMahon says.
Whether customers should consider Suite on HANA really depends on what is motivating the move.
“If you are a brand-new SAP customer, you might as well go straight to HANA. For an existing customer, it really is a conversation on what area you are looking to improve – is it supply chain, is it CRM, is it materials management? What business process do you get an advantage from, or how are you going to change the way you operate, because the fact that it runs faster in real-time is interesting but it’s only relevant if they are going to do something differently.”
The role of Sybase
With so much focus on HANA, the Sybase portfolio has been somewhat overshadowed in the data platform space.
“What we have been doing both in our roadmap and development, and our discussion with customers is positioning what we call the real-time data platform, which is really a combination of all that great pedigree from the Sybase assets with HANA at the core,” McMahon says.
He says SAP has been working with customers to ensure they understand the respective benefits and applications of the standalone ASE and IQ products, but that they have also tried to bring the best of what those solutions have to offer into HANA.
“We are trying to build in either integration components or capability that were in other parts of the Sybase portfolio and make those native in HANA, so you take the complex end-processing and filtering technology that came from Sybase.”
The recent release of IQ 16 is the result of continued investment in the Sybase products, and McMahon says that without the push towards big data in HANA, the IQ development path may have been different to its focus on building a near-line storage capability.
“It’s the core of the real-time platform, but it’s an acknowledgement that these assets have to operate and compete. It’s been a good story for existing Sybase customers, and I think it’s a good story for people migrating from competitive database products that have already bet on the application piece with us,” he says.
Mobile momentum
Australia has not only been fertile ground for HANA, but following the Syclo acquisition a year ago, Australia has also been the best performing country globally for SAP’s mobile business.
Eight of the top 10 mobile deals in Australia over the last year came from the Syclo portfolio, reflecting the strength of asset-intensive industries in Australia, such as utilities, transportation, and oil and gas. This is motivated by a desire for efficiencies, particularly in industries with capital expenditures, and also a continued drive for risk management around maintenance.
But the maturity of the Australian market, and a willingness to try new things, is also creating this momentum.
“Everyone is talking about what they are going to do with their customer’s customer, or what they are going to do differently to enable their partners or their employees to interact and interrogate the data and the systems they have,” McMahon says.
“Smartphone adoption is probably faster and more entrenched in the way people do business in markets like Korea, however Australia is really embracing the tablet side and using that to see how it can differentiate their business.
“When the NBN comes out as well, that is going to encourage new business models. There is a certain amount of competitiveness and expectation that comes out of the Korean market, which is premised on the fact that the fastest broadband and highest adoption.”
