On Jan 25th 2012, in an interview to Chris Kanaracus@IDG, we made a bold promise to run ERP on HANA by end of 2012. It is my great pleasure to announce today that SAP Business Suite, including ERP, CRM, SCM, is now powered by SAP HANA.
My little girl, HANA, is spreading its wings and bringing its transformative potential to the best business application suite on the planet. SAP Business Suite is at the heart of tens of thousands of companies and it is estimated that 63% of world’s transactions run through its applications that produce, move, sell and service almost everything you see around us – from the clothes we wear, the food we enjoy, the cars we drive to the myriad services we can’t do without such as health, finance, government and retail. SAP Business Suite powered by SAP HANA empowers you to run your business in real-time within the window of opportunity – to transact, analyze and predict instantly and proactively on one platform. Imagine the cumulative business impact of running SAP Business Suite in real-time to the world economy! This is truly taking an innovation and applying it at scale to change the world for the better.
What is the Change?
SAP has always stood for real-time business. SAP R/3, released 20 years ago began the business process re-engineering revolution helping companies automate end to end business processes. The 3 tier client server architecture pioneered by SAP (Client Interface – Process Logic – Database) created an abstraction at the data tier and provided consistent process logic to do business at scale (e.g. take customer orders, ship products) and brought in an era of great productivity gains. This was the “real-time” in 1992 bringing multiple departments/regions, was on the same page on one system.
However, this led to a significant compromise. Due to the constraints of the disk based architecture in the data tier, these systems of record had to pump data into different databases to make sense of the captured data, introducing significant delay, mistrust and inconsistency. Information was a few steps away from the reach of the users. In addition, with web, social, machine and mobile data entering the enterprise, there was a clear need to move from process automation to empowering people in real-time on the basis of ALL the information available. Clearly, current architecture and its limitations, would not serve the next 20 years of enterprise software. Based on this insight, Hasso posed a very strategic question 6 years ago? If we were to design SAP R/3 from scratch, what would it look like?
The answer was pretty clear – HANA – a modern data platform that puts OLTP and OLAP together, doing massively parallel multi-core processing on one copy of data that is ALL in main memory. This would be a radically simplified architecture that kills batch programs, captures data, powers interactive and instant analytics on transactional data informing every decision in real-time, enabling live collaboration and feeding the “always on” mobile lifestyles instead of “after the fact” reports.
Bringing this vision and disruptive technology, in an evolutionary way was the challenge we set out with our roadmap. At a blistering pace of innovation – in 18 months we have SAP Business Object, SAP Business Warehouse, SAP Business One, SAP CRM, 30+ new applications, 150+ startups and now the SAP Business Suite is Powered by SAP HANA. This provides a platform to renew the old and deliver new capabilities in a timeless way. It also brings an ecosystem of the best, in that SAP’s approach has always been to drive new innovations within SAP and to co-innovate with partners and customers. Within this framework, we have been working closely with existing partners and have initiated the HANA startup program to bring the passion and creativity of the startup community to SAP HANA. In working with our ecosystem, we bring openness and choice to customers so that they never have to compromise on the things that are most important to them.
Congrats to the many people behind this specially SAP Business Suite and HANA teams at SAP lead by Bernd Leukert and Franz Faerber for making this day possible. I dedicate this massive achievement to Hasso Plattner for his life-long pursuit of real-time business, tireless commitment to SAP’s renewal and personal mentorship to me.
Moreover, thanks to the power and universality of SQL, SAP Business Suite remains open to other database technologies and vendors and only one version of SAP Business Suite goes forward without disruption. Innovations in the SAP Business Suite, such as push down of data centric processing logic from the application server to database tier via stored procedures would be made available to other databases too making them perform better too.
The Business Value of This Change
So, what can we do on this real-time business platform and how does speed really serve the business? I believe that there are three levels of benefit that we get.
First, smarter business models, on the basis of real-time process and analytics are now possible.
Let me take a very simple example to illustrate the power of real-time combination of transactions and analytics and how it can change a business process like airline ticketing. Airline ticketing began as a transactional system, providing tickets at fixed prices capturing essential data from customers. Next, companies moved that information into analytical platforms for analysis and changed prices on the basis of sophisticated algorithms as often as they could, typically at a weekly level basis due to long lead times to move and evaluate the data. Now, it is possible to do re-pricing of tickets on the same transactional platform that captures customer demand, with a constant feed of external data such as changing weather patterns and social data. In fact, with every transaction, you can analyze and re-price the next ticket, while uniquely understanding every customer on a 1:1 basis, closely matching demand and supply leading to improved profitability and customer service. John Deere for example, is looking for ways to augment their business model to include customer services into their product offerings. As today’s machines collect tremendous amounts of data from sensors (weather, soil), real-time tracking and evaluation of this data it will open new ways to utilize real-time information. The same transformation is possible in Consumer Electronics and Healthcare (medical devices and personalized medicine) to name a few.
Second, with faster business processes you can execute decisions within the window of opportunity.
This empowers everyone to follow their train of thought, utilize alternative scenarios based on better math in database processing and use the saved time to make better decisions. If the MRP process for a large manufacturing company or the Available Cash Balance for a bank did not require hours to execute, but instead could be done in seconds or minutes, what could you do with the saved time? Perhaps you can run alternative scenarios to match your supply and demand plan in a better way or put your cash for high returns at lower risk delivering significant business value.
Lastly, I expect simplification of landscape and more importantly business processes with the elimination of batch processing.
With the collapse of OLTP and OLAP in one platform, there is a massive simplification on the way. For long CIOs have tried to fundamentally alter their investment away from “keeping the lights on” to “innovation” that gets their business stakeholders excited. With the elimination of batch, ability to do on the fly aggregates and extensions we have an agile system that will reduce operational costs while powering smarter innovations. Simplification in IT layers will also eliminate layers in business, where we can eliminate overhead functions have evolved to collect and expedite information clogged information flow across the company
The next step for SAP is re-inventing business networks with the transformative capabilities of the SAP HANA platform. Cloud is a natural place for real-time information to be shared at scale, collaboration to arrive at decisions, instant connectivity of mobile to reach everyone. With the cloud platform, we can re-invent application delivery and infrastructure in way that have not been thought of before. On this new platform we can bring startups, customers and partners to power a new real-time economy with a world-wide network of real-time businesses.