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SAP lays out its strategy for growth, with HANA at the forefront

The HANA in-memory computing platform will figure into everything SAP does, executives say

By Chris Kanaracus
February 4, 2014 05:20 PM ET

IDG News Service - SAP's strategy event for the investment community on Tuesday offered few major surprises to anyone who's been closely monitoring the software vendor lately, but did serve to cement the company's future direction for product development, growth and customer retention. Here's a look at some of the highlights of the event.

Five ways to win: SAP is now centered on five product categories, namely cloud computing, database, mobility, analytics and enterprise applications. Together, they represent a $350 billion market opportunity by 2020, co-CEO Bill McDermott said during the event.

SAP will lead its sales efforts with cloud computing, according to McDermott, who takes over as sole CEO later this year. "We are a formidable company in every capacity but the cloud is where we're taking the company," he said. "It offers instant consumption, instant innovation and it helps companies grow."

Suite success?: SAP's roots lie in ERP (enterprise resource planning) suites, and this won't change. "In the end, the suite always wins," McDermott said. "Always has, always will."

The difference moving forward lies in SAP's plans to converge every one of its products, from the core Business Suite to acquired SaaS applications from SuccessFactors, on top of its HANA in-memory computing platform. HANA started as a database but has since been fleshed out with a variety of development tools and application services. "Now you're going to be able to unify these applications in a beautiful, easy-to-run, easy-to-consume format," McDermott said.


The vision includes a unified user experience as well as analytics and business processes that span applications, according to SAP. As SAP transitions to a cloud-heavy business model, customers will also be able to expect a common set of SLAs (service level agreements) and a single way to work with customer support, executives said Tuesday.

Sales with a smile: SAP intends to present "one face to the customer," whether it's selling on-premise applications, HANA licenses or SaaS, McDermott said. "When the customer deals with us, it's a very intimate relationship with shared values and goals."

SAP's cloud and on-premises representatives are now "paid the same way" as well, McDermott said, although he didn't elaborate on the details. On-premises sales representatives have traditionally enjoyed large commissions when they land a big sale, given that customers pay large up-front license fees. With SaaS, the money comes into vendors over a period of years.

HANA heating up?: There are now 3,000 HANA customers and 1,300 implementations of the database, according to SAP. In addition, 1,200 startup companies are building products with it.

SAP announced the availability of the Business Suite on HANA last year. Now more than 800 customers have bought it, including one with more than 100,000 employees. In other respects, however, the option remains in its early days. Only about 50 customers have gone live on the suite on HANA, although there are also currently more than 250 "go-live" projects, according to a slide presented at the meeting.

Reprinted with permission from Story copyright 2014 International Data Group. All rights reserved.
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