SAP NATION 2.0AN EMPIRE IN DISARRAY

- BHAUMIK OZA

Prof. Nozar Daylami

California Lutheran University

CHAPTER 1THE END OF HISTORY?

• Chapter 1 takes an in-depth look at SAPs product portfolio applications implemented at its customers and the diversity in its partner ecosystem.

• The author has compared “SAP Nation”(the term used for the companies vast ecosystem) with the eastern bloc of the 1980s .

• Its states that SAP has created about 50 Products over the last decade.• SAP has also released over 50 country-specific SAP Business All-in-one

baseline solution for the Latest SAP-HANA.• There are over 50,000 small companies which rely on SAPs Business

One.

Introduction to SAP

• As SAP says that over 7000 customers are using HANA, author Vinnie M. states that the majority of the 300,000 customers are still using database from Oracle, Microsoft, IBM etc.

• So SAP provides support for various Oracle Database Versions as there is a diversity in those systems which will continue as customers won’t change their system management and Infrastructures with those databases.

• Analyst Liz Herbert wrote about the diversity around HANA product and their client struggles for rapidly evolving landscape of HANA.

• Customers find SAP with “Multiple personalities” like “HANA SAP“ or “networks SAP”

• CEO Bill McDermott tries to convince by saying that “ SAP will remain ever strong in the core as there are many global businesses that run on that core”

Introduction to SAP (Cont’d.)

• In 2015 at SAPPHIRE NOW, SAP Announced a new CRM solution for which SAP claims to have 17 Million users but the author says “this merely contributes for 1-2% of its total revenue”.

• SAPs success in the 90s came because of its R/3 product which was said to be a truly transformational time for the technological industry.

• Next, there are sprawls around SAPs core applications for its customers with the diversity in the Satellite apps run by SAP clients and their millions of lines of customized code.

• With the Significant growth of SAPs partner ecosystem, they announced that they have 13000 partners and Fiori and HANA consultants.

SAPPHIRE NOW

ABOUT THE CEO:-• Bill McDermott CEO, of SAP Enterprise is said to be a positive, inspirational

leader who is driven to take SAP to greater heights.• He was born to a working class family in long Island. He wrote his whole

story in a book “Winners Dream”, which describes his struggle to which people always admire about.

• Some SAP employs we highly impressed by McDermott for his growth in the past decade.

• He can inspire the “Underdogs” in SAP Nation to tackle the sprawl challenge and prove his ability to generate new revenues.

• It is said that if SAP focuses more on its Delivering or promise rather than new sale, It could create a legacy at SAP can become the “End oF History”

CHAPTER 2ONE MORE THING

• Chapter 2 looks at the rolling launch of S/4 HANA, details of which have been dribbling out over the past several months.

• The author states himself as a person who enjoys topics to write about the births of new products and innovations .

• The author finds that consumers are more reckless with their current products and less concern about the loss or damage done by the new appealing products upgrades.

• So when McDermott announced a next-generation product in February 2015 which was a biggest launch by SAP after 23 years, Author Vinnie Mirchandani was too excited for it and started to do some research on it.

New York S/4 Launch• McDermott Introduced the new S/4 HANA at NYSE, a new product by SAP

for which they commented “end of 20th century IT Stack and its complexity”

• He summarized S/4 as a reinvent of their precious core R/3 product. • S/4 HANA – where S stands for Simple, 4 for fourth generation & HANA

stands for in-memory, real-time, High Speed never before achieved. It’s a Game changer.

• Dr. Plattner, Executive Board Member gave a presentation on SAP HANA for 45 minutes. However, they have elaborated their passion for in-memory computing in a Book.

• “In-Memory Revolution : How SAP HANA Enables Business of the Future”

FACTS OF SAP HANA• Dr. Plattner describes some facts about

SAP HANA in his book as:-

1. Data Entry is 3 to 4 times faster.

2. Analytics is 10 to Thousand times faster.

3. Less Database Administrative work.

4. Data Footprint of 1/10.

5. Unlimited Workload capacity.

6. Reduced amount of derived data, Hence less storage requirements.

• Yet, the image SAP left in New York was that S/4 was just an essential Upgrade .

REVIEWS AND RESULT AFTER LAUNCH:-• SAP was not able to fully convince customers with their new product• Customers got confused as their questions were not answered and New

Questions got raised.• SAP started to answers those questions on the openSAP courseware and a

series of blog posts and related clarifications.• SAP only focus on Finance, Fiori and HANA which are the product

elements which were discussed in an eBook.• SAP confirmed that all the S/4 deals are on premise• A survey suggested that 63% companies intent to adopt SAP HANA in UK

whereas 68% companies in the USA.

THE ORLANDO “RE-LAUNCH”• With the increase in public interests and popularity, SAP needed to come

out blazing with details at its annual SAPPHIRE NOW event.• Bill McDermott who is stated as the best software salesperson presented

the S/4 HANA for about 45 minutes.• He chose his staff to demo a travel expense management product.• SAP tired to convince companies who are large application vendors to get

big initiatives in companies future plans• SAP emphasized on the scope and capabilities of HANA for 25 industrial

products and focus more on mobile apps.

PRESS CONFERENCE• SAPs Development teams states that they worked hard to make the 25

industry code ‘Runs’ with S/4 HANA and not crash.• SAP also confirms Limited cloud based service options for companies.• SAP is facing problems for ready-to-deploy functionality for its Flagships. • Other Topics Discussed:-1. Strategic Industries2. Disproportionate Investment3. Customer Expectations4. Incubation Industry

THE “ROLLING LAUNCH”• SAP started accelerating S/4 Adoption in the customer base.• SAP claims to have 900 S/4 HANA customer in its 2015 reports.• Simple Finance is Highly in demand which has been talked about a year.• Increase in granularity amongst the layers of HANA Databases.• The launch of SAP S/4 HANA creates more questions for SAP Users that it

answers.• In the next chapter, we will look at many of the questions that SAP will

need to address as the S/4 rollout continues to unfold.

CHAPTER 3AS SIMPLE AS POSSIBLE BUT NOT SIMPLER

SIMPLE AS POSSIBLE

• Albert Einstein’s enigmatic quote “Everything Should Be Made as Simple as Possible, But Not Simpler”• SAP tries to make it new S/4 HANA to Run Simple.• Chapter 3 explores many of the questions that keep

coming up about S/4 that SAP will need to address.

QUESTIONS ABOUT SAP HANA WHICH WERE ADDRESSED:-1. When will SAP catch up to functionality that reflects dramatic changes in every industry?• S/4 will make-up for its predecessors, Business Suite, which has been

lacking functionality.• SAP worked on SCM and CRM functions which were not kept with social

and digital marketing.2. When will the SAP environment be truly “simplified”?• S/4 has amplified its “simplification” talk and it is imploring customers to

move back to standard ABAP with extensions in its HANA cloud platforms

3. When will the SAP cloud become World-Class?

• S/4,SAP started to promise benefits of its public cloud with more rapid releases a year up to four.

• SAP has invested $20 billion in acquiring public cloud vendors.

• SAP says that the count of 400 S/4 customers grew to over 900 by the end of the quarter of 2015.

4. How do we mitigate the risks of adopting HANA as a transaction database?

• Customers were Nervous to use HANA as a transaction Processing.• R/3 did not use database-specific features like Stored procedures• In S/4, SAP is Moving logic from the application layer into the HANA database. • The application code is being simplified dramatically and with that the

transactional performances increases accordingly.• HANA also provides the latest resilience and disaster recovery thresholds

needed for heavy transaction processing.

5. WHAT ARE THE ECONOMICS OF MOVING TO S/4?• Dr. Plattner announced at New York Launch “The total cost of ownership

goes down, the response time improves and flexibility increases”

• SAP Business Suite customers need to purchase the S/4 HANA License to run the new S/4 HANA .

• Cloud Services pricing model will be subscription-based

6. WHAT WILL SAP DO ABOUT ALL THE SPRAWL?

• As we looked at the Sprawls in SAP’s product portfolio, they state that “SAP S/4 HANA edition does not replace their existing line-of-business solutions”

7. NetWeaver Restored?• SAP NetWeaver provides Foundation for Business Suite and many products fall under NetWeaver.

• SAP organized the portfolio of applications, utilities and tools.

• S/4 may similarly evolve like NetWeaver over the next few years

CHAPTER 4MISSION ACCOMPLISHED

• Chapter 4 delves into two decades of enterprise software vendor attempts at next-gen products.

• We will look at projects at Infor, JD Edwards, Microsoft, Oracle and SAP itself.

• How will S/4 reflect the sum of all these previous industry experiences.

THE ORACLE FUSION EXPERIENCE• Floyd Teter, a respected member of Oracle ecosystem and an ACE Director and

Active participant in Oracle User Groups.• He Described Fusion as a Software which needs only a few clicks to get the

information you need.• The oracle fusion was built around familiar tools – Browsers, MS office and used

most oracle platforms.• But Fusion had some complex technical footprint, especially with the

middleware.• It was also facing international regulatory compliance and currency support

issues.

SOLUTIONS TO THE ORACLE FUSION• Fusion requires a bottoms-up design, by starting with what was

already in place and re-architecting to build a sturdy foundations.• Enterprise tools don’t achieve full utility until they have been used for

a while.• This becomes better with use as errors are discovered through broad

usage and this is how the code is tested.• Developing Fusion involves a rearrangement and reorganization of the

entire business to take time to mature.• Hence, Oracle is back with Fusion after long-delay and today it has the

widest set of cloud SKUs.

THE JD EDWARDS ONEWORLD EXPERIENCE• JD Edwards experience was to migrate its ERP solutions from its IBM AS/400

platform to open, Client/Server world.• OneWorld was a open version of a project by JD Edwards which was meant to help

deliver to the higher top line expectations of a Software company.• OneWorld was designed with object-oriented principles and was good for

reusability of objects.• Looking back, there were several mistakes like the software tried to emulate

AS/400 version .• The new systems had bugs and scalability issues and were solved in cycle of

patches and fixes.

JD EDWARDS ONEWORLD CONTINUE…• The software were highly complex to install, So engineers were

brought into for implementations.• Complexity was solved by putting stress on constrained resources

with knowledge of the new technology.• Customers also needed to wait for the software to reach stability and

for critical support to implementation• Being at public stage, the company was having a topline revenue

results.

MICROSOFT’S “PROJECT GREEN”• Microsoft was a leader in mid-market ERP vendor in US by acquiring

Navision which was a leader in Europe.• Microsoft also acquired 3 more ERP companies I.e. Axapta, Solomon

and Great Plains.• Microsoft wanted to Integrate all the products to be purely with the

Microsoft technology stack.• Project Green was aimed to convert the four products to a unifying to

a single code base.• It was found that customers were not eager to face a major upgrade

or a migration to a new product.

“PROJECT GREEN” CONT’D• Project Green did deliver some similarities in look and feel and common

reporting capabilities across products.• It doesn’t make them one code base, but it does make them close to one

another.• Microsoft rebranded all its ERP products as Dynamics

1. Axapta Dynamic Axapta.

2. Great Plains Dynamic GP.

3. Navision Dynamic NAV.

4. Solomon Dynamic SL.• Hence, Microsoft Converged all their ERP companies and products.

SAP NETWEAVER

• SAP had attempted NetWeaver as a next-gen product in 2003 as a challenge to come up with company’s new technology stack.

• NetWeaver is Based on Web services and can link applications and data source.

• It allows companies to use their existing IT investments and exploit the power of Web services.

• SAP faced problems with the Customers adoption was slow and their passion for it started to cool.

SAP NETWEAVER CONT’D• SAP released a new version of NetWeaver in 2010 which was

NetWeaver PI.• NetWeaver PI was capable of handling heavy tasks which became an

umbrella for many SAP tools and Solutions and attracted customers.• SAP conformed in Press release that they had 200 new customers for

NetWeaver PI.• SAP NetWeaver PI claims to have grown 10 times since the first half

of 2006.

S/4HANA- THE SUM OF ALL INDUSTRY EXPERIENCES?• The threats to the next-gen projects is that in the enterprise world as Products

take years to Develop and Mature.• SAP has a large number of development employees for the S/4 product creation

process to be quicker.• SAP faces many cultural problems as they moved to a platform company with

years of Focus on NetWeaver followed by HANA.• S/4 HANA uses the same pattern as BusinessByDesign(BYD) so it needs more of

an application culture.• Hence, If S/4 HANA evolves into a proven and fully functional platform and

support clients and increase the GDP of SAP Economy

THANK YOU FOR YOUR TIME…