Getting Clear on SAP S/4HANA Simple Finance & Simple Logistics

Executive Summary

  • The reason that HANA in the name of S/4HANA tells us interesting things about what SAP is communicating to customers.
  • It is unheard of to place the database in the name of the application.
  • Simple Finance and Simple Logistics are immature applications.
  • S/4HANA’s Simple Logistics missed its release date.

Introduction to S/4HANA Naming

There has been quite a bit of marketing information written on SAP S/4HANA. It is hard to overstate how much.

The first introduction of SAP S/4HANA by SAP was quite confusing, and there has been another change since this first introduction. This article will (hopefully) help to explain what appears to be a moving target in SAP’s naming and strategy with its new ERP system.

Breaking Down the S/4 HANA Name

SAP S/4HANA is the new ERP system. The overall naming convention is strange and confusing all by itself. But this is the reason for its naming…according to Hasso Plattner.

  • The “S” is supposed to stand for simple.
  • “4” being what would follow “3” as in R/3. So this would translate to “Simple 4rth major incarnation of the SAP ERP system.”
  • HANA is the database
  • SAP S/4HANA is the ERP system, and HANA is the database is running on. Thus “S/4HANA.”

Why Put the Database as Part of the Name of the Application?

This is the first time that SAP has offered an application and then named the database within the name. SAP S/4HANA only runs on HANA (for now). However, it is either very uncommon or possibly unprecedented for any software vendor to declare the database that an application runs on as part of the name.

This would be like if Oracle only allowed JD Edwards EnterpriseOne ERP system only to run on Oracle, they would name it:

“JD Edwards EnterpriseOne Oracle 12C.”

SAP is naming things way because it is trying to emphasize how important HANA is to the new ERP system. In a future article, I will explain how this strategy is about to fall apart, but I will stick to the naming discussion for this article.

What is the State of Simple Finance?

For some time, the only part of SAP S/4HANA you could buy (i.e., that was released) was the finance area. It was referred to as “S/4 Simple Finance.” This is the first time that SAP released a module of the ERP system all by itself. All previous versions of SAP’s ERP system included the big four or SD, MM, PP & FI/CO. In fact, this integrated feature was SAP’s significant advantage when it came on the scene in the 1980’s and was it’s the main differentiator for many years.

S/4 Simple Finance represented the new version of what was the FI/CO module or financial and controlling in the ERP system.

With all the hype around S/4 Simple Finance, it has gone rather unobserved how strange it is for a vendor to bring out a single module of an ERP system all by itself. I have been scratching my head for over a year trying to figure out who would invest in a module of an ERP system, without getting the rest of it to connect to. With what I will explain, S/4 Simple Finance is now stranded due to development issues at SAP with the remainder of the S/4 suite.

Where Oh Where is Simple Logistics?

SAP has a bit of a problem that is not often discussed, but SAP as been telling companies to jump on board with S/4 Simple Finance because SAP S/4HANA Simple Logistics (which it would connect to) was coming right around the bend. Simple Logistics was the rest of the S/4 suite. SAP has historically put much more effort and functionality in finance than in the rest of the suite. But with Simple Finance and Simple Logistics, this is the first time they released the areas of their ERP application separately. That is with Simple Finance mostly done, and Simple Logistics still very much a work in process.

I was told by several people that I needed to jump on board with  Simple Finance because it was going to make everything so simple and it was of course SAP’s direction. After researching this, both reviewing statements around SAP S/4HANA’s proposed simplified data model as well as the supposedly simplified user interface in Fiori and found these proposals to be incorrect.

This is covered in two articles:

Missing S/4HANA Simple Logistics’ Release Date

The problem is that SAP has very significantly missed its release date on Simple Logistics.

Making so many changes at once to SAP S/4HANA was always risky with the timeline that SAP put out there. And now it is evident that SAP bit off more than they could chew.

Luckily, because so few companies implemented SAP S/4HANA, this will have little impact. Some German companies have implemented S/4 Simple Finance, but almost no companies outside of Germany. So for the vast majority of businesses, there will not be any impact. So it is a good thing that these companies passed on S/4 Simple Finance.

The Plot Thickens for S/4 HANA’s Name

As development has been doing its work, SAP marketing silently went through a change to the overall naming of the new ERP functionality. As I predicted the “simple” adjective is now gone. And S/4 HANA “overall” is now called S/4 HANA Enterprise Management.

SAP S/4HANA Enterprise Management now includes:

  • S/4HANA Finance (not “Simple Finance” mind you. Apparently finance is complicated once again!)
  • S/4HANA Human Resources (Success Factors) (I saw no mention of Old SAP HR so that module has likely and thankfully been removed)
  • SAP S/4HANA Sourcing & Procurement (Ariba) (I saw no mention of SRM or SAP’s pre-Ariba supplier product)
  • SAP S/4HANA Supply Chain (Production, Inventory & Warehousing) (Old PP, MM & WM)
  • SAP S/4HANA Manufacturing (Manufacturing Operations & Quality Management) (Old PP & QM)
  • SAP S/4HANA Sales (Order and Contract Management)

Can You Keep Up with SAP’s Terminology Changes on S/4HANA?

It is no easy feat keeping up with SAP’s S/4HANA terminology. SAP went through a period where they invested mightily in what was essentially a false marketing construct — that the new applications were somehow simple.

While little covered, SAP has a bumpy ride in trying to redo and introduce it’s new ERP system. Marketing is going through multiple name changes before the overall new ERP system is even ready to purchase. Simple Finance and Simple Logistics are now on their way out. SAP’s problems with its S/4HANA overall deadlines are a problem because SAP put so much of its credibility on the line that it would be able to bring out the rest of the S/4HANA suite, and it raises the question of when the real release date of the suite will be. And then, how much after the publication date will the application be ready for actual implementation.

Conclusion

SAP’s problems with its S/4HANA overall deadlines are a problem because SAP put so much of its credibility on the line that it would be able to bring out the rest of the S/4HANA suite, and it raises the question of when the real release date of the suite will be. And then, how much after the publication date will the application be ready for actual implementation.

At this point, it seems that S/4 Simple Finance was rolled out far too early. I was part of a sales team that was proposing SAP S/4HANA Simple Finance last year. Good thing that the companies we pitched this to, did not purchase this as it is likely that a full functional SAP S/4ERP system (with all the standard modules released) is even now some time away.

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

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References

I cover how to interpret risk for IT projects in the following book.

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

Risk Estimation and Calculation

Risk Estimation and Calculation

See our free project risk estimators that are available per application. The provide a method of risk analysis that is not available from other sources.

project_software_risk

How SAP HANA vs TeraData and Tableau Market Backend Technology

Executive Summary

  • SAP markets HANA far differently from Teradata or Tableau.
  • We evaluate these approaches.

Introduction

In a previous article, Has SAP’s Relentless SAP Push Paid Off? I cover whether SAP’s HANA major marketing push has provided the intended benefits? However, in this article, I provide several examples of how top competitors market their analytics.

How SAP HANA’s Competitors Market

A competitive analysis is important in this regard because my argument is that if a marketing concept is successful and it is eventually adopted by competitors.

However, focusing on in-memory computing has not been approved by competitors, at least nowhere near to the degree that SAP emphasizes the topic. That should tell SAP something. Let us take a look at two examples of leaders in the analytics space, which is the most relevant comparison to SAP HANA; the software vendors Teradata and Tableau.

Teradata

Teradata is the leader in data warehousing and is the record holder in substantial high-performance databases, however, while they use in-memory computing when it is beneficial, their marketing strategy is not so single-mindedly focused.

Tableau

Tableau’s success is very well known at this point, and it is the leader in its space. Tableau grew rapidly from a small base to become a dominant self-service BI vendor by taking business from larger BI software vendors. SAP purchased Lumia to compete with vendors like Tableau that are seeing most the growth in the BI market.

Look at these samples of how Tableau emphasizes their backend technology.

Here is one of Tableau’s main pages. I deliberately picked a page with the most emphasis on background technology. Most of Tableau’s web pages don’t bring up the backend technology at all.

However, even here, the background technology is a link — that is it is not the original pitch. If you want to select the link you can find out about the background technology. 

Upon clicking, this page comes up, and you can learn about their Visual Query Language for Data, etc…

It is available, but it is in the background. Tableau — as you can see if you visit their site, the user experience, flexibility and many other aspects are emphasized. Their underlying technology is there for those who want to know. However, they don’t lead with it.

Even the technical page discusses more about data than what database is used.

To go back to the first article, Has SAP’s Relentless SAP Push Paid Off?

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References

I cover the topic of software selection and how to interpret information from different sources in the following book.

Software Selection Book

 

SELECTION

Enterprise Software Selection: How to Pinpoint the Perfect Software Solution Using Multiple Information Sources

Mastering Software Selection

Software selection is a form of forecasting, just as any another purchase decision is a forecast of how successfully the purchased item will meet expectations. Forecasting is necessary because it is not feasible to implement each application under consideration before it is purchased to see how it works in the business.

The Importance of Software Selection

Software selection is the most important part of any software implementation because it is the best opportunity to match the software with the business requirements, which is the most important factor in determining the success of the project. This book explains how to get the right information from the right sources to perform software selection correctly.

What You Can Expect from the Book

Essential reading for success in your next software selection and implementation. Software selection is the most important tasks in a software implementation project, as it is your best (if not only) opportunity to make sure that the right software the software that matches the business requirements is being implemented. Choosing the software that is the best fit clears the way for a successful implementation, yet software selection is often fraught with issues, and many companies do not end up with the best software for their needs. However, the process can be greatly simplified by addressing the information sources that influence software selection.

This book is a how-to guide for improving the software selection process and is formulated around the idea that much like purchasing decisions for consumer products the end user and those with the domain expertise must be included. In addition to providing hints for refining the software selection process, this book delves into the often-overlooked topic of how consulting and IT analyst firms influence the purchasing decision and gives the reader an insider’s understanding of the enterprise software market. By reading this book you will:

  • Learn how to apply a scientific approach to the software selection process.
  • Interpret vendor-supplied information to your best advantage.
  • Understand what motivates a software vendor.
  • Learn how the institutional structure and biases of consulting firms affect the advice they give you, and understand how to interpret information from consulting companies correctly.
  • Make vendor demos work to your benefit.
  • Know the right questions to ask on topics such as integration with existing software, cloud versus on-premise vendors, and client references.
  • Differentiate what is important to know about software for improved “implement-ability” versus what the vendor thinks is important for improved “sell-ability.”
  • Better manage your software selection projects to ensure smoother implementations.

Chapters

  • Chapter 1: Introduction to Software Selection
  • Chapter 2: Understanding the Enterprise Software Market
  • Chapter 3: Software Sell-ability versus Implement-ability
  • Chapter 4: How to Use Consulting Advice on Software Selection
  • Chapter 5: How to Use the Reports of Analyst Firms Like Gartner
  • Chapter 6: How to Use Information Provided by Vendors
  • Chapter 7: How to Manage the Software Selection Process
  • Chapter 8: Conclusion
  • Appendix a: How to Use Independent Consultants for Software Selection

Risk Estimation and Calculation

Risk Estimation and Calculation

See our free project risk estimators that are available per application. The provide a method of risk analysis that is not available from other sources.

project_software_risk

Which is Faster HANA or Oracle 12C?

Executive Summary

  • SAP proposes that HANA has advantages in performance versus all other databases with a database that runs 100,000 times faster than any other.
  • The confusion on HANA vs Oracle performance due to the commingling of hardware speed and database design.
  • SAPs strategy for using HANA to lock out other database vendors (as claimed Teradata).
  • SAP’s conflict of interest in not certifying Oracle 12c for S/4HANA.

Introduction: How HANA Compares to Oracle

HANA is a constant source of discussion on SAP projects. The claims by SAP are enormous, but how many are true. You will learn about the debate and the truth on HANA vs Oracle from an independent source and from the multiple dimensions that are claimed by SAP.

The History of HANA

SAP has promoted HANA has run far faster than any alternative database, and this principally means HANA vs Oracle.

This has been the logic that it has used for why SAP would not port new applications, like S/4 (SAP’s new ERP system) to Oracle. (as Oracle has the largest market share of supporting SAP applications, although SAP also is targeting IBM and SQL Server)

This contention has few independent parties even investigating this issue.

A Recipe for Confusion on HANA vs Oracle: The Commingling of Hardware Speed and Database Design

One of the confusing aspects of HANA vs Oracle is that two different topics are commingled and communicated as if they are one topic.

  • One is the hardware issue, as SAP HANA requires moving the active database into memory.
  • A second aspect is the database design, which is the column based database.

SAP discusses these two topics as if they are the same subject.

One could say that SAP has done a poor job of explaining the distinction. I don’t think SAP is trying to be clear in this area and is primarily hoping customers are confused.

  • The less clear SAP’s customers are on where the potential benefits are coming from, the more the advantage swings to SAP when it comes to negotiating.
  • The more ability it has to market SAP HANA vs Oracle as a differentiated offering.
  • The more it can position SAP HANA as worthy of a serious price premium.

Something which goes undiscussed by SAP is how SAP HANA is both a technology strategy and a targeted strategy to push Oracle out of SAP accounts.

SAP’s Strategy for Locking Out Other Vendors

This is an extension of a strategy that SAP has used to great effect for decades, but with a slight twist. SAP kept other applications out of its customers by using the ERP system as a queen on the chessboard.

Queen

By declaring that all other SAP applications would integrate better with the queen, SAP’s customers could have lower risk implementations.

This strategy has been enormously successful, even after most vendors have come very close to SAP’s integration with their adapters.

One-Time horizontal competition — i.e., competition at the application layer. HANA is a twist on this block out strategy but takes it to the database layer. This is why SAP is so strongly positioning HANA vs Oracle. It is essentially preventing Oracle from competing with S/4 by not certifying Oracle’s database. Even though there is no reason that Oracle, IBM and SQL Server cannot fully support S/4HANA. 

The logic of the stored procedures placed into HANA is a cover for the fact that SAP is using S/4HANA’s exclusive certification to drive HANA sales.

The Real Opportunity with HANA vs Oracle?

It has been proposed to me that the real chance with HANA is for the company to place ERP and all other SAP applications on HANA. Then the analytics engine can sit right on the same hardware. And now no integration or transformation is necessary, and now analytics reports right off of the application tables.

Cognitive

However, wait one second. I know that is feeling mighty big in its britches after over five years of breathless conferences about the brave new world of analytics, and the new Big Data and overall analysts obsession (which has lead to far fewer benefits than originally proposed). However, are we now going to transform all of the hardware to be optimized for analytics?

  • Also, what about non-SAP applications? They won’t sit on HANA, so they do have to be integrated and transformed.
  • Will SAP now make the argument that those applications are legacy because they don’t sit on the “strategic platform” for the company?

Secondly, using HANA is expensive. Even more expensive than HANA vs Oracle.

HANA is Not Expensive?

Hasso Plattner has routinely argued that SAP HANA is not expensive. Typically Hasso Plattner will use the example of compression that is available in column-based databases to reduce the footprint. If you talk to SAP account executives, they will tell you that SAP HANA is expensive. Furthermore, they will inform you that HANA is very hard to position for this reason, once the price tag comes back, the customer balks.

It is a simple thing for Hasso Plattner to propose in interviews how SAP HANA could in some hypothetical sense be not too expensive. But all other sources point to HANA being quite expensive. And you will not be buying HANA from Hasso but an SAP account executive. Hasso’s accuracy lately has been off, and I don’t see analysts or the traditional IT media outlets recording this inaccuracy or commenting upon it. I have performed a detailed analysis of Hasso’s statements on HANA.

For example, Hasso proposed that companies are needed to move to S/4 Simple Finance (now just S/4 Finance). As I outlined in the article Getting Clear on S/4 HANA Terminology, SAP has missed its release date on the rest of the ERP suite, and its actual release date is unknown. Purchasing S/4 Finance, what is now a stranded application would have been a bad move.

After years of S/4 hype, S/4 can’t be realistically purchased (unless you count an immature stand-alone S/4 Finance as “realistic”) even if companies wanted to. 

The Fastest Database in the West (HANA vs Oracle)?

There is evidence building that HANA is not the speed champion that SAP says that it is. One of the primary performance weaknesses of HANA is very rarely addressed. HANA as a column based database is not the correct database design for non-analytic applications. SAP has said that it is, but this is from the computer science perspective, not true.

Although SAP obscures the fact that HANA cannot be 100% column oriented in design.

As I pointed out in the article Where HANA Gets it’s Speed, for inserts, deletes or updates — which what a transactions processing system does all the time, the column based table is slower than the row based.

Row-oriented databases are what is known as the relational database, but which is a row-based database.

The Great Database Speed Debate

John Soat is a writer that works for Oracle, and like Hasso is not an independent source on this topic. However, John’s article in Forbes makes some good points on the topic of HANA vs Oracle. One that stuck out was SAP’s demurring on releasing HANA performance benchmarks for transaction processing.

“..SAP has not published a single benchmark result for any of its transaction processing applications running on HANA. Why Not?”

And I would say it is quite obvious why not. And that is for transaction processing systems like ERP systems these benchmarks won’t be particularly fast.

Vinnie Mirchandani, who is an independent source of the SAP HANA/Oracle 12C debate, in his book SAP Nation 2.0 reinforces John Soat’s point on benchmarks.

“It has not helped matters that SAP has been opaque about HANA benchmarks. For two decades, its SD benchmark, which measures SAP customer order lines processed in its Sales and Distribution (SD) module, has been the gold standard for measuring new hardware and software infrastructure. It has not released those metrics using a HANA database.”

Misdirection from John Appleby

Is it possible that SAP performed the benchmarking but it was poor, so it simply stopped reporting the result?

John Appleby, the Global Head of HANA at Bluefin Consulting and a well known HANA advocate and someone who has provided an enormous amount of false information about HANA has this to say about the topic — which is also documented in SAP Nation 2.0.

“The answer for the SAP Business Suite is simple right now: you have to scale-up. This advice might change in the future, but even an 8-socket 6TB system will fit 95% of SAP customers, and the biggest Business Suite installations in the world can fit in a SGI 32-socket with 24TB — and that is before considering Simple Finance or Data Aging, both of which decrease memory footprint dramatically.”

I can’t tell if this is in direct response to the lack of transparency on transaction benchmarks, but if it is, it is an inadequate response. In fact, it looks to me that John Appleby is changing the topic in his answer.

The Appleby (Formerly Known as the Hasso) Pivot

The question is related to a performance of a transaction processing system on HANA vs Oracle, and John Appleby quickly moves to a discussion of how much companies should only buy more hardware and not worry about it. What is John Appleby talking about here?

He states that “for the SAP Business Suite.” and then goes on to declare the answer for this suite.

Well, the only part of the SAP Business Suite that is ready for HANA is S/4 Finance. There is lots of debate as to how implementable S/4 Finance is. Secondly, the rest of the suite, now called SAP HANA Enterprise Management, as I stated, is not available for purchase. John Appleby is phrasing his response to what should be the future tense as if it is the present tense.

Is it, in fact, critical to scale up for something that does not yet exist?

Is Oracle Monkeying with the S/4 Certification?

John Soat also points out that while Oracle performed very well on one particular benchmark, but SAP will not certify the result as SAP states that Oracle manipulated the test.

Now I was not at the trial, so I am in no position to say what Oracle did or did not do. Oracle has their story, and SAP has theirs. John Soat has a good explanation of each side’s position in his article.

Also Stephan Kohler, an Oracle performance database consultant had the following to say on this topic.

“SAP already answered why they do not accept the benchmark results (you also find this in the mentioned article – Copy & Paste: “Oracle manipulated its BW-EML benchmark by using a custom setup involving database functions known as triggers and materialized views that can lead to hard-to-spot data inconsistencies and aren’t supported in real-world production environments.”). The reason was the use of triggers and materialized views, which are supposed to be not supported. However if SAP would have checked their own SAPnotes – you can see that it is clearly supported and also used in SAP ECO Space. SAPnote #105047: “Materialized Views – Use permitted.

For more information, see SAP Note 741478.” SAPnote #105047: “Trigger – Use permitted as part of the SAP standard system (for example, BW trigger /BI0/05* in accordance with SAP Note 449891, incremental conversion ICNV). Use of Logon Trigger permitted in accordance with SAP Note 712777. Implicit use as part of Oracle features permitted (for example, online reorganisation, materialized views, GridControl/Enterprise Manager). Use in connection with materialized views in an SAP BW system is permitted as long as no flat cubes are available as an alternative. There is no SAP Integration and SAP does not offer support for this.” Flat cubes are available in Beta since Q1/2016 – so nothing relevant to the Oracle benchmark from 2015.”

And this leads to the next topic, and it is a big one.

SAP’s Conflict of Interest in Not Certifying Oracle 12c

The issue that SAP now completes with all of the hardware vendors places SAP in a conflict of interest when certifying databases; this is a conflict of interest that before its investment into HANA it did not have. What was once a straightforward process is now rife with political intrigue where one now has to parse the statements by SAP and Oracle to see who is telling the truth.

How can SAP certify Oracle, that is give them a fair hearing, if, by certifying Oracle, SAP cut’s into their market share for HANA?

The Mode Switching of Oracle 12c, a New Wrinkle in HANA vs Oracle

Oracle 12c can switch between “modes” displaying either in memory rows or memory columns. That is a serious advantage. IBM BLU has a similar ability. Although there is not that much evidence that there is a major need for a database that does both OLTP and OLAP — and it may not be feasible to design one that does each type of database processing equally well. In fact, the trend in databases is the opposite of this, with specialized database designs such as NoSQL, indexing databases flourishing.

However, getting back to the HANA versus Oracle 12c discussion:

  • Oracle’s flexible design should beat SAP HANA in performance for all but pure analytic applications. 
  • The logic presented by SAP that the entire database should be columnar never made sense because few tables are used in analytics. Therefore does it make sense to use analytics-optimized tables (the columnar design) for every single application table?
  • There is a debate as to how mature Oracle’s in-memory database is. SAP lists 7,000 SAP HANA customers. However, most of these customers are known to either not use the software at all (i.e., it is shelf-ware) or to be test systems, not live systems. As a consequence, SAP HANA skills are still quite hard to find.

Furthermore, Oracle’s in memory modal switch adds to the price of Oracle 12c both in license and in maintenance.

Conclusion

With Oracle 12c, Oracle 12c can switch between row based and column based tables and switch for the same table, which is a new capability.

As far as I can tell, just about all of the SAP marketing documentation on HANA has preceded this development. If I were heading up HANA marketing at SAP, I would not want to address Oracle 12c, because I would not have a good answer for it. This is because Oracle 12c undermines lots of effort expended on the part of SAP to get SAP customers to think that SAP HANA technology is unique to SAP to position SAP HANA as unique and better.

The new capabilities of Oracle 12c undermine some SAP contentions that have been proposed over the years. SAP has not addressed Oracle 12c, and most of the material created on SAP HANA was developed before Oracle 12c was released. IBM and MS SQL Server have similar column store capabilities. Not because there was a big reason to develop them, but because SAP, through its enormous marketing placed the focus on this type of database functionality.

First, SAP now does not have a good reason — or should I say a good idea if it puts its customer’s interests first, to only port new SAP applications (like S/4) to SAP HANA.

Dictating the Database to the Customers?

The previous argument that only SAP could provide a fast enough database is most likely untrue. It was always a poor argument because regardless of the reason. No application vendor should be dictating the data layer to its customers. However, repeatedly that is what SAP has said that it wants to do.

“SAP still believes in running the new system in the cloud and on premise, but it will be only SAP S/4HANA with which we can achieve this in one software version going forward. This will reduce the TCO and speed up the so much needed step into the future. Every single application area like data entry, standard reporting, analytics and predictions, the digital boardroom or the multi-channel customer interaction, to name a few, becomes a world class component  in its own right. This alone is a reason to consider an earlier migration to SAP S/4HANA.” – Hasso Plattner

SAP’s Interest in Sending the IT Industry Back in Time

At the Computer History Museum in Mountain View, there is an exhibit that explains that at one time the software was proprietary to the hardware vendor. At that point software was not an “industry,” and a program released by IBM could only run on IBM hardware. The software was not charged for separately, so there was no competition at the software level.

The software industry we know it today only came into its own after it was decoupled from the hardware. And this was only done by the threat of the US enforcing anti-trust legislation against the proprietary software model and hardware vendors. HANA as a coupling between the applications and database layer — controlled by a single vendor, takes us back in time.

This creates what amounts to a proprietary application/database combination.

  • SAP’s argument that only column based databases have a future is also untrue.
  • Finally, unsurprisingly to those who know the database vendors and their history, the idea that only SAP can develop a high-performance database that meets the speed capabilities of HANA is untrue.

SAP’s argument has not been that they are simply the equal of every other database vendor. With HANA they are superior to every other database vendor. That, of course, includes HANA vs Oracle or anyone else for that matter.

SAP certainly can and will keep selling HANA vs Oracle. But the exclusivity argument that SAP has been proposing is no longer a possible position to believe.

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Financial Bias Disclosure

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

HANA & S/4HANA Research Contact

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

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

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

References

https://www.forbes.com/sites/oracle/2015/12/18/oracle-challenges-sap-on-in-memory-database-claims/

*https://www.amazon.com/SAP-Nation-2-0-empire-disarray-ebook/dp/B013F5BKJQ

https://en.wikipedia.org/wiki/Proprietary_software

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

Why SAP HANA Is Fast Database For Analytics

Executive Summary

  • We explain what the HANA database is at the most basic level.
  • Why improvements in storage hardware and other changes in software speed database queries.
  • How data access and data swapping for analytics work in HANA.
  • Whether SAP’s claims regarding compression make sense and what it has to do with the data type being stored.

Introduction

SAP has made many proposals around HANA’s performance, but the majority of people that discuss HANA do not appear to understand the logic of the performance claims or whether they are true. You will learn the truth around HANA’s capabilities.

Understanding SAP’s Marketing Around HANA

As I explained in this previous article titled Has SAP’s Relentless HANA Push Paid Off?, I brought up the fact that SAP has redirected its marketing efforts to focus to a very significant degree on SAP HANA. However…

  • What is SAP HANA
  • What are the actual SAP HANA technology underpinnings to SAP HANA?
  • That is what makes SAP HANA go so fast?

In this article, you will learn what is SAP HANA. This will be explained in a way that should be accessible to anyone from executives to users to anyone interested in understanding the parts about HANA that is real.

What is SAP HANA Database at the Most Basic Level (What is SAP HANA)

SAP HANA is the name SAP uses to describe its offering that combines software and hardware for enhancing speed, principally based upon leveraging hardware performance improvements and cost reductions in random access memory and solid-state memory, and then changing data management software that interacts with this hardware.

SAP HANA must be simplified for decision-makers to be able to move beyond the marketing hype and simplistic platitudes in their determinations of how and when to use HANA.

The first thing to understand is that SAP HANA is simply the branding of some technologies. These are not technologies on which SAP has a monopoly. The two principal technologies are the following:

  1. Storing a Databases in Memory (in RAM or SSD) Versus on Disk
  2. The Columnar Database

I should also point out that SAP is a relative newcomer to databases — they have had some small database projects like SAPDB/MaxDB, and they made a quite large acquisition of Sybase back in 2010. However, for almost all of SAP’s history their software has resided on the databases of other software vendors. This is a long way of me saying that there is not a lot of databases that SAP knows that other software vendors do not also know. SAP is simply the most important and aggressive marketer of this approach.

SAP HANA Database Overview: Improvements to Storage Hardware and the Corresponding Changes to HANA Database Queries

As is explained quite nicely by Professor Sam Madden at MIT, data queries change when a database is moved from spinning hard disks to either random access memory or solid-state memory.

How Data Access Works

  • When a spinning disk is used, even if a query requires only three fields within a 10-field table, the software must read all ten fields.
  • If the table is 1,000,000 records and 100 megabytes, then the entire table must be read to complete the query.

And in fact, this is not even the worst part. This is because questions often involve multiple tables.

A query which pulls three fields, but which are distributed in 3 tables, must read every single one of those tables to completion.

This is a function of how the data is accessed on a spinning disk.

However, this is not the case when data is stored in random access memory or solid-state memory. Here, a query that uses only three fields is only required to read three fields, regardless of the number of fields in that table.

The Elimination of Swapping

Traditional database systems stored on a disk spend lots of time in an activity known as swapping. Swapping is where data is read into memory from the disk. It is processed, written back to disk, purged, and a new cycle is begun.

In memory, databases remove this swapping because all of the data that is manipulated in loaded into storage. As previously stated, disks within a HANA implementation are not used for primary processing, but for offline data backup.

SAP HANA is often justified by performance. It is important to consider that performance does not correlate directly with business benefit. SAP wants companies to make this error as it puts them in the driver’s seat.

SAP is not interested in the sticky questions related to actual business benefits of SAP HANA, because then the story begins to be much less impressive.

Compression

Why is Compression So Effective in HANA Database?

Column-based databases like a SAP HANA database have a significant advantage when it comes to data compression. This is because once placed into columns; files can be compressed very easily.

This is because there are often so many duplicates in any particular column.

A good example of this is a column that contains the color of a product.

  • If the column has 1000 records…
  • and there are five colors that are possible…
  • then, of course, most of the fields are duplicates…
  • so 200 white, 300 blue, 250 red, etc.…

This means less data redundancy to begin, in addition to the compression — which comes from having fewer unique combinations.

The Importance of the Commonality of the Data Type

This compression is possible because all of the data in a table/column is the same data type. And in many cases, the compression is very significant. It is common to be able to compress columnar databases in the 80% and up range. This process of moving from a standard “row oriented” relational database to a columnar (every table is one column of data) is called horizontal partitioning.

This is because the normal relational table is broken into columns or partitioned.

sap-performance-vs-benefits-hana

The Problems with Finding Uses Cases for SAP HANA Technology

It is also well known it is difficult to come up with use cases for HANA, and that is a problem for closing a HANA sale. So once we get past the presentations about HANA’s capabilities, there are real issues with customer interest and adoption.

This should be acknowledged when discussing the continuation of the HANA marketing strategy.

Who is Measuring the Benefits of SAP HANA Technology

HANA is slated to be the infrastructure of all SAP applications eventually. Let me first address one of the most common implementations of HANA.

This is porting SAP’s BI/BW onto HANA, which is considered one of the most straightforward implementations of HANA that can be performed. However, at companies where I have seen this accomplished, while the reports do run faster, the major bottleneck, which is the backlog of reports that have yet to be created does not change.

Noting this is the difference between simply observing a performance improvement versus understanding the overall benefits of implementing a technology.

SAP Applications on Top of SAP HANA

In other cases where HANA is proposed, such as Simple Finance (where FI/CO is ported to HANA with a new user interface called Fiori), being able to quickly process finance transactions has not been a constraint in ERP systems for many years. In this case, there is an extra complexity. This is because the front end of Finance is different than ECC. It does operate more efficiently than the SAPGUI. That is not HANA – that is it is not the infrastructure change out that is the major differentiating factor.

This is another common problem with HANA, the descriptions of what it improves often morphs into discussions of other new SAP products that are not in fact HANA.

Therefore a discussion that starts off with SAP HANA technology ends up with as a discussion on some other technology.

Danger

SAP HANA Warning!

It is about as easy to get incorrect information on SAP HANA as it is to get it on Big Data.

This issue with the excessive hyperbole on SAP HANA is a serious problem concerning understanding what it can do and how it should be used. It was developed to help cut through the hyperbole on HANA and provide a basis for which to analyze SAP HANA statements.

However, this is of course only one dimension of understanding SAP HANA. None of the consulting companies will touch this issue and have served primarily as sales arms of SAP since — well since they started partnering with SAP. The vast majority of analysts either have a conflict of interest in bringing this up, don’t understand databases well enough to know what part of the SAP HANA story is real and what part is smoke. One perfect example of this inaccuracy that flows through the HANA explanations is the following:

“Relational databases typically use row-based data storage. However Column-based storage is more suitable for many business applications. SAP HANA supports both row-based and column-based storage, and is particularly optimized for column-based storage.” – SAP HANA Tutorial

SAP and their consulting network continue to present all other databases as “traditional.” However, Oracle, DB2 and SQL Server all have column stores. And because each company is better at databases than SAP (a newbie to DBs), the evidence indicates is that both Oracle, DB2 and SQL Server are better that HANA at even the column/analytics processing. However, SAP is not updating the information it first began distributing back when these other vendors were further back than SAP on column oriented processing. SAP wants to freeze all of their competing database vendors back in 2011. Here is another quote that continues the inaccuracy that only SAP has columnal storage.

“Can we just increase the memory of the traditional database (like Oracle) to 1 TB and get similar performance?

NO. You might have performance gains due to more memory available for your current Oracle/Microsoft/Teradata database, but HANA is not just a database with bigger RAM. It is a combination of a lot of hardware and software technologies. The way data is stored and processed by the In-Memory data base is the true differentiator. Having that data available in RAM is just the icing on the cake.” – SAP HANA Tutorial

But in fact, HANA does memory optimize. The curious thing is that SAP does not seem to have the same capabilities to optimize memory, so it has to brute force the solution with very large hardware specs. Benchmarks by a vendor shared with me illustrate that the hardware that HANA has is not addressed properly. So a lot of the hardware ends up being wasted.

HANA as a Major Marketing Tentpole

SAP HANA has been a marketing tentpole of SAP for over 4.5 years. Still, the knowledge of SAP HANA is still fragile. Secondly, few people have implemented a HANA system, and shockingly few have implemented any SAP HANA once one gets past the most common implementation, which is porting the SAP BW to SAP HANA. SAP has seen little return on its SAP HANA investment, but SAP HANA is still rising as a topic of interest — perhaps not among those that work in close collaboration with SAP, but overall. This was verified by web metrics and was a surprise.

There are a lot of interesting storylines to cover on SAP HANA, and we will cover as much as we have the time and the information and understanding to cover.

Conclusion

This article was designed as a SAP HANA technology overview. Columnar databases have speed advantages. However, they are not universal benefits.

Compression is an advantage of column-based databases — and this has been true since column based database was invented. However, column-based databases represent only a small fraction of the overall database market. Why? Well, there is much more to database design than compression. SAP will most often bring up a positive aspect of HANA — or a column based database, but leave out the negatives.

HANA is presented by SAP as a universally advantageous combination of database design combined with faster memory/storage. The less one knows about databases, the more this seems credible. The article Is SAP HANA a Major Advantage for ERP Systems? Explains why SAP HANA’s speed benefits do not hold true for this type of application.

Search Our Other HANA Content

Financial Disclosure

Financial Bias Disclosure

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

HANA & S/4HANA Research Contact

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

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

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

References

https://www.youtube.com/watch?v=mRvkikVuojU

https://www.youtube.com/watch?v=mRvkikVuojU

https://www.datasciencecentral.com/profiles/blogs/row-vs-columnar-vs-nosql-databases

*https://gigaom.com/2010/05/12/analysis-why-sap-bought-sybase-for-5-8-billion/

https://searchdatamanagement.techtarget.com/definition/columnar-database

https://docs.aws.amazon.com/redshift/latest/dg/c_columnar_storage_disk_mem_mgmnt.html

https://docs.aws.amazon.com/redshift/latest/dg/t_Creating_tables.html

https://www.oracle.com/technetwork/database/in-memory/overview/twp-oracle-database-in-memory-2245633.html

https://www.forbes.com/sites/oracle/2015/12/18/oracle-challenges-sap-on-in-memory-database-claims/#4206580e177f

https://saphanatutorial.com/sap-hana-online-courses/

It should be noted that spinning disks are still used in HANA installation, but they are now primarily relegated to backup and archival, so their reduced speed does not interfere with the processing time of queries.

Compression is its area of specialty within database design. Database administrators can choose from different approaches or compression algorithms.

Regarding hardware, overall hardware advances have been benefiting all computer users for some time, and the rightful claimants to these benefits are the hardware manufacturers, not the software vendors. This is a typical progression in computer technology.

I cover how to interpret risk for IT projects in the following book.

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

Risk Estimation and Calculation

Risk Estimation and Calculation

See our free project risk estimators that are available per application. The provide a method of risk analysis that is not available from other sources.

project_software_risk