Why SAP Will Have to Backtrack on S/4 on HANA Database

Executive Summary

  • SAP has cut off their customers options by restricting S/4HANA to HANA.
  • This is limiting the uptake of S/4HANA. It brings up the question of whether SAP will be able to stay with the restriction of S/4HANA to just HANA.

Introduction to S/4HANA Being Restricted to HANA

I have concluded that SAP will have to perform a major change in direction on HANA database and S/4HANA at some point. I cannot predict when, but it will have to happen. This article covers this topic.

As I pointed out in the article, Has SAP’s Relentless HANA Push Paid Off?, the HANA database is not selling very well. Much of the HANA-based products are not ready to be sold. With the introduction of the Oracle 12C database, SAP has lost any advantage in database processing speed. It is most likely now behind Oracle in processing speed.

We don’t know exactly as SAP is not producing benchmarks for critical types of processing — like transaction process which is mostly what an ERP system does. But we can guess based on the design and other benchmarks. SAP has no reason, aside from a monopoly action to push other database vendors out of its clients, to not certify Oracle. And other database vendors to be “HANA database only.”

Do the HANA Database Arguments Make Sense?

As I pointed out in the article Getting Clear on SAP S/4 HANA Terminology, many of the arguments on HANA don’t make many any sense.

  • This is not to say that in some circumstances high cost and speed hardware is not useful.
  • This is not to say that faster hardware in the form of more RAM and SSD is not useful and called for certain uses.

But SAP’s proposal, which was first championed by Hasso Plattner, that everyone needs to agree with the idea that the HANA database should be the exclusive database that SAP runs on is, of course, untrue.

How Hasso is So Wrong on Column Based Databases

I have read through a large amount of material on HANA including Hasso Plattner’s paper A Common Database Approach for OLTP and OLAP Using an In-Memory Column Database. This paper proposes that columnar databases are better in pretty much every way over traditional relational databases. Outside of SAP, it is difficult to find a person well versed in database technologies who agrees with this.

The problem is that Hasso is acting as both a computer scientist and as a leader at SAP. Therefore a paper written by Hasso is not simply a standard paper in computer science. It is written by someone trying to sell people on HANA database. His objectivity on the topic is non-existent.

Hasso has an enormous financial bias that a typical Ph.D. in computer science does not have. Also, the paper leaves out so many other aspects that are necessary to the decision among different databases.
Cool Aid

Like Drinking Kool-Aid?

So many SAP partners and independent consultants have served as an echo chamber for proposals made about HANA, all of it based on the idea of going with the flow and maximizing revenues. The technological truths or falsehoods don’t seem to matter.

Who Knew the Real Story on HANA Database? (And Carried the Lie)

I can say that a lot of people in consulting companies who were “advising” on HANA database owe their clients an apology. The more time that passes, the less the statements that SAP has made about HANA database seem to be marketing fluff. And the major SAP partners bought 100% into them and mindlessly repeated them — and included them in marketing literature.

For several years SAP partners went insane and could not stop using the term “simple” at conferences. Finally, SAP dropped the whole simple theme as it was becoming a joke. It appears that many of the most senior members of these organizations had no idea they were even saying anything false.

SAP has also been massively exaggerating the acceptance of HANA database. This quotation is from 2014, which looks even more inaccurate in from this vantage point.

“Meanwhile, SAP also saw higher adoption of its HANA platform with more than 3,600 HANA customers and over 1,200 customers for SAP Business Suite on HANA. The company did not, however, disclose its revenue from the in-memory database platform. It said in the last quarter that it had reached 3,200 HANA customers, including close to 1,000 for the business suite.”

“Hana has taken hold,” McDermott said during the call. “We don’t have to prove that it works.” – InfoWorld

HANA Works for How Many SAP Applications?

HANA database does work for some applications, but for very few. HANA database works on BW. HANA database works on the Finance module in S/4. BusinessOne (for some strange reason) has been ported to HANA database. However, there are many applications for which HANA database does not work. There are also many applications like CRM or Concur or SuccessFactors for which in-memory computing is just a waste of hardware resources.

Regarding effect, here is the following quotation from someone who has implemented HANA database on both ECC and SCM.

“And don’t see much on transaction side, biggest change is aggregating tables. We have already Hana database on both ECC and SCM boxes, We don’t see super speed! I think you can talk about the super speed of SAP apps on HANA database, until you actually have it. Database speed does not directly translate to usable speed.”

I can echo that statement, seeing some my clients port BW to HANA database, it is certainly faster, but it has not brought a brave new world to analytics in companies. The biggest problem they face, which is the massive backlog of reports and other work that seems to grow every few months at companies has not been addressed by HANA database.

SAP’s Positioning on HANA to Replace Oracle and Other Databases

SAP has invested hugely in HANA. SAP has been using a scare tactic to spook companies off of Oracle.

  • The argument has been that Oracle can’t keep up with SAP’s innovation. In the article Which is Faster HANA or Oracle 12C, I provide information which indicates this most likely untrue.

For years SAP proposed that Oracle had no future for running as a database under SAP applications. The way that this was justified was to require that other database vendors essentially design their database like HANA.

How SAP’s Technology Opinions Changes Depending On What Makes Them The Most Money

This substantially changes the game from where SAP was agnostic as to the database, to where SAP, after it bought Sybase and had a product to sell, and of course changed more dramatically with the introduction of HANA database. This policy change is explained in the book SAP Nation 2.0:

“R/3 avoided database specific features like stored procedures. This allowed customer database portability choices. In fact, that was SAP’s rallying cry for over two decades. But with S/4, SAP is reversing direction and is moving logic from he application layer into the HANA database. Dr. Plattner defended the move as a way to simplify the code. In a comment to a blog post he said, “That R/3 didn’t use stored procedures is true. The ERP version of the suite on HANA not only dropped the transactionally maintained aggregates and all redundant materialized views, but heavily uses stored procedures and other libraries of the HANA platform. The application code is being simplified dramatically. The transactional performance increases accordingly.”

This is unknown to many but is a serious step back for databases, which have for some time have enjoyed application independence for some time. The application interacts with the database with a common language, called SQL. SAP is proposing that while its applications will use the common language now, it is changing the standards on what databases it will certify.

Should SAP be Deciding The Database Customers Purchase for SAP Applications?

But, is this for SAP to decide? SAP may propose that its applications will run better on its HANA database than on a competitor’s database. And a competitor database may feel free to claim the opposite. SAP’s position on HANA database, which has softened recently brings up the question of whether SAP has the right to decide for customers what database they should be using. If so, could say a database provider like Oracle does the opposite.

Couldn’t Oracle say that only its applications should be running on its database? No doubt, Oracle’s opinion is that all their applications are superior to all SAP’s applications. So why not simply disallow any application but those sold by Oracle to run on Oracle? Obviously, it is a hypothetical question, and Oracle would lose business from doing this.

This is an exciting repositioning of the question. It highlights the fact that vendors should not be prescribing to customers what they run with the application or database they are selling.

HANA as a Database to Beat All Competitors

There is an essential distinction between SAP and other database vendors. Other database vendors sell into accounts where they do not control the application layer. SAP does not. Is it true, as some have claimed, that HANA database is so competitive with other databases that it is desired by companies outside of those that use SAP? SAP HANA is not marketed to and not used by anyone but companies that run SAP applications. So how competitive is HANA database then? That is how much of a superior technology and excellent value is HANA database if it can only be marketed to SAP customers? Think about it. SAP has proposed its world-beating database is so superior, so why not use it for non-SAP applications?

It should be remembered that HANA a good part of SAP’s database products come from Sybase. And when Sybase was independent of SAP, Oracle did not have a problem keeping up with them. It is just unlikely that SAP, which has never had a reputation as database vendor has created so much innovation in their database layer that SAP’s applications should not be ported to other databases.

What Backtracking Will Mean

As a strategy, HANA database was never a safe bet if one looks at the history of enterprise software. This point is brought out in the book SAP Nation: A Runaway Software Economy by Vinnie Mirchandani:

“Dave Kellogg, a former SVP of marketing at BusinessObjects an now CEO of cloud EPM vendor, Host Analytics, comments: “Application companies should do apps. They rarely build good platforms. Salesforce had numerous disasters with specialized database attempts and they finally gave up and just stayed married to Oracle. Besides, platforms are commoditizing and cloud-izing. Despite misleading marketing, HANA has virtually nothing to do with the cloud. It is a column oriented database system. So, if HANA is the answer to the cloud threat, it’s not a good one.”

Position on Putting S/4 on Oracle (And Other DBs)

It is inevitable that SAP will have to back off of only porting S/4 to HANA. So companies should have no concern about waiting until SAP changes their policy on Oracle.

Conclusion

SAP should have never made HANA a required purchase for S/4.

S/4 has not been released as a suite yet in any complete form, so this issue has not been as much of a problem. And SAP has not lost that much business by limiting S/4 to HANA. But, whenever SAP completes S/4, and it is ready for a “normal” release (that is it is a non-beta product ready for non-parallel or sidecar implementation) the issue of SAP’s unwillingness to certify Oracle 12c and other alternatives will become a bigger issue.

Curious about the reality of S/4HANA implementations? See our The S/4HANA Implementation Study, for real story and details on actual S/4HANA implementations.

SAP’s Inaccurate Messaging on S/4HANA as Communicated in SAP Videos

Fact-Checking SAP Information on S/4HANA

This video is filled with extensive falsehoods. We will address them in the sequence they are stated in this video.

SAP Video Accuracy Mesurement

Appleby's StatementAccuracy % of the CommentExplanationLink to Analysis Article
S/4HANA is what allows key processes to be digitized.
0%
ECC was already fully digitized and digitized across key business functions.The Problem with Using the Term Digital Transformation on IT Projects
HANA is a Platform
0%
HANA is not a platform, it is a database.How to Deflect You Were Wrong About HANA
Fiori is a major advantage for S/4HANA.
10%
In S/4HANA implementations Fiori is infrequently used when S/4HANA. How Accurate Was SAP on the Number of Fiori Apps?
Fiori is far more efficient than what came before.
10%
In testing Fiori and S/4HANA, Sven Deneken's statements did not hold up. There was a particular weakness in actually making changes after noticing something needed to be changed, and we found the efficiency below that of ECC with of course SAPGUI.
S/4HANA is innovative as it brings "real time inventory."
0%
Sven Deneken brings up the topic of "real-time capabilities," however there is nothing particularly real-time or different in terms of a reaction than ECC. Whenever you make a change in ECC or any other ERP systems for that matter, the entry is real-time. Sven Deneken states that "the physical inventory is the same as the digital inventory." However, under what system would this not be true?What Happened to the Term Perpetual Inventory?
S/4HANA is innovative because it allows access to supplier information.
0%
Sven Deneken states that information about the supplier is "just a fingertip away." Sven Deneken may be familiar with ECC, where supplier data is also a fingertip, or say mouse click away. It called the Vendor Master in ECC.
Sven Deneken says that the cycle could be changed to daily or sub-daily.
0%
Why would that occur? This is a very strange scenario that is being laid out.
S/4HANA is innovative because it allows MRP to be rerun interactively for a product location.
0%
Sven Deneken is extremely confused when he states that S/4HANA allows a fresh MRP run to be performed for a specific product location and that this is a differentiator for S/4HANA. For a single product location, there is no ERP system that cannot run MRP for a single location. Secondly re-running MRP does not remove uncertainties. MRP can be re-run when something changes. For example, when the forecast changes.Performance Problems with HANA and MRP
Sven Deneken states this demo shows SAP has reimagined inventory management.
0%
However, all of this functionality, save for several of the graphics shown in the video have already been available in ECC for many years, in fact, decades.

The Problem: A Lack of Fact-Checking of S/4HANA

There are two fundamental problems around S/4HANA. The first is the exaggeration of S/4HANA, which means that companies that purchased S/4HANA end up getting far less than they were promised. The second is that the SAP consulting companies simply repeat whatever SAP says. This means that on virtually all accounts there is no independent entity that can contradict statements by SAP.

Being Part of the Solution: What to Do About S/4HANA

We can provide feedback from multiple HANA accounts that provide realistic information around S/4HANA — and this reduces the dependence on biased entities like SAP and all of the large SAP consulting firms that parrot what SAP says. We offer fact-checking services that are entirely research-based and that can stop inaccurate information dead in its tracks. SAP and the consulting firms rely on providing information without any fact-checking entity to contradict the information they provide. This is how companies end up paying for a database which is exorbitantly priced, exorbitantly expensive to implement and exorbitantly expensive to maintain. When SAP or their consulting firm are asked to explain these discrepancies, we have found that they further lie to the customer/client and often turn the issue around on the account, as we covered in the article How SAP Will Gaslight You When Their Software Does Not Work as Promised.

If you need independent advice and fact-checking that is outside of the SAP and SAP consulting system, reach out to us with the form below or with the messenger to the bottom right of the page.

Financial Disclosure

Financial Bias Disclosure

Neither this article nor any other article on the Brightwork website is paid for by a software vendor, including Oracle, SAP or their competitors. As part of our commitment to publishing independent, unbiased research; no paid media placements, commissions or incentives of any nature are allowed.

S/4HANA Implementation Research

We offer the most accurate and detailed research into S/4HANA and its implementation history. It is information not available anywhere else and is critical correctly interpreting S/4HANA, as well as moderating against massive amounts of inaccurate information pushed by SAP and their financially biased consulting ecosystem.

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References

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The Risk Estimation Book

 

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Chapter 5: Software Sell-ability versus Implementability
Chapter 6: Selecting the Right IT Consultant
Chapter 7: How to Use the Reports of Analysts Like Gartner
Chapter 8: How to Interpret Vendor-Provided Information to Reduce Project Risk
Chapter 9: Evaluating Implementation Preparedness
Chapter 10: Using TCO for Decision Making
Chapter 11: The Software Decisions’ Risk Component Model

Risk Estimation and Calculation

Risk Estimation and Calculation

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