SAP’s announcement that its Business Suite applications, which are deeply embedded in many global enterprises, will now be able to run on its in-memory database technology, HANA, leaves the IT community with a very interesting decision on its hands. SAP is the first vendor in the market to fully combine transactional applications with analytics in-memory and has two to five years, according to some analysts, to sell to customers before other vendors catch up.
However, will SAP be able to convince enterprises that its technology is so innovative that it is worth the pain to migrate legacy systems away from the likes of Oracle, IBM and Microsoft?
Computerworld UK spoke to Donald Feinberg, VP and distinguished analyst at Gartner, who explained the significance of the announcement for IT managers.
“Until now, this has been impossible to do. The structures that are needed in a disk-based database system are different for online analytical processing (OLAP) and online transactional processing (OLTP). However, what has changed now is that you have got a database in-memory where you can create OLAP structures virtually,” said Feinberg.
“Now SAP can set up a database to do my transactions and analytics with everything virtual. People have wanted to do both in the same database for years, but have not been able to do it because of the discrepancy between the two types of data.”
He added: “From that standpoint, it’s unique in the market.”
However, Feinberg highlights that SAP has ‘not put a man on the moon’. All the other vendors are working on this technology – SAP has just got there first. This is an advantage, but Feinberg expects SAP to remain hesitant about the technology due to its critical nature within an enterprise’s infrastructure.
“These guys are first, period. That’s a good thing. They have got a two to five year head start on everybody else and once this becomes generally available and the market momentum for it begins to pick up within the SAP customer base, then yes it’s a huge advantage. But, you need to remember that this is in ramp-up right now,” he said.
“I expect that this is going to be in ramp-up for a while, because it is a mission critical system. If Business Suite on HANA goes down, the business is in trouble. This wasn’t the case for Business Warehouse on HANA because it changed the Business Warehouse processes from hours to seconds, and days to minutes. If Business Warehouse goes down for a while, I’m still days ahead in some cases.”
He added: “But if Business Suite on HANA goes down for an hour, I’ve got a problem, I can’t run my business.”
But what does this mean for Oracle and other database vendors in the market? Feinberg believes that it depends on their customer’s infrastructure. If an enterprise is running SAP Business Suite applications on an Oracle or IBM database, then those vendors should be worried.
“I think this is going to be disruptive to other vendors, as I think it’s going to propel SAP from a database standpoint. It’s going to put them on the map – today they are number four in the market, and a small number four at that,” said Feinberg.
Gartner’s figures put Microsoft at third in the database market, behind Oracle and IBM, with 18 percent. SAP is currently at five percent market share in fourth place.
“You now have SAP Adaptive Server Enterprise that runs underneath the applications, and they also have HANA. I suspect that you are going to see people moving from Oracle, IBM and Microsoft over to these. They just couldn’t do it before now,” he added.
“Oracle today does not have a transactional, in-memory database. They have TimesTen, but none of the main enterprise application packages (SAP, Infor or Oracle’s e-business suite) run on this. I don’t believe SAP will ever certify an in-memory database for Oracle applications (when one is released) and so what you are asking is: will Oracle lose SAP customers that are running on Oracle databases? The answer is yes.”
Duncan Jones, principal analyst at Forrester, agrees with Feinberg and believes that this announcement ‘sets SAP customers free from the clutches of the other database vendors’.
He said: “If it works, as SAP plans, it will be very damaging for Oracle. Oracle has some great products, but it does a lot of things to annoy its customers. There comes a point when you can only annoy your customer base so much, and if they are given an alternative that works, many of them will embrace it.
“Oracle overcharges, they are very aggressive in the sales process, they don’t necessarily negotiate, they have obsolete licensing rules, and they sell customers products they don’t necessarily need. If a CIO is desperate to save money, they might see SAP HANA as a way to do that.”
However, although the analyst community seems fairly optimistic for SAP that it may steal some customers in the database space, will enterprises running Oracle e-business suite applications be tempted to migrate entirely to SAP Business Suite on HANA, given the real-time benefits that can be achieved from operating in-memory? It seems unlikely.
Tim Jennings, chief analyst for enterprise IT at Ovum, said that companies are typically an SAP shop or an Oracle shop, and this is unlikely to change. However, what it will do is drive Oracle’s customer base to push for a release of a similar technology from Oracle.
He said: “I think in the medium term this ups the stakes for incorporating analytics into the core ERP, core transactional systems, so I think Oracle customers will be eyeing this up and asking Oracle what their response to this is.”
Gartner’s Feinberg generally agrees. He believes that for deeply embedded legacy applications, large enterprises will not consider the move – they will just wait for Oracle to come up with something similar. “Changing my DBMS platform underneath SAP is not that disruptive to the company, but changing my applications from Oracle to SAP, that’s expensive. I have to retrain everybody, I have to change all my data – it’s time consuming and disruptive.”
However, Feinberg does suggest that there is a ‘catch’ for Oracle, in that it may miss out on two to five years of SME companies growing out of their JD Edwards or PeopleSoft applications, and instead of renewing their licences with Oracle e-business, looking to SAP Business Suite on HANA.
“If I was a small company running on Oracle today and I grow and I need to replace my applications, that’s a risk for Oracle. If I have got a business case for making the transition from one set of applications to another, that will then mitigate the expense and the disruption,” he said.
SAP is making Business Suite on HANA available as an enhancement pack for companies that are already using the in-memory database technology, which means that there will be no additional cost. However, Business Suite customers that are interested in putting their applications in-memory, but do not have a HANA database, will have to license for one.
SAP has also insisted that it will continue to ‘remain open’, in that it will not only continue to support Business Suite on non-SAP databases, but it will also continue to optimise the code for them.
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