What parallel is there between SAP's Cloud Strategy and the ongoing Android vs iOS competition?

9 January 2015

Thierry Crifasi

Thierry Crifasi

Global Head of C/4HANA CoE

I was recently involved in a conversation where somebody mentioned a rumour about a potential takeover of Salesforce by SAP. Whilst my first reaction was to immediately rule it out as a possibility, I have been giving it some thought over the last few days. As part of Bluefin’s SAP Cloud for Customer capability, I have also been trying to decipher SAPs Cloud strategy in order to try and anticipate its next move.

A lot of what SAP has been doing over the last few years has been about getting to grips on how to extract itself from being seen as the key player in the slowly dying on-premise enterprise software world. By drawing similarities with the ongoing “Android vs iOS” battle of the giants, I’d like to share my perspective.

In the enterprise software market, the database is the equivalent of the operating system in the consumer software market

Like with "Android vs iOS" where the battleground is all about adding new Operating System features in every new release, the corporate database has evolved as a key differentiator for software vendors’ ecosystems (SAP, Oracle, IBM, Microsoft).

The SAP HANA database is more than a database; it is also a development platform and is key to SAP’s Cloud aspirations. My colleague John Appleby gives you a full FAQ on HANA in The SAP HANA FAQ - answering key SAP In-Memory questions.

Each SAP HANA release comes with a bag of new features (Service pack 09 was announced a couple of months ago). In the context of SAPs Cloud strategy, SAP HANA is being leveraged to provide Cloud-based hosting services with scalable performance. The announcement by SAP at TECHED Berlin to make the database truly multi-tenant (as opposed to a multi-tenant application) should drive price down for both Managed and Public hosting services.  Most of the features mentioned by John are being leveraged in the SAP HANA Cloud Platform, which is SAP Cloud PaaS offering.

Finally, SAP HANA is also being leveraged by all its SaaS applications as they are or will all be moved to SAP HANA. The benefit for users will be better scalable performance, the ability for SAP to more easily share data across applications as well as real-time analytics. SAP HANA also provides all SaaS applications with the ability to surface predictive analysis models for insightful analysis.

In the enterprise software market, the Cloud has become as important as in the consumer software market

Over the last few years, Apple has had to step up its Cloud presence in order to counter Google. I won’t expand here on why the Cloud has become such a fact of life. Ease of consumption from consumers has led to similar expectations from corporate software buyers. The Cloud is the place where most innovations will happen, not the on-premise graveyard built by enterprise software vendors and many large system integrators alike over the last 20 years. This graveyard is the one where IT Directors have spent years wondering how they can help their Line of Business CXOs compete in their market whilst ‘keeping the lights on’ with their existing systems.

Developing innovative solutions on top of existing on-premise architectures has become an expensive and time-consuming challenge when compared to the Cloud. For example, how many times have you seen a new SAP project being postponed or even cancelled because an expensive upgrade or even just a software patch is a prerequisite?

In the enterprise software market, establishing an ecosystem of content providers and playing the role of the marketplace orchestrator has become as important as in the consumer software market

One of the key battlegrounds between iOS and Android has been the App marketplaces. The number of available apps on the respective platforms has been a key competitive differentiator. Attracting developers to your ecosystem is also part of this strategy.

SAP has been doing the same with the SAP HANA Marketplace where customers can purchase or trial Cloud solutions and where publishers can sell their own apps.

With this platform, SAP is becoming a marketplace orchestrator where revenue comes from getting a percentage of Cloud application sales (for apps sold by other publishers). It is fair to say this marketplace is still in its infancy when compared to Salesforce.com’s Appexchange. Salesforce.com’s PaaS offering (Force.com) has been around for a while which partly explains the lead it has over SAP. As SAP’s own PaaS – SAP HANA Cloud platform – gains traction, one would hope the gap might narrow.

This is where the rumours about a takeover of Saleforce.com by SAP might make sense. SAP could probably benefit from the experience of Salesforce.com in this space but of course this is pure science fiction or isn’t this?


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