Interview SAP ramps up pressure on customers to move to Hana

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He spoke to Computer Weekly at the user group’s 2014 conference in Birmingham, giving his assessment of how SAP has worked with its British and Irish customers in the past year. What follows is an edited excerpt of that interview.

 

What’s your balance sheet of SAP vis-à-vis the user group over the past year? What’s been good, what not?

 

The biggest thing for us was the announcement about Fiori [a product line of SAP apps] being made free for existing SAP customers – at Sapphire in June. We were very pleased about that for two reasons.

 

This addressed a big concern that a lot of our customers had, and it showed that the user groups could have a big influence, partly through the [16-member] Sugen network.

 

You could see the power of the user groups, not just locally but globally, in effecting that shift.

 

We also think they are still moving in the right direction with respect to licensing. They are making it easier to adopt innovations.

 

Is SAP’s ‘run simple’ mantra given real content, for you, with changes to licensing?

 

SAP has continued to simplify the licensing process – for example, by dropping the "limited professional" category from the price list, which was a source of confusion. The feedback we've had from Joe LaRosa [vice-president, global pricing, SAP] is that it will continue to work with user groups on the further simplification of licensing.

 

Our members do want to consume the new SAP technologies, but there are issues around the complexity and ease of migration. They recognise that the adoption process is a challenge, and that is reflected in the S-innovation series, under the "run simple" banner: Simple Finance, and so on.

 

This ties back to something that Jim Snabe [previously co-CEO of SAP] alluded to at last year’s conference, as he moved on, which was to say to SAP: Get under the skin of organisations to simplify their IT. If you drive efficiencies and decrease costs in IT infrastructure, such as in storage, it releases money to be spent on new technologies and innovations.

 

So, ‘run simple’ does make sense to your members, it’s not just seen as marketing?

 

There is scepticism that it is a way to make us move more quickly to Hana. There has to be a business justification for that. If, say, it reduces the amount of data storage, there is a genuine benefit there. If you're running a large operation you want to make sure the boxes are as efficient as possible, whether it's on premise or in the cloud.

 

Do you think SAP is increasing the pressure on its customers to move to Hana and the cloud?

 

I think it has decided the cloud is not going to be the miracle solution for everyone. I’ve seen less emphasis on the cloud than there was 12 months ago. But when it comes to Hana it's not really a question of if, it's when you move.

 

On Fiori, for instance, you can leverage a certain amount of power from it if you're not on Hana, but to get the full power you need to be on Hana. The same goes for the S innovation suite – Simple Finance and so on.
Are you using Hana in your own business?

 

No we’re not. We have a huge investment in a Microsoft SQL database, and until I have sweated that asset we're not going to move to Hana. I can’t go back to my board and ask for X hundred thousand pounds to spend to move to Hana tomorrow.

 

When Hana was launched it was all about big data and speed. Now there is a shift towards putting Business Suite on Hana, and you can only get the full power of Fiori if you are on it, and so on.

 

SAP account managers need to understand the benefit [of the newer technologies] rather than just sell them. We found that 51% of our members believe their account managers do not understand their business or industry sufficiently. However, that doesn't mean that 49% do, which is all right. You don't take technology for the sake of it, there has to be a business benefit. And if there is, then that creates trust and builds a business partnership between SAP and its customers.

 

From the survey you talked about in your speech it seems your members are still struggling to assimilate SAP’s newer technologies. Would that be right?

 

I think they want to. But even if there were not a licensing cost, there is still disruption. Any move to any new product causes that. You don't want to have a bad user experience with your own colleagues. You want to make these changes so they do not notice it.

 

SAP and other suppliers often seem to want to be selling to line-of-business managers and not the IT department. How do you feel about that?

 

I can see that. Sometimes IT is seen as a blocker and a cost, not a contributor.

 

There is a small risk to the business of selling direct to lines of business because you can lose governance and synergy. Lines of business often don’t care about security because they just want a solution that meets their needs. I would prefer SAP to channel through the office of the CIO.

 

We’re seeing more of a shift to line of business ourselves, in our own organisation, and at our conference. And there has always been a strong HR component here.

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