What Was John Appleby’s Accuracy on Moving BW to HANA?

Executive Summary

  • John Appleby made many claims around HANA.
  • We review his accuracy in terms of moving BW to HANA

Introduction

On Sept 5, 2012, Mitch and Murray……I mean….Bluefin Solutions published the article Building the Business Case for SAP BW on HANA.

Now with close to five years of hindsight, we will review how accurate the accuracy of this article.

Article Quotations

“Implementing SAP’s NetWeaver BW Data Warehouse on its in-memory platform SAP HANA (otherwise known as BW on HANA) might just be SAP’s fastest growing product line in history, with 150 projects within 3 months of General Availability of the product. One of the elements my team is most involved with right now is building the benefits case and business case for the capital investment. This blog gives an overview of what is required and what the elements are.”

Let us head out to DB-Engines to verify this claim of HANA being or “might be” the fastest growing SAP product line in history.

Does this look like the fastest growing product in SAP’s history? It should be stated that Bill McDermott called HANA the fastest growing product in the history of software — which means that it beat Angry Birds. We covered this claim in the article How Accurate Was SAP on HANA’s Growth?

So not a great way to start off the article. Let us move on.

“As with any business case, we have a set of capital and operational expenditures, which offset or avoid costs, or bring tangible benefits. The biggest difficulty with this as relates to Data Warehouses is that the benefits of faster, better decision making are hard to measure. What we tend to do instead is to create the business case based on savings, and describe the benefits case as coming “for free”. Yes – despite the capital expense, BW on HANA will save almost any business money.”

This has turned out to be fabulously wrong.

Let us look at the cost side of the equation.

At Brightwork, we estimate that HANA has the highest TCO of any of the databases that it competes.

This is covered in A Study of SAP HANA’s TCO. 

  • The license is higher (although lower since they started discounting HANA)
  • The resources are more expensive (they are less common)
  • The HANA database is less stable. It is constantly having patches, new components that must be installed, etc..
  • The consulting projects for HANA are longer due to maturity issues. Our estimate is 1.25 years to take HANA live. This is based on information coming in from projects globally.

Every single item that builds up the TCO is higher with HANA than any other competitive offering.

Now let us look at the benefits side of the equation.

As covered in the article What is the Actual Performance of HANA?, there is no evidence that HANA is faster than competing solutions like Oracle 12c or IBM Blu or even SQL Server — all of which now how column-oriented stores. In fact, the evidence is that HANA is slower than these databases, and it is also far less stable. A database is not only measured based on its performance. Stability is an even more important factor for rating databases.

SAP HANA Licensing

“The great thing about SAP HANA DataCenter Edition pricing is its simplicity. You pay one price per 64GB unit for all use cases including all features, including some that other organisations like IBM and Oracle charge for: compression, tuning, high availability etc. It is important though to understand how many 64Gb units you need for current and future needs – assessing how big your system will be and how much future compression you can hope to get.”

Nice try John, but due to the competitive pressure, SAP increased the price of the databases they OEM or resell to match the higher cost on HANA.

This is covered in the article How HANA is Being Used to Block Out DB Vendors.

These comments by Appleby are utterly false…and wait a minute…

Ding Ding Ding!

We award John Appleby our Golden Pinocchio award for proposing that HANA, the most expensive database that exists, is lower than competing offerings. 

Hardware

“SAP HANA hardware is available from all major vendors in 128GB-1TB single nodes, or clusters of up to 16x 512GB or 1TB nodes. My advice for anyone with a moderate size BW system: only buy 512Gb “medium” nodes and start with 4.”

HANA uses the most expensive hardware setup because it inefficiently requires more of the database into memory, but HANA does less with the same amount of hardware as other database vendors.

Interestingly, Appleby does not even attempt to mislead people here on the cost of HANA hardware.

But, no matter what the customer “starts with” the evidence is now clear that HANA will use a far larger hardware configuration than any competing offering. Due to HANA’s design issues that SAP is still trying to work out, HANA will not be able to address much of that hardware depending upon the database processing that is performed.

Support

“There is a cost to support SAP HANA. You will need to include software, hardware and systems support costs, depending on the period over which you choose to build the business case (I suggest aiming for 3 years with a 1 year ROI).”

Why is that true? HANA has discounted support. So 15% instead of 22%.

If SAP removes support costs on HANA, this is the first we have heard of it. And this is exclusive of the high degree of support that HANA instances require that are not covered by SAP support. Appleby is remiss in mentioning it, because….you guessed it, Bluefin Solutions offers these services.

Implementation

“There will, of course, be a cost to implement SAP HANA, either by migrating your existing BW system or by creating a new one.”

That is a fantastic admission on the part of Appleby. It’s quite educational to read through Appleby’s articles to learn that SAP products have implementation costs. Thank you, John. That might be the only true thing in your article.

HANA will not only have implementation costs, it will have the highest implementation costs of any of the competing database for the reasons already provided.

Future Costs

“Most organisations spend a substantial amount on BI projects, and with BW on HANA they will either spend less (fewer full time employees or consultants) or achieve more for the same, in a shorter elapsed time. Our benchmarking suggests that project build times are 20-30% less with BW on HANA, leading to an overall saving of 10-12% or more for capital projects.”

It’s unclear why anyone would listen to Appleby, who released a continual stream of false information, on any of his benchmarks. Secondly, it is maddening to see a consulting company like Bluefin Solutions that has repeated inaccuracies that are promotional in nature pose as if it is a research entity. Nothing Bluefin Solutions says about HANA can be accepted without verification.

Furthermore, BW has a very poor development productivity. HANA would simplify this, but there are far better data warehouses on the market that would reduce the built times even more than Appleby’s dubious reduction.

The question should arise, that if one wants better report development productivity, why have one of the least productive data warehouses in the BW? Put another way, if report development productivity was a focus, why was BW chosen by the customer in the first place?

This is usually enough to pay for SAP HANA on its own, several times over.

  • Appleby is trying to sell HANA services, he is not a researcher. He will not have any idea if this is true. If a consulting organization that sold Oracle services stated that Oracle has lower costs should you listen to them? Of course not.
  • Appleby is assuming the HANA portion of the implementation is lower maintenance than the database it replaces, but that is incorrect. Due to HANA’s overhead, the maintenance costs on HANA drastically increases according to information from the field.

Performance Optimization

Most organizations have one or more Full-Time Employee (FTE) dedicated to performance tuning of existing solutions. This may be a DBA or BI resource; I have run projects that used 500-1000 man-days for performance tuning of large EDW environments. With BW on HANA this is a thing of the past.

Another pie in the sky projection….with unicorns jumping over rainbows that do not match the information coming back from HANA projects.

HANA has not only performance tuning, but it has maintenance overhead that competing databases do not have. If a company implemented HANA 1 below SPS 9, that company will have to reimplement to get to HANA 2 completely! Get real John Appleby!

Maintenance Problems with HANA

“In addition, SAP HANA is less costly to support than other databases because it requires almost no maintenance. Expect savings here.”

Appleby wrote this article in Sept 2012. Let us bring up the chart again.

According to DB-Engines, HANA had almost no implementations as of Sept 2012.

How would Appleby have any idea what the maintenance of HANA at that time was? Oh, right SAP told him, and he repeated it.

HANA will also have higher maintenance costs than competing offerings. Immature products require higher maintenance.

Hardware and Spinning Disks Taking Up So Much Space

“BW on HANA hardware is cheaper and greener than other EDW platforms. Many other platforms require hundreds of spinning disks which are costly and take up space. With BW on HANA you know exactly how much you need based on the size of your Data Warehouse and you do not need bolt-on accelerators like BWA or Exalytics, taking up more space.”

Here Appleby returns to a topic that he already addressed but left out the costs. It turns out he is going to propose that HANA has a lower hardware cost than competing databases.

This is inaccurate because HANA requires so much memory, and RAM and SSD memory is more expensive than disks.

  • How do hundreds of spinning disks take up space? Has Appleby ever seen how much space 200 hard disks take up?
  • And why does the company need hundreds of spinning disks again? Does Appleby realize how much capacity a spinning disk has?

We are going to help Appleby by going shopping for disks online.

This is an 8 TB disk by Seagate. It costs $459 on Amazon. It does not seem that large. When installed in a server, it’s larger, but a single rack can hold a huge number of spinning disks. 

Appleby should probably keep up to date on the sizes of disks before stating that it takes hundreds of spinning disks and that SAP customers can’t afford the room to place the disks. The statement is wrong in multiple dimensions. It is a laughable conjecture, and therefore….

Ding Ding Ding!

Appleby gets a second Golden Pinocchio award for this statement that spinning disks take up a lot of space. 

Trade-up

If your are a BWA customer then SAP will allow you to trade in that purchase, often to 100% of the original purchase amount. Talk to your SAP account team for more details.

Is this the way a person who is pretending to be independent is supposed to speak? As in..

“Visit a Chevy dealer near you!”

This is the kind of sentence used at the end of a commercial. And let’s remember….

ABC, always be closing. Always — be  — closing. Always ——- be ——— closing!

  • The first place prize at Bluefin Solutions for selling HANA is a Cadillac El Dorado.
  • Second places is a set of steak knives.
  • Do you want to know that third place is? 

Services Rebate

“When you make your first purchase of SAP HANA, you may be eligible for a services rebate of up to 30% of your license price that can be used by a BW on HANA Systems Integrator (including Bluefin!). In some cases you can save money by purchasing more HANA units and getting a bigger rebate. Talk to your SAP account team for more details.”

Once again Appleby really wants the reader to talk to their SAP account team! It almost seems like Appleby is coordinating messaging with SAP. But that can’t be true as Bluefin Solutions there to look after the interests of their customer. They would never sell that out…..right?????

Infrastructure Budget

“Many organizations are set up in such a way that they have budget set aside for infrastructure projects like upgrades. If you have an older Data Warehouse then it may be time to upgrade it and if you combine the upgrade with the migration to SAP HANA then you will save money on the overall program of work.”

And if you trade in your old car, it will reduce the price of your new car.

Appleby should be aware that software vendors normally update their products. So if a data warehouse has been implemented for a while (that is old according to Appleby) there is a good chance it has been upgraded. Therefore it may not actually be “old.”

Just a question……could any of this desire to have companies move to SAP HANA for their new data warehouses have to do with Appleby’s firm offering HANA and or BW consulting services? Is Appleby giving advice or ABCing again?

Third Party Analytics

“How much money does the business spend directly with third parties because they can’t get what they need out of their existing EDW? Chances are with SAP HANA, you will be able to provide what they need and you can cut the cost of third party Analytics suppliers.”

This is another projection that did not work out.

SAP has been promising analytics for a while but has provided very little. HANA is primarily installed under BW. BW has one of the highest TCOs in the analytics space. See our BW TCO Calculator for details. (It is free) And the HANA predictive analytics don’t appear on the SAP accounts that I see.

Look, Appleby does not care about cost reduction. His company, Bluefin Solutions sells HANA consulting services. Let’s get real.

Project Overruns

“Looks back through your last year of BI projects and talk to the project managers. How much over-run was there on those projects and how much was attributable to performance problems? Moving to BW on HANA will allow you to reduce over-runs.”

I see many SAP accounts, and I don’t know of customers that have HANA performance problems with Oracle or DB2. Secondly, simply upgrading to Oracle 12C or DB2 BLU will speed the performance more than pulling out previous versions of these databases and replacing them with HANA.

This is covered in the article What is the Actual Performance of HANA? 

SAP has had years to provide evidence of HANA’s superior performance, and they have provided nothing to support any of their marketing claims.

The Benefits Case

“Hopefully by now you will be able to create a basic cost/saving sheet for BW on HANA – in every example I have seen, it has saved organisations money either in TCA (for new implementations) or TCO (for migrations of existing EDWs). This makes BW a “no brainer” in the eyes of the people I have spoken to, and so we can focus on making the soft benefits case attractive.”

Based on what?

All of the information provided by Appleby up to this point has been false. Much of it ludicrously so. Bluefin Solutions makes its money from implementing SAP and was very focused on getting HANA business at this time. Who would trust a salesperson to provide assumptions to develop a benefits case?

“Performance problems are the single biggest reason why BI projects overrun and are delayed. With BW on HANA you still need to design performant solutions, but you don’t have to worry about large or complex data models.”

That is not at all what we have seen on projects. The number one complaint about BW on Oracle or DB2 is unrelated to the database. It has to do with the productivity issue with the BW.

The most direct and cost-effective way to address this is to replace the BW with a more competitive data warehouse application, not to but BW on HANA.

“Implementing BW on HANA becomes a no-brainer for most organising who try to build a business case in this way. What elements have I missed and what other components are you using to build the business case? Let me know and I will update this article to include them!”

This article has been a no-brainer, in that you would have to lack a brain to believe it. It is chocked full of lies, and with Appleby repeating whatever SAP marketing told him to say.

Conclusion

This article appears to be a competition to see how much Appleby can ingratiate himself to Hasso Plattner. When Hasso sees a nice compliant article like this (and HANA is his baby) he is likely to shower the entity that carries the flag for HANA with benefits. This is another problem in that Appleby is partially writing this article to score points — accuracy is the furthest thing from his mind. All the messaging provided here was coordinated with SAP before Appleby wrote the article. And once you can see what went on in the background it is quite insulting to the reader.

It also drives down to an unsettling pathway with Appleby continually trying to get SAP customers to contact their SAP sales rep.

This article receives a 1 out of 10 for accuracy.

Brightwork Disclosure

Financial Bias Disclosure

This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

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References

https://www.bluefinsolutions.com/insights/john-appleby/september-2012/building-the-business-case-for-sap-bw-on-hana

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

Analysis of John Appleby’s SAP Having No Future on Oracle Article

Executive Summary

  • John Appleby of Bluefin Solutions has been a provider of inaccurate information around HANA.
  • Questions surround many of Appleby’s claims around HANA including that SAP has no future on HANA, how HANA will enable a new class of applications and whether HANA will somehow connect in a unique way to the SAP Cloud Platform.

Introduction

John Appleby, along with Hasso Plattner, was probably the least accurate source of information around HANA and S/4HANA when these products were first introduced. As with most people in leadership at the SAP consulting partners, John Appleby provides false information about SAP products because it is profit maximizing to do so. And because people don’t have good memories, they often give hype men like John Appleby a pass on things that end up being inaccurate.

In this article, we will explore John Appleby’ accuracy on the article titled What Oracle won’t tell you about SAP HANA – Part 2.

Quotes from John Appleby’s Article

“Three years ago, Steve Lucas wrote What Oracle won’t tell you about SAP HANA. Since then, a lot has changed in SAP-land, including the support of most SAP applications on HANA (including Business Suite) and the release of the next-generation ERP, SAP S/4HANA. We are in quite a different world now, and I thought that Steve’s blog was worth updating for 2015.”

I analyzed Steve Lucas’ article and found it to be one of the most misleading articles by an author who did not understand the subject matter of what they were writing. I covered it in the article Analysis of Steve Lucas’ Article on What Oracle will Not Tell You About HANA.

#1 – SAP HANA is less expensive than Oracle

“I don’t want to get into detailed pricing debates on a blog, but I help customers implement SAP HANA every day, and it’s less expensive than Oracle, period.

Firstly, it’s available at a lower % of your SAP software estate than Oracle – so you will actually get a license payback if you implement HANA. Sure, that’s different to ROI, but it’s a nice place to start. For any apps where you don’t want to implement HANA, SAP throw in SAP ASE included in the price. And remember that if you buy S/4HANA in 2015, you will get all the future innovation included for the price of the SAP Business Suite on HANA runtime license last year.”

This is an example of John Appleby deliberately misleading his readers.

HANA Pricing

HANA is priced per GB while Oracle 12, or now 12c is not. HANA is the most expensive non-specialty database that one can purchase. There is no evidence that HANA is less expensive than Oracle. Once one placed any type of volume into HANA, the price goes up rapidly.

“Second, if you compare like-like for an application platform license cost, HANA comes out less expensive. The data reduction of HANA’s compression and simplified data models, easy to buy appliances and flexible license packages mean you can license HANA for less money than an equivalent Oracle database including all the features you need. Because SAP don’t charge extra for HA/DR, you are more likely to build a resilient solution!”

Appleby Making Any Sense?

The first part of this paragraph makes no sense, so there is nothing to address. The data compression with HANA was promoted by Hasso Plattner and has turned out to be completely inaccurate. SAP was telling customers they could compress their data by 98.5 percent. This was necessary to hide HANA’s actual cost. This type of paragraph brings up the question of how much Appleby knew when he wrote it. Fundamentally Appleby did not think of this article, or in any of his articles about HANA, but is merely repeating marketing information direct from SAP. Appleby seems to know nothing of what he is writing, so one might propose that he is therefore not responsible for anything he is writing.

“Third, if you want any kind of Enterprise solution, SAP HANA is available at a single cost for all features, including the equivalents of Enterprise, Multitenant, RAC, Active Data Guard, Partitioning, Advanced Compression, Advanced Security, OLAP, Advanced Analytics, Spatial and Graph, Database In-Memory, Diagnostics Pack, Tuning Pack, Database Lifecycle Management Pack and more. If you want to get the best out of Oracle, the cost is simply crippling.

The cost of RAC for a full-rack Exadata X5-2 is over $3m alone (don’t forget the extra $1m for the spare Exadata!). For this reason, most customers don’t use advanced Oracle functionality – it’s just too expensive.”

Why would you have to purchase Exadata X5-2? Is it a coincidence that Appleby, or should I say SAP selected one of Oracle’s most expensive databases/appliances?

#2 – SAP on Oracle has no future?

“This may be controversial, but in my opinion, SAP on Oracle has no future. Take a look at the April 2015 Roadmap Update if you want to see what I mean.

For example, if you put your SAP data workload on Oracle 12c, you aren’t currently able to update it (yes, seriously!). You can’t use any of the innovations Oracle invested in including Oracle Database 12c In-Memory, Oracle Database 12c Multitenant, Oracle Database 12c ADO/ILM or Hybrid Columnar Compression for Exadata. And that’s just the operational limitations.

In addition, SAP on Oracle will only be supported until 2025, and this has serious implications for SAP customers, many of which operate a 5-10 year roadmap. Systems are expensive to implement and maintain, and so customers need to plan ahead.

The replacement to SAP Business Suite 7.0, SAP S/4HANA, will only run on the HANA platform. SAP on Oracle has no future.”

Commingling Topics

This seems to commingle two topics into one.

  1. “First, is whether S/4HANA has future on Oracle. SAP has stated that it doesn’t. But this has nothing to do with what makes sense for customers; SAP decides to push customers off Oracle for S/4HANA. This is true even though HANA cannot compete with Oracle 12c and SAP has provided no benchmarks to support any of its performance claims regarding is superiority. This is covered in the article What is HANA’s Performance. SAP may be successful at moving companies to HANA on S/4HANA, or they may not be. We don’t know. I have written previously that SAP needs to open S/4HANA to Oracle and probably will as is covered in Why SAP Will Backtrack on HANA.
  2. Secondly, even if S/4HANA has no future on Oracle (because it is dictated by SAP) that does not mean that SAP has no future on Oracle. John Appleby should know that SAP has many applications, and just about all of them work with Oracle.”

Finally, John Appleby never addresses why SAP is planning only to run S/4HANA on HANA? Is this really because it is what is best for customers? John Appleby does not even discuss why he merely states that it is.

Towards the middle the quotation he strings together a paragraph that is difficult to parse. I would spend time parsing it if I thought John Appleby knew what he was talking about, but I don’t. But one question that arises is that just because SAP can’t leverage some of the “innovations” or new things in Oracle 12c is that a reason to not keep purchasing Oracle?

#3 – SAP HANA enables a new class of application

“One of the things which is great about working with HANA is that innovation comes seamlessly and often. There was a time when HANA updates came too often, but that pace has slowed over the last 18 months with two major releases a year, verified for datacenter usage. There are some more frequent updates for early adopters or those testing new functionality, but for most, it’s now possible to get great innovation every 6 months with minimal disruption.

HANA SPS09 came in November (soon to be datacenter verified) and it provided a ton of innovation including integrated ETL and cleansing, Multitenancy, support for Big Data and IoT, Event Stream Processing and much more. Read What’s New in SAP HANA SPS09 for more details. SPS10 will be on us very soon and promises to continue that trend.”

That is quite misleading. HANA has so much “innovation” because HANA is still developing as a product and is still nowhere close to Oracle. John Appleby is taking what is an unstable product and spinning that into something positive. Or SAP is, and John Appleby merely is repeating it.

Appleby Misleads Again

Secondly, either John Appleby does not know, or he is misleading people by saying that the innovation comes seamlessly and there is minimal disruption. Reports from the field indicate that HANA is one of the most high maintenance databases that customers have. This is because, again, HANA is still developing as a product.

Third, HANA has nothing to do with, and will never have anything to do with Big Data, unless SAP changes HANA’s pricing. HANA is that most expensive database that one can purchase, and it is priced by GB. It is also not a NoSQL design or Hadoop design, so it is the wrong database for large amounts of unstructured data. IoT is not a thing SAP is doing very much of, this is covered in the article, Why SAP’s Leonardo seems so Fake. Also, a database does not need to be specially designed for IoT. And this falls into a common thread on the part of biased entities; they only declare that SAP “has” something, but does not evaluate if that something is worth using. And these biased entities seek to influence decision makers and often do. No matter there is so much wasted money in IT!

False Information About Oracle

“Oracle 12c has been out for 2 years and is only now even supported for SAP applications, and very few innovations have come even since Oracle 11g.

What this means is that HANA enables a new class of business application to be developed. In S/4HANA Logistics, SAP achieve over a 70% data reduction by removing redundancy. What happens if we now mix in spatial awareness of product and customers, how might we enable predictive maintenance and ensure stock is proactively in the right place?

I can tell you one thing for sure: you ain’t seen nothing yet!”

Hmmm..I would disagree with that. Oracle 12c contains an innovation that trumps SAP’s column-oriented table design and is far faster is a primary reason that even in analytic applications, HANA cannot match Oracle 12c.

Jumping to Conclusions

Right after the first paragraph, John Appleby jumps to the conclusion that

HANA enables a new class of business applications to be developed.”

Why is this? Appleby does not explain why. The previous sentence does not support it, and the following sentence does not support the contention. What Appleby moves to, is that the database footprint is reduced. However, that is only important if the database is priced per GB. Oracle isn’t priced that way, so literally who cares? And secondly, SAP assumptions about compression are inaccurate, and I have verified this with multiple database experts. No company will ever see the reductions proposed by SAP.

Spatial Awareness

So let’s move to John’s next point, which has nothing to do with data reduction. John points to “spatial awareness, and predictive maintenance to ensure stock is in the right place.” SAP may offer these items, but they are not explicitly HANA. These are other products. I am not sure about spacial awareness, but predictive maintenance is not merely enabled by a fast database. And SAP has no history of providing any of this. Actually, as a person who works in SAP forecasting and has a strong service parts planning background, I can say that SAP is proposing that they will solve a problem that has been a tough nut to crack for decades. Appleby and his SAP scriptwriter are simply assuming that SAP will be successful with everything they introduce.

Overall, these paragraphs remove the emphasis from HANA and start talking about other products. This is a form of misdirection and is easy to do. John Appleby has learned quite well from Hasso Plattner (actually this entire quotation sounds like it was written by Hasso Plattner, and it may well have been) to merely create a word salad of technology terms to overwhelm the reader. The strategy is to find a term that the listener is not familiar with so that they suspend belief and accept all of the contentions.

#4 – No Hardware Lock-In

“At the time of writing, there are 538 configurations in the Certified SAP HANA Hardware Directory and this number increases every day. You can run HANA on anything from a shared VMWare appliance with just a 64GB slither of memory, right the way up to a 112 TB cluster, and beyond. There are 22 Certified Enterprise Storage solutions if you want to reuse an existing hardware asset.

What’s more you can keep your vendor honest because hardware configurations are very easily compared, so you can decide what provides you with the right value for money and functionality.

By contrast, Oracle locks you in to 1/4, 1/2 and full rack solutions which you can see on the Oracle Engineered Systems Price List. Their $1m full-rack solution has a paltry 2TB of DRAM – that’s what you get in a $100k pizza box from any one of 11 SAP HANA vendors. And that SAP HANA 2TB appliance is big enough (and mission-critical enough) to run almost any SAP ERP system out there, apart from the very large enterprise.

Want HA? No problems, that will be another appliance and 2 clicks of the mouse to configure. No costly RAC licenses and complicated implementation.”

John Appleby is observing a lot of things, but not observing the price of HANA. It easy to take this one-sided approach, and of course, John Appleby never explains that he makes money implementing SAP and not Oracle. John Appleby had HANA resources he wanted to sell to customers at the time of this publication. I believe he now heads consulting at Bluefin Solutions or what is now called MindTree.

#5 – SAP HANA is a Cloud Platform

“SAP HANA was always envisioned as a cloud platform, despite its beginnings as an analytics database. The HANA Cloud Platform brings the capabilities of a full-scale cloud application platform for developers and ISVs alike.”

I have covered the HANA Cloud Platform in the article, Was the HANA Cloud Platform Designed for Cloud Washing? Even years later very few people use the HANA Cloud Platform, or now the renamed SAP Cloud Platform. And this is the common problems of John Appleby’s predictions. None of them come true. And they are not predictions as much as they are biased fueled conjectures of what SAP would like to happen. In fact, SAP has waved the white flag of surrender on SAP Cloud although they attempted to put a happy face on the development. This is covered in the article How to Best Understand SAP’s Multicloud Announcement.

False Information About the HANA Enterprise Cloud

“The HANA Enterprise Cloud brings managed-cloud-as-a-services capabilities for businesses who would previously buy on-premises databases, and includes a partnership with IBM SoftLayer.”

No, that never happened and did not look likely to happen.

“SAP S/4HANA will be available in the public or private cloud, depending on your requirements – or indeed on-premise. One thing is worth noting: S/4HANA is cloud-first, and on-premise second. Cloud users are first-class citizens in S/4-land.”

No that is also misleading. S/4HANA is available in either the public or private cloud, but SAP has very few customers using the public cloud. This is because most S/4HANA customers will require customization, and that eliminates the public cloud. And in fact, SAP also has few customers on the private cloud. In fact, there is no reason to use SAP for any hosting on anything but the acquired applications (SuccessFactors, Ariba, Fieldglass, etc.) The vast majority of S/4HANA implementations have been on premises.

“This doesn’t diminish from the fact that many enterprise software customers still want to put their database on-premise – that will continue, especially in regulated industries for the foreseeable future, but it is a nod to the fact that cloud software is the future, even in the Enterprise.”

This is true because S/4HANA is an inferior fit for the cloud. This is covered in the article Why S/4HANA is a Poor Fit for the Cloud.

Final Words

“When Steve wrote his blog in 2012, the FUD from Oracle was focussed around how HANA wasn’t mission critical, how it didn’t work and didn’t scale. Looking back at this in 2015 it’s clear that HANA has come through that FUD unscathed, and Steve’s points were spot on – in fact just as valid as they were back then, which is why I didn’t repeat them.”

I don’t know why this is considered FUD. HANA was very new at that time and was unstable. I have no association with Oracle, but Oracle’s statements check out. SAP has a problem bringing out new products. This was true of SPP, EWM, PLM and has been true of S/4HANA. SAP brings out products before they are ready and then uses customers as guinea pigs.

HANA, even in 2017 continues to be a very high maintenance database. And it is all of this with no advantage over Oracle 12c. So the question that should be raised is why anyone would buy it, especially when one considers all of the indirect access liabilities, as is discussed in the article The HANA Police and Indirect Access Charges.

False Statement About Oracle Standing Still

“What’s even more interesting is how Oracle has stood still since 2012 whilst HANA has delivered more and more capability. Now, hundreds of the world’s biggest businesses are running their transactional systems on SAP HANA and new business applications like S/4HANA have arrived that do things that Oracle cannot do.”

I have addressed this. Oracle 12c was a major upgrade with many improvements. This paragraph is entirely false.

“The conversation we are having around the Oracle FUD is distinctly different from the one we had in 2012. Now, Oracle are saying that SAP HANA isn’t actually as fast as Oracle (benchmark it yourself if you doubt that), that SAP doesn’t understand the cloud and that SAP on Oracle is the smart choice.”

Why doesn’t SAP produce a benchmark that supports what John Appleby is saying? So customers must now benchmark HANA? Will SAP provide a free copy of HANA and assist with the tuning and provide that tuning for free? Is this a joke? Does Appleby have experience with how database benchmarking works?

SAP Gets the Cloud?

And SAP does not understand the cloud for S/4HANA. SAP only has had success in the cloud in applications that they acquired. So this statement is true. Oracle is not that cloud-oriented either, but that is another question.

“I look forward eagerly to revisiting this conversation in 2018 and seeing how the world has changed once again. My sense is we will be living in a very different world then!”

It’s 1/2 of the year until 2018. And everything listed by John Appleby has proved to be incorrect. And we are living in mostly the same world regarding SAP as we were living in back in 2015.

Disclaimer

Unlike John Appleby and all writers for Bluefin Solutions, Brightwork Research & Analysis has no relationship with SAP and is not distributing false information for SAP, Oracle or any other vendor.

John Appleby should have declared that he was releasing SAP marketing information to get business for HANA implementations.

How Much Do You Know About?

SAP HANA Quiz

This quiz will ask basic questions around SAP HANA.

HANA & S/4HANA Question Box

  • Have Questions About S/4HANA & HANA?

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References

*https://blogs.saphana.com/2015/04/08/oracle-wont-tell-sap-hana-part-2/

The Real Story on ERP Book

ERPThe Real Story Behind ERP: Separating Fiction From Reality

How This Book is Structured

This book combines a meta-analysis of all of the academic research on the benefits of ERP, coupled with on project experience.

ERP has had a remarkable impact on most companies that implemented it. Unplanned expenses for customization, failed implementations, integration, and applications to meet the business requirements that ERP could not–have added up to a higher Total Cost of Ownership for ERP were all unexpected, and account control, on the part of ERP vendors — is now a significant issue affecting IT performance.

Break the Bank for ERP?

Many companies that have broken the bank to implement ERP projects have seen their KPIs go down— but the question is why this is the case. Major consulting companies are some of the largest promoters of ERP systems, but given the massive profits they make on ERP implementations — can they be trusted to provide the real story on ERP? Probably not, however, written by the Managing Editor of SCM Focus, Shaun Snapp — an author with many years of experience with ERP system. A supply chain software expert and well known for providing authentic information on the topics he covers, you can trust this book to provide all the detail that no consulting firm will.

By reading this book you will:

  • Examine the high failure rates of ERP implementations.
  • Demystify the convincing arguments ERP vendors use to sell ERP.
  • See how ERP vendors take control of client accounts with ERP.
  • Understand why single-instance ERP is not typically feasible.
  • Calculate the total cost of ownership and return on investment for your ERP implementation.
  • Understand the alternatives to ERP.

Chapters

  • Chapter 1: Introduction to ERP Software
  • Chapter 2: The History of ERP
  • Chapter 3: Logical Fallacies and the Logics Used to Sell ERP
  • Chapter 4: The Best Practice Logic for ERP
  • Chapter 5: The Integration Benefits Logic for ERP
  • Chapter 6: Analyzing The Logic Used to Sell ERP
  • Chapter 7: The High TCO and Low ROI of ERP
  • Chapter 8: ERP and the Problem with Institutional Decision Making
  • Chapter 9: How ERP Creates Redundant Systems
  • Chapter 10: How ERP Distracts Companies from Implementing Better Functionality
  • Chapter 11: Alternatives to ERP or Adjusting the Current ERP System
  • Chapter 12: Conclusion

How John Appleby Was So Wrong About His HANA Predictions

Executive Summary

  • John Appleby, with a sales quota for SAP services under Bluefin Solutions, provided an enormous amount of false information about HANA.
  • John Appleby’s statements are highly unrealistic and Appleby seems to have little concern with what is true.
  • We analyze John Appeby’s article for accuracy.

Introduction to John Appleby’s Prediction on HANA

For reasons that I do not know, John Appleby of Bluefin Solutions made an agreement with SAP and became one of the major proponents of HANA. As well as a major source of false information about HANA. And also a source of false information about competing databases like Oracle and DB2 that the deliberately misrepresented. John Appleby did this far more than any other representative from other SAP consulting companies. We will review the accuracy of John’s article titled 2013, the Year of the Database.

The Quotations

John Appleby begins his article with the following quotation.

“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.”

I don’t analyze financial statements, so I am not going to comment on the numbers. Secondly, SAP has a habit of exaggerating the financial performance and misstating the sales of a product early in its life cycle. What I focus on is actual implementation. On projects, even four years after this article was written HANA is still primarily used with BW.

The Focus on the Implementations

What I focus on is actual implementation. On projects, even four years after this article was written HANA is still primarily used with BW. It does not seem to be growing fast. It would be impossible for it to be the “fastest growing enterprise software product – ever.” The fastest growing overall vendor or provider ever I believe is Amazon AWS, something I cover in the following article. The 23 Largest Software Vendors in the World. Therefore one of their primary products would be a good candidate for the fastest growing product ever. Another candidate would be SAP’s R/3 system. But that growth was in the 1980s and 1990s. SAP is not growing very rapidly, so it would be unusual if it presently had the fastest growing application of all time currently.

Appleby’s Ridiculous Prediction About HANA’s Growth

“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:”

Product Availability

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!

Why is HANA an awesome database and technology platform?

Just Copying Things from Oracle or Other DBs?

All of these things mentioned above ran on Oracle’s database at the time of this article’s publication. My research has concluded that there is no reason to migrate to HANA and that HANA compares poorly to Oracle 12c as I cover in this article HANA Versus Oracle 12c.

“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?”

Who cares, and why would you want to? After the Brightwork research into HANA versus Oracle 12c, where 12c added column oriented capability to its database (in response to HANA) what is the need to move to HANA? John Appleby is relying on some assumptions that have proven to be untrue. I cover this topic in depth in the article When Articles Exaggerate HANA’s Benefits.

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.

HANA’s Cost

HANA is the most expensive database you can buy. We now know that HANA is priced per GB and that it is quite expensive per GB. We also know that SAP has exaggerated the compression claims, so the size of the database will be larger than whatever SAP estimates. This topic is covered in the article How to Deflect You Were Wrong About HANA. 

Also, I don’t know what is going on with all of these exclamation points, but I am beginning to feel like I am reading marketing material. What is this sentence?

“Impressive Analytics bundles for new BI customers, at 20% in addition to your BI Suite license cost….”

Is that just taken from the SAP marketing or sales literature? Again what is with all the exclamation points? I don’t know anyone who is serious who writes like this.

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

What This Means

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.

The last part of this paragraph makes no sense. HANA is sold per GB, while Oracle is unlimited. The pricing is not at all equivalent, but HANA is quite a bit more expensive than Oracle. John Appleby would not have any idea what the pricing would be comparatively. And once again, this sounds like SAP sales information. The open question is why John Appleby sounds like an SAP account executive.

“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!

A Huge Number of Items

These are a lot of items. But the assumption throughout is that these are successful additions. But just because SAP is working on something or releasing something does not speak to its quality. For example, Hadoop is mentioned in this list. However, I can’t think of any reason one would want to connect HANA to Hadoop. And in fact, SAP is very limited in the market for unstructured data.

SAP wants to be associated with Hadoop because of Hadoop’s success and credibility in the space, but it simply is not there even now, and this is after four years as passed.

“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!

The explanations points seem like a strange flourish to apply. It brings up the question of how technical John Appleby actually is.

Sybase as an Acquisition

Sybase as an acquisition has not been anything close to what was advertised. Sybase’s vaunted mobility offerings turned out to be completely overrated and have really made no impact on SAP’s mobility capabilities. SAP has also had problems doing much with Sybase’s databases, and the revenues for Sybase’s databases are on the decline.

As John points out, getting the messaging is important, but something he leaves out is that getting accurate messaging is more important. John Appleby provided highly inaccurate information on S/4HANA as well as HANA. So he was part of the HANA bubble that took advantage of the product being new to misinform.

How does John Appleby know that HANA is a better choice than Oracle (or other database vendors for that matter?).

The reason I ask is that it is now obvious that it isn’t. Painfully obvious in fact. So why was John Appleby so misinformed at this point in time? Did he simply accept everything SAP said? Did that combine with his sales quote to make him want to believe it?

Appleby’s Enormous SAP Bias

“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 developer licensing for SAP HANA, Sybase IQ and Sybase ASE with click-through licenses.
  • – 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.”

Why Appleby Continually References Back to HANA

I think there is a lot to that. Oracle, IBM and Microsoft do have too much control over the database market.

Yet, the real opportunities to look at new databases are things like ProgressSQL, Hadoop, NoSQL. It is open source databases that offer a far better investment if one is looking to check out new offerings. There are many things that Oracle does, that is some applications that you don’t really need 12c. However, IT departments are also sensitive to how many different skills they have to staff.

“Final Words

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.”

Really?

Or was this partially purchased from the Sybase acquisition? Does John include the acquisitions that form the basis of HANA that SAP has been so quiet about as we covered in the article Did Hasso Plattner and His Ph.D. Students Invent HANA?. Is, is an amazing job of building a database business if you simply acquire most of it?

Appleby as SAP Mouthpiece

Is John Appleby posing here for SAP?

“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?”

Here John is asking a question he does not want the answer to.

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

Asking the Question

I feel like someone has to ask this question. Isn’t capitalize on the SAP install base to grab land from Oracle, IBM and Teradata anti-competitive? If capitalizing on the SAP install base to get companies to purchase database software they would not ordinarily purchase, it sounds like it is. Why does John Appleby want one monopolist to overtake other monopolists? Let me venture to say that this is because John Appleby leads a consulting company that makes more money if SAP does this. So how objective would we consider John Appleby to be. Should companies be following John’s advice?

“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.”

No, this prediction was wrong. Four years later none of these predictions made by Appleby have come to pass. Why were his predictions so off? Well, I cover in the article on The Effect of Forecast Bias. I a person is paid to think and forecasting one way, they tend to forecast way. This is what happened to John Appleby. Another issue is the bias of his source. John Appleby’s source is almost entirely SAP in this article. And SAP is an unreliable source of information on new products.

Conclusion

This article was not so much written by John Appleby as it was simply John Appleby compliantly copying and pasting what SAP told him. SAP needed to release false information about HANA, but they needed to use a surrogate. For whatever reason, they chose John Appleby. Either that or John Appleby lobbied for the role and put Bluefin Solutions reputation on the line. But fortunately for Bluefin Solutions, almost no one checks on people’s track records. This allows people to issue inaccurate forecasts again and again. If you get on board with SAP, what will often happen is that SAP will give you business.

If you get on board with SAP, what will often happen is that SAP will give you business.

SAP wants customers to be tricked into HANA by any means necessary. Once they do this, they further cut off their customers options and can redirect them to more SAP database products.

Brightwork Disclosure

Financial Bias Disclosure

This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

HANA & S/4HANA Question Box

  • Have Questions About S/4HANA & HANA?

    It is difficult for most companies to make improvements in S/4HANA and HANA without outside advice. And it is close to impossible 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://blogs.sap.com/2013/01/02/2013-the-year-of-the-sap-database/

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

Analysis of John Appleby’s Introductory S/4HANA Article

Executive Summary

  • Analysis of John Appleby’s S/4HANA Article

Introduction

In this article, I will review quotes from Bluefin Solutions, that has been one of the greatest promoters of S/4HANA and HANA.

The Quotations

When SAP built R/3, it was built to run on any database (AnyDB), and used the capabilities of the lowest common denominator. This led to tremendous complexity in the software design which has persisted through over two decades.

This is untrue and comes from a position of strong bias. This was an important component to SAP’s success, and in fact, most ERP vendors do the same thing. It has not lead to tremendous complexity in the software design of any other ERP system. And notice how no other ERP vendor is moving to a single database in their ERP systems.

In doing so, SAP built applications based on the lowest common denominator of all database features, and was unable to take advantage of database-specific functionality like stored procedures.

Well, this problem does not seem to bother other ERP vendors. And let us discuss stored procedures as this a common line of reasoning used by SAP. A stored procedure is where logic that was in the application layer is moved to the database layer. The concept is that code that is stored in the database is faster than that stored in the application logic. The problem is that SAP presents this is a universal virtue when in fact, many computer science professors debate whether stored procedures are a good idea. I predict that eventually, SAP will need to open up S/4HANA to run on any database, and when they do, they will simply move the code from the database and put it back into the application layer, and probably won’t say much about it.

With S/4HANA, SAP is rewriting the software layer to take advantage of the tremendous performance of SAP HANA, which leads to a dramatic simplification of the data model and software. Data size is reduced 10:1 and even the number of database tables is reduced 10:1 in many areas.

HANA does not have a performance advantage over competitive databases. This is covered in the article What is the Actual Performance of SAP HANA. In addition to SAP not having benchmarks that back any of this up, information coming from S/4HANA projects is that it is not much faster than was ECC.

SAP S/4HANA is no less real-time, but it is simpler too.

This is also incorrect. First S/4HANA is a much more difficult implementation than ECC was because S/4HANA is still so immature and because of all the changes. The entire proposal of S/4HANA being simpler is deconstructed in the article Does S/4HANA Have a Simpler Data Model?

It’s so fast that it does not need a separate operational analytics system or data warehouse.

HANA is an analytics platform. But it is not a transactional platform, which is why SAP stopped releasing transaction processing benchmarks. John Appleby should be more specific. HANA is faster for analytics and only faster for analytics.

It is the platform for all of SAP’s innovation. Because it is so fast, it is no longer necessary to hold all of the duplicate data in a transactional system including calculations like percentages, totals, indexes and aggregates. This leads to a much smaller data footprint and dramatically faster processing.

Well, that is unfortunate. It means that SAP is doing nothing outside of S/4HANA. So apparently all the non-S/4HANA applications that SAP sells are not receiving development and are becoming dated in the market.

The rise of cloud platform-based competitors like Salesforce and Workday means that applications exist that are deeply integrated into the database layer, and perform better for it.

Actually Salesforce and Workday don’t spend any time marketing around their database. This is a very big claim, it might be true, John Appleby presents no evidence for it. Why are Salesforce and Workday more “deeply integrated” into its database than any other vendor.

There is less of a focus on openness of what platform software runs on, and more of a focus on openness of integration and APIs. The DBA no longer has the power-base in the Enterprise.

This is really a spurious and dishonest statement. The two items John Appleby is discussing here are unrelated to one another. Secondly, SAP has no history of having openness of integration. SAP makes the most difficult to integrate applications in enterprise software, and this is done purposefully to redirect customers to purchase SAP’s not ERP applications. So what has happened is that while SAP was open to databases and close to integration, now SAP is both closed on integration and closed in database options.

SAP built its own database with SAP HANA, that has the capability to be incredibly differentiating, but performs much like any other database when running the “lowest common denominator” code.

HANA is not differentiated. HANA is far poorer performing than even its benchmarks due to the immature nature of HANA and the fact that SAP is a Johnny Come Lately in the database space. But even from the benchmarks area, HANA is beaten by Oracle 12C and beaten quite easily as the article Which is Faster, SAP HANA Versus Oracle 12c.

For these three reasons, SAP had to re-platform to what it calls “the fastest mover” – its SAP HANA platform. Unfortunately, SAP HANA is sufficiently innovative that the rewritten S/4HANA software performs terribly on the traditional RDBMS systems.

HANA is in fact a RDBMS, although not a “traditional RDBMS.” HANA is a column oriented rather than a row oriented design. However, Oracle 12c performs better than HANA in benchmarks.

It is difficult to see what is innovative about HANA as Sybase IQ was a column-oriented database that preceded HANA by over a decade. SAP and Bluefin seem to be actively deceiving customers and readers as to what the history of column-oriented databases and the use of memory and SSD in order to push them into making a purchase.

S/4HANA may run terribly on a traditional RDBMS, but for example, Oracle 12c has identical and superior abilities to HANA (for some time now, but not when Appleby wrote this article). Although the overall benefit to putting any ERP system on a column-oriented design is going to be small. So SAP’s overall premise is weak and should not be accepted.

The primary extension framework for all S/4HANA systems is the HANA Cloud Platform (HCP) Extensions. This allows customers, SIs and ISVs to extend S/4HANA in a compatible way.

It is been over 2 years since this article, and HCP is still barely used. I covered this in the article Is HANA Cloud Platform Designed for Cloud Washing? What John Appleby predicted here has still not come true.

Currently, there is support for core finance (GL). This will be extended to Logistics in 2015, and other modules will follow. It’s worth noting that the existing Business Suite code lines are backwards compatible with HANA, so all the existing supported modules will run.

Over two years after this was written S/4HANA still has very few implementations.

There are some generic IT-based business case points for SAP S/4HANA: reduction in data footprint, TCO, development costs and faster transaction processing and reporting.

All of these items have proven to be incorrect.

  • TCO Reduced?: The overestimation in the reduction of the footprint is covered in this article How to Best Understand the Price of HANA. TCO has to go up with S/4HANA because immature applications that have few people with implementation experience increases costs. This is covered in the article How to Best Understand the TCO of S/4HANA.
  • Development Costs Going Down?: There is no evidence that development costs go down. Just the opposite actually. Development costs go up because S/4HANA breaks every single customization and every single integration that was previously used because of the changed data model. This is covered in the article How to Best Understand Customizations and SAP S/4HANA. S/4HANA will perform better in reporting but will perform worse in transaction process.

It’s clear that cloud computing is SAP’s stated direction. SAP S/4HANA will have three modes – a Public Cloud, Private Cloud, and on-Premise. It will be “cloud first” approach and the cloud versions will provide innovation earlier than the on-premise version.

Wong again. This is a prediction that bent the opposite way. The few S/4HANA implementations that have occurred have been almost entirely on premises. In the future, almost all S/4HANA implementations that are “cloud” will be private cloud, or hosted because S/4HANA in almost all cases will be customized. This means that SAP will never be able to offer a very compelling argument for S/4HANA in the cloud because the costs will not be much lower than on premises S/4HANA.

The Concur, Fieldglass, Ariba and SuccessFactors clouds are already truly cloud multi-tenant.

This is true. It also has nothing to do with S/4HANA. All of the applications listed above were truly cloud multi-tenant before SAP acquired them.

The Public Cloud version will use database multi-tenancy, which is quasi-multitenant from a cloud perspective. ABAP Code-lines, configuration tables etc. will not be shared yet between customers on one SAP HANA container database. This is expected to come in time, as SAP HANA supports true cloud multi-tenancy.

Wrong, for reasons explained in the previous section.

SAP S/4HANA projects will be faster and cheaper, and there will be less time spent doing configuration and development. Business Consulting skills will be in-demand, but ERP configuration skills will slowly wane away.

Nope, S/4HANA projects have been and will continue to be slower and more expensive. That is what happens when you implement software with a lot of changes and that is immature. This is entirely obvious to anyone who has worked in software implementation.

Do note that from a consulting perspective, the transition to S/4HANA will take 10 years or more – Enterprise ERP systems are extremely sticky.

Yes, this is true. S/4HANA implementations will also take a very long time. They are an excellent source of consulting revenue unless the project gets canceled. Which has been happening with high frequency with S/4HANA implementations up to this point.

For various reasons, SAP S/4HANA is a new product SKU, which means that it does have to be purchased by customers. Existing customers will not get SAP S/4HANA licenses included in the maintenance of their SAP Business Suite, but existing SAP Business Suite for SAP HANA customers are covered.

There is one reason for this, not various reasons for this. SAP intends to double charge customers for what should be a free upgrade. This is covered in the article Why S/4HANA Should be Free. It is telling that John Applebly is so under SAP’s control, that he cannot admit an obvious truth as to why S/4HANA has to be repurchased by companies that have been paying 23% or more on support for many years.

Conclusion

This is and article that shows signs of an author having any independence from SAP. It contains a very large number of statements that are false and many predictions that never came true.

Bluefin Solutions has been one of the least reliable sources of information on S/4HANA and HANA since these products were introduced. This article may as well have been published by SAP marketing, and represents what SAP would like to be true, but is not what is in fact true.

Bluefin Solutions is an SAP consulting partner, and as such, they are not allowed to publish any information on SAP without SAP reviewing it and approving it. In this sense, they are mindless repeaters of information from SAP marketing. But they present their information with great confidence as if they have some special insight or have somehow independence from SAP. Their primary reason for publishing any information on any topic is to convince customers to hire them to implement SAP. And that is, of course, a major problem of bias.

See our The S/4HANA Implementation Study. for real story and details on actual S/4HANA implementations.

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References

https://www.bluefinsolutions.com/blogs/john-appleby/february-2015/the-sap-business-suite-4-sap-hana-(sap-s4-hana)

The Real Story on ERP Book

ERPThe Real Story Behind ERP: Separating Fiction From Reality

How This Book is Structured

This book combines a meta-analysis of all of the academic research on the benefits of ERP, coupled with on project experience.

ERP has had a remarkable impact on most companies that implemented it. Unplanned expenses for customization, failed implementations, integration, and applications to meet the business requirements that ERP could not–have added up to a higher Total Cost of Ownership for ERP were all unexpected, and account control, on the part of ERP vendors — is now a significant issue affecting IT performance.

Break the Bank for ERP?

Many companies that have broken the bank to implement ERP projects have seen their KPIs go down— but the question is why this is the case. Major consulting companies are some of the largest promoters of ERP systems, but given the massive profits they make on ERP implementations — can they be trusted to provide the real story on ERP? Probably not, however, written by the Managing Editor of SCM Focus, Shaun Snapp — an author with many years of experience with ERP system. A supply chain software expert and well known for providing authentic information on the topics he covers, you can trust this book to provide all the detail that no consulting firm will.

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  • Examine the high failure rates of ERP implementations.
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  • Calculate the total cost of ownership and return on investment for your ERP implementation.
  • Understand the alternatives to ERP.

Chapters

  • Chapter 1: Introduction to ERP Software
  • Chapter 2: The History of ERP
  • Chapter 3: Logical Fallacies and the Logics Used to Sell ERP
  • Chapter 4: The Best Practice Logic for ERP
  • Chapter 5: The Integration Benefits Logic for ERP
  • Chapter 6: Analyzing The Logic Used to Sell ERP
  • Chapter 7: The High TCO and Low ROI of ERP
  • Chapter 8: ERP and the Problem with Institutional Decision Making
  • Chapter 9: How ERP Creates Redundant Systems
  • Chapter 10: How ERP Distracts Companies from Implementing Better Functionality
  • Chapter 11: Alternatives to ERP or Adjusting the Current ERP System
  • Chapter 12: Conclusion