Diginomica’s Compliant Coverage of S/4HANA

Executive Summary

  • How to Perform “Access Journalism”
  • Diginomica is Pitched by a Senior SAP Resource
  • Howlett Prepares His Softball Question
  • Swartz Misunderstand’s Howlett’s Question and Goes Off On Digital Transformation Tangent
  • Swartz Shows he Misunderstands Supply Chain Management
  • Howlett Gives “His Take”

Introduction

In this article, we will cover Diginomica’s coverage of S/4HANA.

Diginomica is Pitched by a Senior SAP Resource

As is normally the case, Diginomica receives most of its information about SAP by interviewing senior resources at SAP.

As has become customary over the last year, I spoke with Markus Schwarz SVP and general manager SAP S/4HANA as part of the conversations around SAP Q1 FY2017 earnings.

The headline new adds of 400 customers in the quarter caught everyone’s attention as did the fact that nearly half of those adds were net new logos. The total customer count on S/4 now stands at 5,800 with SAP CEO Bill McDermott claiming that 80% of SAP customers are now in the SAP S/4HANA pipeline. Be that as it may, attention now turns to what’s happening on the ground.

Diginomica merely repeats what Bill McDermott says, without providing any analysis. Yet it is well known that Bill McDermott continually lies about SAP’s customer numbers. We covered this in the article How SAP Controls Perceptions with Customer Numbers and the article on Inaccuracies in the Q2 SAP Earnings Call.

Furthermore, notice how Diginomica quickly moves away from verifying what Bill McDermott said. Howlett states “be that as it may,” as it is assumed to be true. He then states,

“…attention now turns to what is happening on the ground.”

Well, we have evaluated what is happening on actual projects in the only independent research on S/4HANA in A Study on S/4HANA Implementations. But Diginomica would never get into that type of detail as they don’t actually have any idea what is happening on real implementations as virtually all of their information comes from going to conferences and talking with executives.

Regular readers will recall that a year or so ago, much of the S/4 attention was on S/4 Finance – or simple finance as it was known. There was a perception that SAP S/4HANA ran the risk of being a ‘rinse and repeat’ of 1990’s R/3 implementations where the focus was on driving out back office cost through process improvement.

Fast forward to today and the picture has changed dramatically. Schwarz told me that SAP is now seeing 33% as finance led, with 67% being what SAP terms ‘full stack,’ for the digital core, which includes supply chain.

Here Howlett states that the picture has changed dramatically….and why, because of something that an SAP executive told him. Has Diginomica thought for a moment that perhaps, not 100% of what SAP executives say is true? Has Diginomica thought for a moment that SAP spends quite a bit of its time manipulating the IT media?

Apparently not.

Secondly, the numbers quoted by Schwartz are false. At this time, which is eight months after this Diginomica article, there are almost no “full stack” implementations of S/4HANA. The primary reason? S/4HANA is still not a completed product and has maturity issues in every dimension. S/4HANA currently has major performance problems running MRP as is covered in the article MRP Performance Problem with HANA. Version 1511 of S/4HANA is missing intermediate document support in at least one module that we know of. There is a lengthy list of issues with S/4HANA that prevent it from being taken live as a production system. Other issues include the fact that Fiori’s future is in doubt, and S/4HANA is mostly similar to ECC, so the value in any upgrade is quite limited.

But as Diginomica has no one with implementation experience, and no interest in validating claims made by SAP, as SAP pays them, Diginomica will not be getting into those details.

The difference today is that (version) 16/10 got us the much needed supply chain content integrated and available for general use. Customers have been waiting for that and now you see fast adoption.

No, you don’t. Actually, eight months after this article was published, you still don’t see much adoption of S/4HANA much less fast adoption.

Howlett Prepares His Softball Question

I wanted to know whether in SAP’s view, this represents something of a tipping point in the sense that the company can expand its horizons beyond the obvious strategy of protecting the installed base. In that context, I wondered whether the persistent questions from user groups about the value proposition are fading away. So what do the ‘mittelstand’ (mid-size) customers think?

The largest customers have been the ones who moved first as you’d expect but I am also seeing momentum in mittelstand. I don’t see any difference in terms of adoption, I sometimes see it in geographies, we have a very good adoption in the mid-size.  There are no anomalies I can detect when you compare to SAP other software.

That is interesting, because we do see anomalies.

One major one is that there is a high concentration of S/4HANA test systems in Germany. Our hypothesized reason for this is that SAP is particularly influential in German companies. That is the attempted implementations in Germany of S/4HANA were due to political power, not to the product.

Of course there are different adoption patterns emerging so for example the large companies pick a line of business to go live fast to collect the experience and plan in parallel the large move. That’s a pattern we see firming up. That way you can create early proof points and trust. The days of the big bang are over.

This response seems to skirt the issue that in reality there has been little adoption of S/4HANA and an even smaller number of go-lives.

Swartz Misunderstand’s Howlett’s Question and Goes Off On Digital Transformation Tangent

The ongoing concern about value has plagued SAP since the launch of SAP S/4HANA and I wondered how SAP is tackling that in the context of so many buzzwords around digital transformation, AI, IoT and so on. In his quarterly remarks, McDermott didn’t fight shy of talking up those topics but in my conversation with Schwarz it became clear that SAP is matching its offering to specific business change patterns.

This is almost the first criticism offered by Howlett, but it is not pointed, but gets to the confusing hodgepodge of trendy technology terms that SAP marketing has used alongside S/4HANA in marketing materials.

It essentially sets up Swartz to say that SAP has this topic covered. Let us see his response.

Every industry is faced with some sort of transformation problem that requires they develop service based models. The consumer company that becomes a retailer, the chemicals company that becomes a supplier for automotive, the utility that starts selling solar panels. I’ve seen Air-as-a-service for example. Farm machinery companies are looking at how they can rent their equipment to many customers.

Swartz appeared to have not understood the question. Swartz thought Howlett was asking about digital transformation, so Swartz went to his “digital transformation” script. But the question was about confusing terminology around S/4HANA.

Notice that Howlett does not bother explaining to Swartz that this was not the question he was asking. Howlett is reticent to even clarify with his interview subject that the answer he gave is not to the question he was asking.

Swartz Shows he Misunderstands Supply Chain Management

With manufacturers we see this motion to get to a segment of one at a lot size of one at large scale. Nike, any sports apparel company today sees people ordering personalized through multiple channels and that impacts through the supply chain at a fine granularity.

This is Swartz discussing a topic that his not his area of expertise. Nike does not use a lot size of one. Swartz is essentially pitching the “make to order” trope that is both inaccurate, but has nothing to do with Howlett’s question.

These are very different ways of doing business that require a digital framework, which is what we are offering.

This sentence was meaningless.

On the ground, Schwarz says that his soundings among the top 50 partners suggests that they are seeing a boom in business that they’ve not seen since the 1990s. I have not tested that extensively although the partner representatives with whom I keep in touch tell me they are run off their feet.

First, that comment is ludicrous. SAP is not seeing anything like the growth that it saw in the 1990’s when it went through a major growth spurt due to the popularization of R/3 from R/2. Secondly, good luck taking any of those S/4HANA sales live. It is actually extremely rare to find consultants with a single S/4HANA implementation on their resume.

Howlett Gives “His Take”

This is an essential part of the article. It is where, after passively allowing his SAP interviewee to say anything without pushing back at all, Howlett attempts to appear impartial.

That was a good place to bring our conversation to an end. With SAPPHIRE just a few weeks away, Jon Reed and I will be on the ground, hunting down those customers, hopefully getting some of them on our video couch while at the same time checking in with colleagues in the field we have known for many years.

If what Schwarz says is validated in the manner he promises then I suspect we are in for interesting times as  SAP watchers. I, for one, will be glad. While it has always been possible to get glimpses of the vision, the marketing clarity has been absent as have the expression of outcomes.

Last year for example, SAP got a nasty shock when it realized customers had huge problems understanding how to achieve value for S/4. McDermott was quick to acknowledge that and tasked his delivery teams to fix the problem as quickly as possible. That work is done and in delivery.

Notice that the criticism here is that “customers had huge problems understanding.” When Diginomica makes any type of critique, it is related to something perceptual. Diginomica would not publish any actual shortcomings of S/4HANA. This is one-way Diginomica makes itself look independent. Furthermore, notice that McDermott is said to task his teams to fix things quickly. However, how can you implement a product that is not ready to be implemented?

Personally, I am looking beyond SAP S/4HANA as it has probably been best understood so far. What I now want to see are the business model patterns where S/4 and surrounding technologies provide the technology support for the kinds of transformation we are observing among industries. To that extent, I want to hear how SAP will support an expansive third-party ecosystem for industry solutions at what today appear to be the edge but which may well become the business core of the future.

This last quote by Howlett is a joke. If Howlett is not aware that SAP makes integration difficult for outside entities both technically and in the form of things like indirect access, then he is beyond hope. SAP is not about its software ecosystem, (although it is about its consulting ecosystem), it is about undermining the software ecosystem and taking as much as it can for itself. As with ECC, S/4HANA will be a nightmare for other software companies to deal with, as per SAP’s design.

Conclusion

Diginomica is part of the IT media system that allows SAP to get its story out to a series of paid off and compliant media entities that pretend to be independent.

HANA & S/4HANA Question Box

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References

https://diginomica.com/2017/04/26/sap-s4-hana-q1-fy2017-update/

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

The Problems with Diginomica on Steve Lucas on HANA, Oracle, IBM, AWS, and Microsoft

Executive Summary

  • One of the most quotable and inaccurate executives at SAP. He provided an enormous number of inaccuracies ranging from HANA being both a singular technology architecture to a singular technology platform. In this article, he confuses the meaning of magnanimous, calls out other vendors for greedy. (Seriously??) And how SAP is all about hosting its applications and even has the broadest cloud portfolio offering.
  • In other words, it is a typical Steve Lucas article.

Introduction

In this article, we will review both an article by Diginomica as well as comments made by Steve Lucas of SAP. This article in Diginomica is a real test of manhood or one’s patience. Steve Lucas repeatedly lies in the article and Diginomica demonstrates its subordination to SAP by allowing him to say anything he likes unchallenged.

Join us on this journey as we analyze this delectable article from Diginomica.

Let the Misleading Quotations Begin!

“Lucas’ vision for SAP centres around two different proposals. Firstly, that SAP’s technology offering is now completely modular (although there are exceptions to this). This means that customers no longer have to buy into a full ‘suite’, they can pick and choose elements of the SAP platform they wish to make use of – whether that’s the new SAP Cloud for Analytics, the HANA Cloud Platform, Vora or SuccessFactors.”

Diginomica simply accepts this but without observing that this is not the way that SAP works on accounts. SAP uses the initial sale of a product to push more and more SAP into an account. In fact, the number of companies that SAP products that do not use the ERP system are small. For example, the companies that use HANA but don’t have SAP’s ERP system is non-existant. SAP is an oligopolistic software company that competes through account control. SAP is as closed a system as there is in enterprise software.

Diginomica just allows this statement from Steve Lucas to slide right by them.

Secondly, the products mentioned by Steve Lucas, SAP Cloud for Analytics, HANA Cloud Platform or Vora are very lightly implemented products with weak futures. HANA Cloud Platform is not particularly useful and is designed by SAP marketing to both cloud wash, and HANA wash other products.

Was HANA Designed for Cloud Washing?

Was HANA Designed for HANA Washing?

Vora is a product that has no reason to exist. It was designed to get HANA to piggyback on the success of Hadoop by co-opting it. This is covered in the article How Accurate is SAP on Vora?

SuccessFactors is also misleading. SuccessFactors stands “alone” because SuccessFactors was an acquisition, and still after over five years after the acquisition, there are many complaints about SuccessFactors’ integration to the rest of ERP.

Overall, this sounds like a line by Steve Lucas is quite deceptive.

A Brave New World of Modular SAP?

“This makes sense in world where buyers are less and less seeing the benefit of going ‘all in’ with one vendor to solve their problems. We see more and more companies picking and choosing cloud products, with lower entry points, that they then themselves attempt to tie together. This is something that Lucas was keen to highlight that SAP recognises. He said:

The pricing for [Cloud for Analytics] in US dollars, starts at $25 per user, per month. That’s incredibly accessible. If you think about the pricing for the HANA Cloud Platform, it starts at a couple hundred dollars per month, for a site. This is achievable, accessible technology.”

This is because Cloud for Analytics is so unsuccessful that SAP is willing to give it away for free virtually. SAP’s software is the most expensive on a TCO basis in every category that Brightwork has calculated. Our online TCO estimators are available in this article.

SAP is Giving Up on Account Control?

“This is a fully modular architecture; you can use any part of this. If all I want to use is Cloud for Analytics and nothing else from SAP, that’s perfectly fine. And it just works. If all I want to use is HANA, that’s fine.”

No that is not fine.

Steve Lucas may want to explain (or Diginomica might want to) that SAP does not work that way. There is no one using Cloud for Analytics and nothing else, or HANA and nothing else. Also, if a customer connects a non-SAP application to HANA, would that be indirect access? How “fine” is SAP with joining non-SAP systems to SAP without asking for more money?

Secondly, SAP is not a modular architecture. SAP offers the most demanding applications to integrate with other applications. In fact, it has been part of SAP’s long-term strategy. SAP first sold companies their ERP system. Then, as they began to develop other products that both connected to the ERP system and could not compete against vendors’ applications, they along with their coalition of the billing promoted the concept that other applications were so difficult to integrate to SAP that the only safe choice was to select SAP to connect to the ERP system. This is why it is ludicrous and entirely dishonest for Steve Lucas to talk about some modular architecture. Steve Lucas is frustrating because is so lacking in knowledge about SAP that its difficult to tell if he is completely ignorant on subjects that he covers or if he is merely lying.

On S/4HANA

“However, he notes that this isn’t entirely true for S/4 (the big gambit). He said:

There’s technically one caveat, the one technology that does not work without HANA is S/4. This is the only interdependency in the architecture.

So in other words, to take advantage of S/4, you need to be running on the HANA platform already. Or to get to S/4, you need to roll out HANA. Or be going in all in with cloud.”

Brightwork Research & Analysis has analyzed and published HANA and S/4HANA in more dimensions than any other entity. We conclude that there is no reason to exclude other database vendors from running under S/4HANA. Both Oracle and IBM and most likely Microsoft have databases ready to be certified by SAP. SAP refuses to certify them to promote the sales of HANA.

The last part of the quote also makes no sense, as SAP has almost no S/4HANA customers in the cloud. Furthermore, there is not much of anything in S/4HANA to take advantage of. Analysis by Paul Coetser has shown that S/4HANA is 95% identical to ECC.

HANA as a Singular Technology Architecture?

“But alongside Lucas’ modular pitch, he also took time to explain the importance of HANA underpinning everything and being a singular technology architecture. He explained that this is important to the future of SAP and its customers because in the past it had wasted time trying to integrate.”

HANA is not a singular technology architecture, and we have spent enough time reading comments from Steve Lucas to know that he would have no way of knowing if it were or were not true. Steve Lucas lacks technical credentials or a technical understanding of databases; we found this in a previous article from Steve Lucas that we analyzed called Analysis of Steve Lucas’ Article on What Oracle Does Not Want You to Know About HANA. In fact, he had not even been with SAP for very long when he made these statements.

Steve came over from an SAP acquisition that had nothing to do with HANA. HANA is made up of many areas that it relies upon to function. It is far more complicated to maintain than Oracle, IBM or Microsoft databases.

“Why HANA? Four or five years ago, the first thought that went through my head was, why does the world need another database?”

It didn’t (still doesn’t). It certainly doesn’t need databases that don’t add anything advantageous to the mix as we covered in the article What is HANA’s Actual Performance? Oracle and IBM and MS have spent a lot of resources emulating SAP and putting column store capabilities into their relational databases, however, at Brightwork Research & Analysis we question how necessary dual table type databases are as we cover in the article How Accurate Was the Bloor Research Article on Oracle?

“We had been building business applications for the past 35 years on other people’s technology stacks. It’s not a secret, we were using IBM’s, we were using Oracle’s, we were using Microsoft’s.”

That is true; it is not a secret.

Steve Lucas is Confused as to the Meaning of the Word Magnanimous

“We came to one magnanimous conclusion: it was too hard, it was too complicated, almost to the point of absurdity, to build a simple business application to create an outcome. It was too hard. We were spending all of our time integrating these various components instead of innovating our customers.”

This is a strange use of the word “magnanimous.” Magnanimous means charitable or altruistic.

Steve appeared to mean “grand,” or “profound.” What could be charitable or altruistic about coming the conclusion that supporting multiple databases is too hard?

We find it amusing that a top executive at SAP does not know how to use the word magnanimous.

Moving Away from Database Neutrality

SAP only recently moved towards offering HANA, and they only were able to grow the way they did because they offered database platform independence. Furthermore, SAP has revenues of over $20 billion per year. It is difficult to see how continuing to provide support for multiple databases was just too much work for SAP.

“We were confusing horizontal integration, with forward momentum. It’s not the same thing. Integration or tying components together is not the same thing as business innovation. This platform, the HANA platform, really dramatically simplifies that.”

No, it doesn’t simplify anything. HANA is reported as the most complex database to maintain that exists in the relational database space.

Furthermore, SAP had great success while being platform independent. So it was a winning strategy for many years. SAP had plenty of momentum while supporting multiple databases.

“And this singular approach to designing technology (combined with the modular approach to buying in most of the stack) enables customers to run a simpler environment, according to Lucas. Way more so than the likes of IBM or Oracle, he said.”

The evidence is that HANA is higher in maintenance than either IBM or Oracle. We cover this in A Study into SAP HANA’s TCO.

HANA as a Singular Technology Platform

“The HANA platform is a singular technology.”

Again, no it isn’t!

“Whether I’m using Oracle, IBM or Microsoft, I can think of four or five or six technologies that I would need to purchase from them to integrate in order to be able to do the same thing that HANA can do with one product and one copy of the data. That’s a nuance, but a huge difference in terms of your enterprise architecture.”

Once again, HANA has more components than any of these databases. Steve’s argument is shown to be ridiculous particularly when applied to Microsoft SQL Server, which is known as being so low in maintenance that it is often explicitly selected for this reason.

SAP Calls Out Other Vendors for Being Greedy?

“Microsoft, IBM and Oracle, while great companies, with really smart technologies, have every incentive not simplify your architecture. Why would they? Why would Oracle simplify their $10 billion database business into a $2 billion database business? That would be stupid for them to do. But we started out the way you should, which is a singular platform providing a radically different approach to how you build business applications.”

This quote is an absolute hoot, and it is delivered without a trace of irony.

SAP, the vendor with the highest TCO in software and with the most complex software in software — and very well known for having the most complex software — is the company that will reduce costs and simplify? This is covered in the article How to Understand the Declining Upgradeability of SAP Products.

Steve Lucas seems to lack the introspection not to be the pot calling the kettle black.

Ariba Ariba!

“However, Lucas was also keen to highlight the benefits that owning Ariba’s network has on application design for S/4 and the fact that SAP has built out its own data centre infrastructure.”

Ariba has virtually nothing to do with S/4HANA. At the time of Steve’s statements, S/4HANA had almost no go-lives that ran the business. That is SAP was able to trick companies into going live with S/4HANA, but it was an offline system.

Several years later (today) that has not changed much as is covered in the A Study into S/4HANA Implementations.

The number of companies integrating Ariba with S/4HANA in a live environment would be categorized as “the empty set.”

SAP is Really All About Hosting its Own Cloud Applications?

“Lucas said that SAP had no interest in building on the likes of Amazon Web Services (which the likes of Infor have done) because it doesn’t believe that this will cater to people’s data protection requirements.”

If Infor has anything like AWS, that is the first we have heard of it. Most likely Infor can host applications effectively, which SAP (outside of acquired products) does not have.

“There is no enterprise software company that has a business network like Ariba. Oracle, IBM and Microsoft do not have a network where a trillion dollars worth of trade happens on an annual basis. Or a billion dollars worth of trade, frankly. Who has a network like Ariba?”

Yes, that is true.

SAP Has the Broadest Cloud Portfolio Offering?

“None of them. We’re integrating that with our logistics applications, our inventory applications. The nuances are that we have the broadest cloud portfolio offering.”

But Ariba was acquired three years before this quotation was given. Why wasn’t Ariba already integrated into its logistics applications? Is it integrated now?

SAP has some cloud applications, but it’s difficult to see how they have the “broadest cloud portfolio offerings.” That prize would have to go to Salesforce. Although if we are talking about IaaS and PaaS, then the award would go to AWS. If we look by sales, SAP does not make that much revenue off of all of its cloud offerings. So by revenue, SAP is not anywhere close to Salesforce or AWS.

“We could have also said a long time ago that we were going to build this on AWS. It’s cheap. Why not? The reason why not is because of the healthcare laws and the data privacy laws, which are so different country by country. For us really we want to be able to deliver a consistent, safe and secure offering.

We built our own data centres for the HANA Cloud Platform, this is really important. The reason that we have not put the HANA Cloud Platform on something like AWS, is because AWS doesn’t adhere to all the global privacy laws where we operate. We actually own and operate our own data centres. That’s incredibly critical.”

This is……curious because several years later SAP “gave up the ghost” and promoted its multicloud policy, which is where it will promote its products being hosted on AWS and Azure. This is covered in the article How to best Understand SAP’s Multicloud Announcement.

..and then announced a further partnership with Microsoft and Azure which is covered in the article How to Interpret SAP and Microsoft’s 2017 Partnership Agreement.

These announcements contradict everything that Steve Lucas said.

Tapdancing Around On HANA Implementation Numbers

“During a Q&A with Lucas, I also got the opportunity to ask him about how many customers were live on the SAP HANA platform – where I asked for specifics with regard to the individual modules. Here’s what I got told:

First of all I will give you the aggregate number. Across this entire picture, we have 291,000 customers [this includes everything from Ariba, to HCP, to SuccessFactors, to Cloud for Analytics – everything].

In terms of how many are live, we are in the thousands of live HANA customers. It’s an interesting question. We are in a world now where we are approaching 10,000 customers on HANA and thousands of them are live. I almost view the number of live customers for any of these things as irrelevant. Cloud for Analytics we just introduced eight weeks ago and we have 1,200 customers signed up for the trial – are they all live? No they aren’t all live, but this is the kind of demand signal that says to me that says it’s pretty good. The HANA Cloud Platform we have around 2,000 live customers. We introduced the HANA Cloud Platform 18 months ago. I remember when we had 30 developers on the HANA Cloud Platform. We have over 1,000 developers focused on the HANA Cloud Platform. Our customers are doing a variety of things from medical scenarios, to customers that call us up and say they are an auto-manufacturer and they want to give their dealers a simple inventory website.”

How Full of it is Steve Lucas?

Steve Lucas being full of BS comes across in these types of answers. Steve Lucas’ response brings up no less than six questions on our part.

  1. Why would he say that “its an interesting question?”
  2. Why does he start off with the total number of customers that SAP has when the questions are how many HANA customers are live on HANA?
  3. Why does Steve Lucas mention the number of customers of HANA, when the question is how many customers are live on HANA?
  4. Why does Steve Lucas bring up the number of customers who have signed up for a free trial of Cloud for Analytics when the question is how many customers are live on HANA?
  5. The HANA Cloud Platform has nothing to do with HANA, except the name was incorrectly in the product’s name (which now is no longer the case as it has been renamed SAP Cloud Platform).
  6. Why is what scenarios SAP customers are performing being given as an answer to how many customers SAP has live on HANA?

Overall why does Steve Lucas take so many lines of text to answer a simple question? Here is the issue.

  1. Step One: Diginomica: How customers are live on HANA?
  2. Step Two: Steve Lucas: (Insert number)

Diginomica’s Serious Math Issues

“Based on these numbers, by estimates we are then looking at around 4-6% of the current SAP customer base that are currently in a position to move to S/4 (have bought into the HANA platform already).”

Where does Diginomica get that math? SAP claims 291,000 customers. Steve Lucas claimed thousands of customers live on HANA. We can assume this number is in the low thousands (or Steve Lucas would have stated 7000, 8000, etc..). Let us be charitable and set HANA to 3000 live customers. 3000/291,000 is 1%. But are all of these live HANA customers ready to use S/4HANA or is HANA installed below say BW? We ask because the most common applications that are used with HANA is BW.

We could get into more detail, but Diginomica’s math is quite ill-informed. A customer that has purchased merely HANA, but not done anything with it is not “in a position” to move to S/4HANA.

  • There was more from Steve Lucas in this article, but we ran out of patience.
  • Steve Lucas lies a lot and SAP has no consideration for whether its executives either continually lie, or have any idea what they are talking about.

But of course Diginomica finally, after dutifully repeating everything Steve Lucas had to say, with Steve Lucas only himself probably even knowing what he was talking about, gave their conclusion.

The way I see it, there’s nothing wrong with HANA or SAP’s pitch. It makes sense in isolation. But in the context of wider market changes, will buyers agree? I’m not entirely sure.

Wow….wow is all we can say to that analysis.

Conclusion

Diginomica does not have authors who have an authentic experience in SAP. This, combined with SAP paying Diginomica is why they are such reliable repeaters of SAP’s messaging. This is a perfect example of them serving as a tool of SAP. There was no analysis provided in this article by Diginomica.

Their approach is to write articles that appear even-handed while giving SAP a platform to get its message out.

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

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References

*https://diginomica.com/2015/12/09/saps-steve-lucas-on-why-hana-beats-oracle-ibm-microsoft-and-aws/

https://www.wsj.com/articles/SB10001424052702304019404577420511203619228

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