We've heard a lot about the SAP HANA database platform over the last 18 months since its release, and whilst we are in the quiet period between end of year and SAP releasing earnings reports in mid-January, the investors I talk to are talking about bookings between €350m and €400m for the year (as compared to €160m in the first full year, 2011), which probably makes SAP HANA the fastest growing database of all time, if not the fastest growing enterprise software product - ever.
But despite all this, SAP HANA still has relatively small market share. That's not to knock HANA, she's still a youngster compared to Oracle, which is now 34 years old. Oracle claims on its (albeit hyped) company fact-sheet that it has a massive 308,000 database customers. And SAP is now the #4 database vendor, behind Oracle (49%), IBM (20%) and Microsoft (17%) - numbers as per Gartner in 2011. I believe that this is going to start changing in 2013 - here's why:
First, we now have awesome Database & Technology platform availability across the existing portfolio:
- All SAP products now run on Sybase ASE - including ERP, CRM, BW, Solution Manager and the BI4 suite.
- All the Analytics Products - BI4 suite, Visual Intelligence, Predictive Analysis run on Sybase IQ and SAP HANA
- Some SAP products (SAP BW, SAP CRM and soon - SAP ERP) run on SAP HANA
- [Edit, 13 Jan 2013] Business Suite on HANA - ERP, CRM, PLM, EAM has now been released!
This means that if you want to, you can run all of your SAP apps on a SAP database. I don't believe there is a current software revision that requires a non-SAP database. What's on my wish-list for 2013?
- Support for some limited older SAP releases for Sybase ASE. Pick the top 5 or 10 most popular product combinations!
Pricing and Bundles
We will see what the pricing fairies have to offer when 2013 pricing is released but I'm confident SAP is going to ensure that customers can take advantage of this availability if they want to! We have some of these already:
- Aggressive price for SAP HANA scenarios: runtime licenses are 25% of an Enterprise license and BW on HANA is priced at 37%.
- Impressive Analytics bundles for new BI customers, at 20% in addition to your BI Suite license cost, including SAP Data Integrator and Sybase IQ.
- [Edit, 13 Jan 2013] Business Suite on HANA has been released and is priced by % application value! Awesome!
- [Edit, 13 Jan 2013] Business Suite on HANA customers can do partial migrations and get Sybase ASE included for the rest of the portfolio.
What's on my pricing wish-list for 2013? Lots of things!
- Database & Technology bundles for all a customer's needs e.g. ERP on HANA customers get Sybase ASE for the rest of the portfolio included. If SAP are clever, they will make these bundles easy to understand and buy. If they are really clever, they will make it the same price as Oracle!
- Enterprise License Agreements (ELAs) that are subscription-based for the whole D&T portfolio as a percentage of license price.
- Enterprise License Agreements for a fixed amount for unlimited usage in large customers.
- Improved mechanisms for resellers
All of this should mean that if customers want to buy SAP Database, they will be able to do so in a flexible and beneficial way that allows them to get off the 11% that they currently pay SAP for Oracle licenses.
New Features & Functions
2012 was a pretty amazing year of features and functions for SAP Databases, including:
- SAP HANA SP04 and SP05 which introduced High Availability, proper Backup & Recovery, transactional system support and Disaster Tolerance.
- SAP HANA XS Application Services and Portal with improved developer tools.
- SAP HANA Predictive Analytics Library for in-memory predictives.
- Sybase ASE 15.7 with a plethora of new features including compression and performance for SAP applications.
- Sybase IQ 15.4 with more features including improved compression.
- Improvements in portfolio TCO with Solution Manager
I hear there is a small army of developers working on this in 2013 and I've got a big wish-list here too!
- Aggressive new PAL functions to allow more complex modeling in SAP Predictive Analysis
- 3rd party tool certification including Informatica, SPSS, Cognos etc.
- Data Aging between SAP HANA and Sybase IQ to allow petabyte stores at a lower price point
- Single SAP Database Studio to monitor all products
- Increased SAP HANA maturity with support for larger systems and better transactional performance
- Integration of Sybase ASE, SAP HANA, Sybase IQ and Hadoop into a single RDBMS portfolio with clear delineation
- Better roadmaps - todays are just marketechture (login required).
If I'm being honest, I doubt there is anything on this list that isn't already on the product backlog and the rate at which these guys are producing software is pretty amazing, so I expect to see this all next year!
Marketing and Awareness
The SAP marketing peeps had a lot to get on with to explain the Sybase acquisition, new SAP HANA product, availability of SAP HANA for BW and overall database portfolio in 2012. Now in 2013, there's a lot to get on with!
- SAP ERP on HANA will be announced soon, and getting messaging by industry and by use case is incredibly important. What does it mean to customers' businesses and where is the value?
- Increasing awareness of how SAP HANA is a mission-critical database now with all the usual features/functions like HA, DR etc.
- A lot of people don't know the information in this blog, like how Sybase ASE runs all of the SAP portfolio including SRM, SCM etc.
- Focusing on developer awareness and user groups to get new developers on the SAP/Sybase portfolio.
- Focusing on my wish-list below too!
- Creating a really clear brand for not just HANA but also Database as a whole and making SAP a better choice than Oracle for customers.
Lots to get on with here then!
Making the Technology Easy to Adopt
When I discuss this topic, people are often dismissive because Oracle, IBM and Microsoft have such a stranglehold on DBAs and CIOs. In order to get mass-market adoption, SAP needs to make the technology easy to adopt. They've done some of this already:
- Free Hasso Plattner Institute learning courses.
- The SAP HANA Academy - free E-Learning for SAP HANA. I was involved in this early on and I think it's an amazing project that SAP have done a great job with.
- Migration tools for ASE and HANA. Some of these exist already, and I believe SAP are also working on an Upgrade/Unicode Conversion/Migration tool that does everything in one step - this will be a major step forward.
- Synchronized Maintenance Schedules. One of the major cost contributors for Enterprise Software is the decoupled maintenance schedule of Database and Application. With Sybase ASE, SAP HANA and SAP Business Suite, you can update the Database and Application at the same time, saving the cost of doing testing and change management twice.
It's clear to me that SAP need to do even more in this space because adoption is by far the biggest hurdle. Here's my wish-list for 2013:
- SAP HANA Developer downloads. Gary Elliott from my team makes a great case for this. SAP need to make HANA a 64-bit Windows 7 download for developers. It exists internally. Release it please!
- SAP HANA Developer systems. SAP needs to team up with an OEM like my SAP HANA Mac Mini that can be purchased pre-installed. Developers like real hardware.
- More migration tools and agile delivery plans. Let's push the Systems Integrators to make it easy!
- Automated parameters for Sybase ASE - more work can be done here to configure this database automatically to reduce TCO.
- Take the HANA Academy to all D&T products including Sybase ASE and IQ.
- Create SAP Database & Technology TCO tools to help CIOs understand the cost reductions possible.
SAP has already done an amazing job of building a database business from almost nothing in 2010, to $750m in 2011 and $1.1bn in 2012. Curiously, Sybase 2010 revenues were a total of $1.2bn, of which $880m were said to be database-related. Did they decrease in 2011 or are the numbers just counted differently?
To really punch its weight in this business (and meet its ambitions of being the #2 database vendor by 2015), it needs to grow 300% to a whopping $4bn from the 2011 number. To do this is really has to fire on all cylinders:
- Increase the overall capital database market with innovative products that add value.
- Eat market share not just from Microsoft and the smaller vendors, but also from Oracle, IBM and Teradata. The 2012 statistics will be fascinating to see, when they are available.
- Capitalise on the SAP install base to grab land from Oracle, IBM and Teradata.
- Sell into the non-SAP analytics market with HANA and Sybase IQ bundles
- Build the cloud application and HANA application portfolios
But to my mind - one thing is for sure: if SAP plays its cards right this year, 2013 will be a pivotal year for SAP Databases and they could break the $2bn barrier for license revenue. I'm looking forward to my small part in it :-)