How Accurate Was Hasso Plattner and Fortune on HANA?

Executive Summary

  • Hasso Plattner makes some incredible claims about HANA, but how many of these claims are true?
  • Why it is not possible for HANA to be the fastest growing product in SAP’s history.

Introduction

On Jan 31, 2013, Fortune published an article titled Meet HANA; she’s SAP’s new goldmine.

In this article, we will evaluate how accurate Hasso Plattner’s statements and Fortune’s coverage turned out to be.

Article Quotations

FORTUNE — “The fastest-growing product in SAP’s 40-year history isn’t a business software application, and it wasn’t invented within the German company’s massive research and development labs at the request of its co-CEOs. Rather, HANA, a new in-memory database technology capable of speeding up complex computations, was developed by a handful of university students and spearheaded by none other than SAP’s 69-year-old co-founder and chairman, Hasso Plattner. In the early days, HANA was known as “Hasso’s New Architecture”.”

HANA as the Fastest Growing SAP Product of All Time?

This is a story that SAP has been pushing, but it is inaccurate. The math behind why HANA could not be the fastest growing product in SAP’s history is covered in the article How Popular is HANA?

“A number of SAP’s (SAP, -0.61%) core business applications have already been rewritten to run on HANA. But Plattner, whose father was a doctor, is particularly excited about HANA’s prospects in the healthcare industry. Earlier this week, at a personalized medicine conference in Silicon Valley, he touted HANA’s abilities to quickly churn through massive amounts of medical information, like genomic data, in order to identify the best therapy for a patient. According to Plattner, SAP will launch a HANA-based healthcare platform in the “next few months.””

“Doctors are instant decision makers,” Plattner told the audience.” “And therefore the system has to be extremely fast.”

SAP’s Mystery Health System

This never occurred. If SAP ever released SAP Medical Research Insights, which we covered in the article How Accurate was Vishal Sikkas on the Future of HANA? 

Also, why does Hasso believe that doctors are instant decision makers? Is that actually how health care is delivered, through doctors who make instant decisions? Is Hasso speaking of the emergency room physicians or physicians overall? Furthermore, as we cover in the article Why HANA is a Mismatch for ERP and S/4HANA and What is the Actual Performance of HANA?, HANA has not been shown to have better performance than the competing offerings from other database vendors. Therefore, even if Hasso Plattner’s statement were true, which it isn’t, the point would be moot, as that performance benefit is better obtained from non-SAP databases.

Bill McDermott’s Predictions on HANA’s Uptake

“HANA has quickly grown into a 392 million euro business for SAP, though it still comprises a relatively small percentage of the company’s total revenue. But SAP is already touting the uber-fast technology as a big success story. “You can see the acceleration,” co-CEO Bill McDermott told Fortune after the company announced its latest earnings report last week, adding that about half of HANA’s 2012 revenue came in the fourth quarter of last year. “It’s becoming a real brand, and a well-known solution. And guess what, we’re just getting started.””

Hasso’s Predictions on HANA’s Becoming 20% of SAP’s Revenues

Four and a half years later, HANA’s sales have been disappointing. Rather than push out Oracle, SAP has extended their partnership with Oracle into the foreseeable future as is covered in the article SAP’s Change in Policy on HANA and Oracle. 

“SAP expects sales of HANA to reach upwards of 700 million euros in 2013. Though the technology is promising, it requires companies—including SAP—to rewrite applications for the new platform, a time-consuming task. But Plattner says all of SAP’s current and future applications will be “HANA-rized,” and that the technology will someday soon make up at least 20% of SAP’s revenue.”

Four and a half years later HANA is nowhere near 20% of revenues. SAP is a $20 billion a year company, so to do what Hasso proposed would mean HANA would have to have become a $4 billion business. According to DB-Engines, HANA currently sits as the 19th most popular database.

Larry Ellison’s Prediction on HANA

“Of course, Larry Ellison, CEO of database leader Oracle (ORCL, -0.18%), has a different take on HANA’s prospects. Last year he suggested Plattner must be on drugs to think he can compete with Oracle, saying his company has been working on in-memory technology for a decade.”

Larry turned out to be right.

“Plattner’s response: “I never took drugs in my life,” he said in an interview with Fortune earlier this week.”

SAP’s Growth into Health Care and Comparisons to Watson

“But SAP doesn’t have just Oracle to contend with. IBM (IBM, +0.02%) has already made a big push into healthcare with its Watson supercomputer, which relies on similar underlying technologies (like parallel processing) but also uses artificial intelligence to suggest diagnoses and therapies to doctors. Both technologies aim to comb through medical data much faster than a human physician can.”

HANA does not rely upon the parallel process. It relies on a combination of large amounts of memory in SSD and RAM combined with column-oriented table design, as covered in the article How HANA is Such a Fast Database (for Anaytics).

Secondly, IBM’s Watson has been the subject of a major marketing campaign on the part of SAP, but it has not been a successful product for IBM.

Hasso on HANA’s Performance

“The major message is we can do things faster,” says Plattner. “Faster is better.”

SAP has lost benchmarks against Oracle 12c on performance versus HANA. This is covered in the article What is the Actual Performance of HANA? 

Conclusion

Both Fortune and Hasso receive a score of 1 out of 10 on the Fortune article. The article is filled with inaccuracies and nothing that Hasso Plattner or Bill McDermott said turned out to be true. The only accurate part of the article was Larry Ellison, who was criticizing SAP’s plans.

Search Our Other HANA Content

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.

HANA & S/4HANA Research Contact

  • Interested in Research on S/4HANA & HANA?

    It is difficult for most companies to make improvements in S/4HANA and HANA without outside advice. And it is not possible to get honest S/4HANA and HANA advice from large consulting companies. We offer remote unbiased multi-dimension S/4HANA and HANA support.

    Just fill out the form below and we'll be in touch.

References

https://fortune.com/2013/01/31/meet-hana-shes-saps-new-goldmine/

The Risk Estimation Book

 

Software RiskRethinking Enterprise Software Risk: Controlling the Main Risk Factors on IT Projects

Better Managing Software Risk

The software implementation is risky business and success is not a certainty. But you can reduce risk with the strategies in this book. Undertaking software selection and implementation without approximating the project’s risk is a poor way to make decisions about either projects or software. But that’s the way many companies do business, even though 50 percent of IT implementations are deemed failures.

Finding What Works and What Doesn’t

In this book, you will review the strategies commonly used by most companies for mitigating software project risk–and learn why these plans don’t work–and then acquire practical and realistic strategies that will help you to maximize success on your software implementation.

Chapters

Chapter 1: Introduction
Chapter 2: Enterprise Software Risk Management
Chapter 3: The Basics of Enterprise Software Risk Management
Chapter 4: Understanding the Enterprise Software Market
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