SAP's big challenge: Prove the business case for Hana

Licensing concerns are a key stumbling block on the way to S/4Hana, a new study found

SAP's S4/Hana at Sapphire Now 2015

SAP's S/4Hana was on display at its Sapphire Now conference in 2015.

Credit: SAP
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SAP needs to do a better job of convincing customers that adopting its Hana in-memory computing platform is worth the investment, according to the Americas’ SAP Users’ Group (ASUG).

There is good news for the company: The proportion of customers that have bought Hana is up to 45 percent this year compared with 40 percent last year, according to ASUG's second-annual member survey on SAP Hana adoption.

Most Hana users also seem to be satisfied: 90 percent of the group responding on that point said their most recent Hana implementation met or exceeded expectations.

SAP has essentially bet its future on the five-year-old Hana platform, so numbers like that clearly reflect at least some progress in the right direction.

The companies that haven't yet bought into Hana, however, had plenty to say. First and foremost, nearly 60 percent said they're still not seeing a compelling business case to justify the investment. That's down from 75 percent in the 2014 survey, but it remains the top sticking point, according to the report.

An unclear migration path was also a stumbling block for some, as was the need to first catch up on SAP upgrades or enhancement packs. Time and budgetary issues were also on the list.

Licensing issues were a particularly hot concern when it comes to S/4Hana, the Hana-based enterprise suite SAP released earlier this year.

While S/4Hana could accelerate Hana adoption and has already attracted customers' attention for its real-time analytics capabilities, in particular, more than a third of respondents are still in "wait-and-see" mode, according to the report.

"The licensing structure of the unfolding S/4Hana products is currently not well understood," wrote Kevin Reilly, ASUG's S/4Hana community advocate. "No successful CIO can sleep easy at night without knowing all of the ramifications of the cost/benefit calculations around any product."

SAP needs to clarify its licensing structure in order to convince many “wait-and-see” customers to "hop on board the S/4Hana train," he added.

Finally, SAP's Hana Cloud Platform is still struggling to attract interest: Only 14 percent of respondents have tried it out yet, the report found, confirming similar results from DSAG, the German-speaking SAP User Group, a few months ago.

ASUG's survey was conducted in September and October of this year and drew 1,253 respondents from a wide range of companies. The full report -- including also a response from Steve Lucas, SAP's president of platform and analytics -- is available as a free download for ASUG members.

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