A few days ago SAP announced SAP Business Suite 4 SAP HANA. Shortened to SAP S/4HANA, this is a big strategic launch. Here is why you need to take heed.
The new SAP S/4HANA is supposed to replace the SAP Business Suite (formerly R/3) over the next few years. This announcement and the launch of the software lay a roadmap for SAP in the coming years.
What led to this launch?
SAP is a leader in ERP worldwide. However, in the recent past, a new trend is taking over in the business world. Cloud-based software services also known as Software-as-a-Service. SAP has SaaS components to it, but its main business model has been selling software the old way: software installed at the customers’ premise.
Other cloud companies such as Workday have been slowly chipping away at SAP’s market share. And now this is SAP’s answer.
The R in R/3 stood for real-time. The S in the S/4 stands for Simple. This is the big idea. SAP is planning on simplifying the ERP system with this release.
While SAP R/3 Business Suite ran on any database, S/4 runs exclusively on HANA. SAP has spent considerable financial resources and effort on building up the in-memory database over the past few years. SAP HANA has tremendous performance advantages compared to the older disk-based database solutions. This large-scale change has enabled SAP to dramatically simplify both the data-model as well as the user-experience.
One significant aspect of HANA is that it is an in-memory appliance. This means data-access times (disk read/writes) are not an issue anymore, allowing developers to focus more on business logic than performance. This lends itself to the other motivation for S/4 – simplicity.
SAP S/4HANA is mostly a movement of SAP’s premier software from customer premise to the cloud. However, on-premise solution will still be available. SAP offers 3 options:
- Public Cloud – Completely managed by SAP. Multi-tenancy shared by all public cloud customers
- Private Cloud – Partially managed by SAP. Exclusive database per customer.
- On-Premise – Software installed on client’s hardware. Client pays for user-licenses.
SAP S/4HANA will allow customization to S/4HANA on the HANA Cloud Platform (HCP). This means ABAP developers will get to continue to use their skills. If you don’t know OO, it is a good time to learn it.
Let’s admit it, SAP R/3 has not been known for its stellar user-experience. UI on SAP R/3 has been clunky, rigid and unwelcoming. But the S/4HANA user-interface will be based on SAP’s Fiori UX platform. SAP Fiori, launched earlier in 2014, gives the software a new look-and-feel. The fact it does not have licensing cost should make it attractive to customers with an existing SAP installation.
As far as I can tell, it will be a big improvement.
I really don’t have anything to say about innovation, but you cannot write a whole post on SAP and not mention the word Innovation. So, that’s that.
Co-founder, Hasso Plattner said “If this doesn’t work, we’re dead. Flat-out dead.” This may be just Hasso Plattner being the passionate visionary that he is. But this indeed is a huge launch from SAP, one whose initial roll out is expected to be 3-5 years, and customer transitions lasting more 10 years.
Let’s wait and see if this works or we will be flat-out dead. But as Keynes said “In the long run, we are all dead.”