Faster Database SAP Presses a Speed Advantage

The German software maker linked the latest version of its market-leading business application software to its new high-speed database -- a strategy aimed at shutting out rivals such as Oracle and Microsoft.
SAP CEO Bill McDermott has designed the company's latest business suite software to discourage customers from also using rivals Oracle and Microsoft.

SAP, the world’s largest maker of business management software, made a strategic bet Tuesday to exploit its super-fast HANA database, which will become an integral, mandatory part of its latest software.

The decision by the German company, which is based in Walldorf south of Frankfurt, will prevent SAP S/4 customers from running the software on databases made by rivals such as Oracle and Microsoft.

SAP said the new fast database which it calls HANA, for High-Performance Analytic Appliance, will become an inseparable part of its best-selling business applications software, called S/4 HANA.

The German company sold its first business applications software, called R/2, in 1979, then followed with R/3 in 1992 and a Business Suite in 2007.

SAP’s business customers in the past could combine the German software with Oracle’s databases. But with S/4 HANA, SAP's customers will have to use HANA.

SAP’s business customers in the past had been able to combine the German software and databases from rivals like Oracle and Microsoft.

With the new S/4 HANA, SAP customers will have to use HANA.

On Tuesday at a news conference off the floor of the New York Stock Exchange, the SAP co-founder, Hasso Plattner, said the S/4 HANA launch marked a turning point for SAP.

“This is a sensation,’’ Mr. Plattner told journalists. The German software pioneer has said that SAP’s S/4 software is up to 1,000 times faster than its competitors.

Those microseconds are a definite selling point among SAP’s corporate clients, which want to give their board members responsive software joysticks to monitor and steer large firms.

 

024--CEO-Bill-McDermott WTB excludes 2013 reference

 

Rick Sherlund, an analyst at Nomura, said SAP’s newest software is Internet friendly and modern, designed to increasingly work with remote “cloud’’ computing centers.

“That is an advantage that puts SAP with the market leaders,’’ Mr. Sherlund said.

Mr. Plattner said SAP’s S/4 package would give corporate overseers the ability to monitor and steer companies in real time. The SAP software can present the latest internal financial data, or analyze current market conditions in key sectors, in a split second.

The German company has worked to make the newest version of its main product more customer friendly.

Mr. Plattner said SAP’s S/4 package would give corporate overseers the ability to monitor and steer companies in real time.

The SAP board member for production, Bernd Leukert, demonstrated the S/4’s usability by using voice commands over a smart wristwatch to call up a set of corporate data.

Some experts estimate that the new HANA realtime database gives SAP at least a two-year advantage over Oracle and its smaller rivals.

Using HANA reduces a company’s digital archives by 10 percent, Mr. Plattner said, easing the computing strain to maintain the database. The company has spent around $22 billion in four years building up its cloud services offerings.

 

 

Bill McDermott, the U.S.-born chief executive of SAP, said initial customer reactions to HANA have been very positive.

Currently, about half of SAP’s customers use databases by rivals, such as Oracle or Microsoft. With its latest software update, SAP wants to bring them back into the fold.

The interface between HANA and SAP’s new S/4 program is almost seamless, said one SAP manager, faster than any combination with a rival.

“It’s like putting a rocket engine in a car,’’ the manager said.

 

Thomas Jahn is Handelsblatt's bureau chief in New York. Kevin O'Brien is editor in chief of Handelsblatt Global Edition. To reach the authors: [email protected] and [email protected]