Commentary
1/30/2011
12:59 PM
Bob Evans
Bob Evans
Commentary

Global CIO: The Software Revolution: Can SAP Light The Fuse?

Three emerging technologies have sparked a new generation of incredibly fast enterprise apps with huge disruptive potential—and SAP plans to lead this revolution.



"Back in India, where I grew up, my dad was an officer in the Indian railway system, and he used to take me inside the locomotives to see how they worked: there was the fireman, sweating and pitch-dark from the coal and dust and noise, shoveling coal into the fire as fast as he could, and it was really almost painful to see. And next to him was the engineer, and he's trying to watch hundreds of dials and knobs and levers all at the same time to try to keep the train going 40 kilometers per hour.

"And a few years ago, my dad came to visit me in Germany and we took the ICE train from Cologne and that train had a top speed of 300 kilometers per hour. And I had arranged to be able to take my dad up front to see the driver, and we enter the front compartment and there the driver sat, smoking a cigarette and calmly talking to another driver without even looking at the instrument panel! And my dad said, 'My God—can you believe this!'

"But that mirrors the type of truly astonishing transformations we are beginning to see in the software industry—and within a very short time, we'll see not just one but thousands of advances of that same magnitude that my dad saw on that high-speed train in Germany."

With that deeply personal and profound analogy, SAP's Vishal Sikka, the company's executive board member overseeing technology and innovation, framed his perspective on how the important but relatively stodgy world of enterprise software is on the threshhold of a far-reaching transformation that will produce software solutions that run far faster and with more power than anything we've been able to imagine until now.

Based on SAP's experiences with 50 global customers that have been using its new in-memory-technology analytics appliance called Hana, Sikka said, SAP believes it can and should create totally new versions of its applications that incorporate Hana's underlying in-memory technology to accelerate performance by factors of tens, hundreds, or even thousands.

In a phone conversation late last week, Sikka said this new generation of applications would be not only faster but also simpler to write because of fewer moving parts, and also able to leverage opportunities in social and mobile expectations that are becoming ubiquitous in both the consumer and business worlds.

"With this technology, we have the ability to process data at unbelievable speeds, and so we chose as our first application real-time analytics with Hana," Sikka said.

"But perhaps even more important, we see the opportunity to completely rethink all of our applications on top of this new technology, and that means a lot of the applications that currently do the processing of that data become so much faster—and I mean thousands of times faster in Hana—which gives us the opportunity to completely refactor the apps themselves.

As an example, Sikka cited SAP's own internal use of a dunning application with its CRM system to remind customers that bills are due. The Hana appliance, he said, runs that SAP internal application 1,200 times faster than on standard hardware.

"In addition to the unbelievable speed of the application, you can now add new designs and user experiences that are now possible for taking full advantage of the mobile devices and social connections and networks people now have today," Sikka said.

"And this is very profound, for this reason":

"This combination is what I can the 'new reality' in which we are now able to completely rethink applications to make them dramatically faster and dramatically simpler—since all of that application functionality that used to be done outside of the application in the database is no longer needed, the code that's required is smaller, simpler, and easier to manage," Sikka said.

"And so we will deliver a whole new family of dynamic applications—Strategic Workforce Planning was the first—and in addition, every single product within SAP will be transformed as well. Strategic Workforce Planning is available now, there will be another new set of transformed products rolled out this quarter, then many more later this year, and over time all of our products will be available with these new capabilities."

Sikka then offered a couple of tangible examples from among the 50 customers who've been "co-innovating" with SAP on Hana over the past several months.

Deutsche Bank said it wanted to accelerate the data-crunching time needed to determine the best candidates for cross-selling opportunities, and the bank's top IT executive said Hana has provided superb results: "Deutsche Bank has run a prototype with an early version of the in-memory technology," said Hermann-Josef Lamberti, Group COO and head of group technology and operations, in a statement given to SAP for use in a forthcoming book by company founder and chairman Hasso Plattner.

"In particular," Lamberti said, "we were able to speed up the data-analysis process to detect cross-selling opportunities in our customer database from previously 45 minutes to 5 seconds. In-memory is a powerful new dimension of applied compute power."

Let me just do a little arithmetic on that: from 2,700 seconds to 5 seconds: an improvement of 540x.

Sikka offered another example: "Just this morning, we got the results from one of our customers in healthcare, and they had given us 460 million records of clinical data on which they were running trials. They were able to reduce response time from 47 minutes to 5 seconds running on a 32-core machine on Hana," he said.

"I don't know how else to say it except that the results from customers are unbelievable." Sikka then recounted a Hana case study that he's mentioned in the past, but he added one very significant new detail: the cost of the old hardware versus the new hardware.

"We have a large CPG customer with 460 billion records, and in the past we've mentioned that Hana was able to deliver response-time improvements of 20x and more. What we haven't mentioned is that while the hardware we used to achieve that had a cost of about $530,000, the previous hardware this customer had been using to get the old, slow results before Hana had a list price of over $15,000,000."

And the hardware prices for Hana systems are declining, Sikka said, noting that the $530,000 machine cited above—10 blades, 32 cores each—could be purchased today for $405,000 due to declining prices in some key components.

Plus, he said, a 64-core machine would today have a price of just over $600,000—and, 80-core machines should be available in just a few months.

"Here's why this is so important for our customers: as Edison said, 'vision without execution is hallucination.' Well, we're not hallucinating. The need for speed today is so profound, that if you can take some process that used to take hours or even many minutes and turn that into seconds or subseconds, then the entire behavior and mindset of people changes as well," Sikka said.

"It's like with Google Instant: as you're typing your query in and you're not even finished, it starts to give you results or at least suggestions, and that type of speed and insight leads to changes in behavior," Sikka said.

"When you expose these apps on mobile devices at unbelievable speeds, people can make not just faster but better decisions than ever before. And from that we see that the nature of business is changing, and boardroom discussions are changing as they're rooted more about what's possible and what we can anticipate."

One final point: if you'd like to get a deeper sense of the technology dynamics involved with SAP's in-memory technology and its Hana analytics appliance, please be sure to check out my colleague Doug Henschen's superb piece from December called SAP Delivers Promised Analytic Appliance.

And for much more on SAP and its strategies and competitive challenges, please see our list below of related analyses.

RECOMMENDED READING:

Global CIO: SAP Transformed: From Stuffy ERP To Real-Time iPad Analytics

Global CIO: SAP's Sweeping Turnaround: Exclusive Co-CEO Interview

Global CIO: The CEO Of The Year Is SAP's Bill McDermott

Global CIO: An Open Letter To SAP Chairman Hasso Plattner

Global CIO: Inside SAP: 2,500 iPads Are Only The Beginning

Global CIO: Top 10 Most Influential IT Vendors, Part 2 (Microsoft And HP?)

Global CIO: How SAP Is Leading The Mobile-Enterprise Revolution

Global CIO: SAP Confronts The Real-Time Culture Wars

Global CIO: SAP's Striking Turnaround Triggered By Customer-Centric Strategy

Global CIO: SAP's Last Chance: It's The Customers, Stupid!

Global CIO: Larry Ellison Declares War On IBM And SAP

Global CIO: SAP's McDermott Slaps Back At Oracle And Refocuses On Customers

Global CIO: Inside SAP: 10 Factors Behind Its Dramatic Turnaround

Global CIO: SAP's Top 10 Priorities To Become Undisputed #1

Global CIO: SAP: The Top 10 Reasons We'll Beat Oracle In Applications

Global CIO: SAP's Hasso Plattner On Databases And Larry Ellison

Global CIO: 10 Things SAP's Co-CEOs Should Focus On

Global CIO: An Open Letter To HP CEO Leo Apotheker

Global CIO: SAP Stunner: ERP Deal Boosts Customer Profit $100M Per Year

Global CIO: Are HP And SAP Perfect Match Or Train Wreck?

Global CIO: Larry Ellison's Nightmare: 10 Ways SAP Can Beat Oracle

Global CIO: HP CEO Apotheker Has Deep Expertise But Checkered History

Global CIO: SAP Promises Business Value Over Products: Can It Deliver?

GlobalCIO Bob Evans is senior VP and director of InformationWeek's Global CIO unit.

To find out more about Bob Evans, please visit his page.

For more Global CIO perspectives, check out Global CIO,
or write to Bob at [email protected].

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