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SAP Hana implementation pattern research yields contradictory results

Research into the user adoption of SAP’s Hana database platform and its S/4 Hana ERP system presents a confusing pattern. Storming ahead or running aground?

SAP’s in-memory, columnar database platform Hana has emerged from some recent UK research as cheaper, faster to deploy and more comprehensive than its detractors have said.

However, the findings seem to contradict a Nucleus Research report, published in June 2016, which revealed that 60% of SAP reference customers – mostly in the US – would not buy SAP technology again.

Centiq, an SAP and other enterprise IT reseller, commissioned the UK research from market research firm Coleman Parks, and the study was carried out among 250 SAP Hana licence holders in April and May 2016.

When asked what claims for Hana were credible, 92% of respondents said it reduced IT infrastructure costs, a further 87% stated it saved business costs. Some 98% of Hana projects came in on-budget, and 65% yet to roll out were confident of hitting budget.

SAP technology is often deemed too complex, and its CEO Bill McDermott has been waging a public war against this complexity for the past few years, using the mantra Run Simple.

The Centiq research seems to demonstrate that Hana can go live fast: 72% went live within six months. However, the speed of implementation varied across industries.

While manufacturing (79%), technology and telecoms (75%), and retail and distribution (62%) were able to implement the database within half a year, 67% of public sector respondents were taking seven to 12 months to implement.

The study seems to confirm Hana’s use cases go beyond analytics. It is used equally for data warehousing and transaction processing: 96% use it for its On Line Transactional Processing (OLTP) capabilities and 92% for On Line Analytical Processing (Olap).

The research showed that 96% of the licence holders are using Hana for online transactional processing while 92% are using it for online analytical processing.

“The first versions of Hana were focused on analytics, and used for big data ‘edge cases’ that required extreme speed. These typically involved large companies adding an additional Hana server to existing infrastructure to do things that weren’t previously feasible,” said an SAP executive quoted in the research.

And the study seems to have revealed that Hana is being used by small and medium-sized enterprises as well as large organisations. Some 83% of the small companies surveyed said Hana lets them design and deploy “innovative applications”.

“We were surprised how satisfied the Hana licence holders were. SAP has done a good job in making sure these projects work, and rate at which has got Hana out is amazing for such a large organisation,” said Centiq director of technology and services Robin Webster. “We had heard a lot about Hana as shelfware, so we were surprised at the number saying they were live.”

The research put SAP’s full enterprise resource planning (ERP) suite, S/4 Hana, together with the earlier SAP technology, Business Suite on Hana. Almost nine in 10 (88%) of respondents were planning to put Business Suite on Hana or were moving to S/4 Hana.

Some 60% of SAP customers would not buy again

This rosy view of Hana adoption – among UK users who may have avoided the teething problems of early adopters in the US and in SAP’s German Heimat – would seem to be diametrically contradicted by research published earlier this summer by Nucleus Research.

This revealed that 60% of SAP reference customers would not buy again from the supplier. And 90% would not consider S/4 Hana at all.

Read more about SAP Hana and S/4 Hana adoption

Nucleus Research senior analyst Rebecca Wettemann spoke to Computer Weekly about the controversial research note earlier this summer. “There is a disconnect between customer expectations and what SAP is trying to do with Hana. We found customers who, given the complexity of early deployments were not at all excited taking on a new S/4 Hana venture”.

The impetus behind the research was, she said, to find out “what the real value was from Hana”, in the context of SAP’s strong marketing of the technology in recent years.

“It is important to point out that the customers we spoke to were the poster children of success for SAP. Many said once you are in, you are in. They are more looking at how they can make their investments more effective,” added Wettemann.

“There is clearly a lot of great technology there. But customers look at the tagline ‘Run Simple’ and they know that nothing is simple with SAP. There is a lot SAP could do to make S/4 Hana more adoptable, less risky.”

Rimini Street and ColorSpot on SAP

Rimini Street, a supplier that offers to take over the maintenance of SAP and Oracle technology for half the price of the original suppliers, welcomed the Nucleus report when it came out.

“Doing an S4/Hana rip and replace of ECC6 [SAP’s earlier generation of ERP] is just not possible yet. And even if the software were there, it is still costly. People have been very burnt by SAP implementations of the past,” said Rimini Street president Sebastian Grady in an interview with Computer Weekly.

He added that he had never seen the degree of scepticism about enterprise software as there is now among CIOs. “If the IT industry keeps allowing greed to get the better of them, they will go the way of financial services, when it was over leveraged,” said Grady.

However, one Rimini Street customer who has moved maintenance of an older version of SAP’s ERP software away from SAP itself is ColorSpot CIO Eric Robinson, who remains a “big fan of SAP”.

ColorSpot Nurseries is a Californian company that supplies bedding plants, vegetables, herbs, shrubs, and other greenery to retail and commercial customers in the US.

Robinson said he is in the 40% of customers who would buy again from SAP, even though he decided to end his maintenance contract with the supplier in the summer of 2010.

Maintenance of his SAP estate had been taking up 20% of his IT budget, “and the online support was fairly poor”.

“ColorSpot is one of those rare entities where SAP is everything, so it was a big decision to move to third-party maintenance,” said Robinson. “If SAP goes down we can’t supply products to the stores. Rimini Street is an extension of my IT team; it supports our custom modifications of SAP, for instance. We have a 14-year-old that works just fine.

“The Nucleus report was quite damaging for SAP, but I’m still a big fan of SAP. The technology is truly our lifeblood. I would definitely buy it again,” he added.

“But if I were to implement another ERP system, say from Oracle or Microsoft, I’d adopt the same strategy of ‘thank you very much for your software, but we’ll take it from here’, and cut maintenance as soon as possible.

“The software is so robust and evolved that it makes no sense to wait for the vendor to supply you with new functionality. It’s not like back in the 1990s where every upgrade was a huge step up. It’s just not like that any more with ERP software, any more than it is with browsers or Microsoft Office,” concluded Robinson.

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