IT’s Getting Very, Very Cloudy
The IT industry has been dominated by a clutch of big vendors throughout its history. That’s not unusual; it’s the norm. “God is on the side of the big battalions,” as Napoleon once proclaimed. The same is true in many industries – the only difference is that in recent times the cast of leading characters has changed surprisingly frequently. Back in the day, IBM was so dominant that its competitors were dubbed the seven dwarfs (Burroughs, UNIVAC, NCR, CDC, Honeywell, RCA and GE). But the industry grew too large and diverse for such singular dominance to persist.
When Microsoft dethroned IBM in the 1990s, it did so in a joined-at-the-hip partnership with Intel and with help from the once-mighty Compaq. That held for over a decade, but Microsoft never quite got the hang of consumer IT. Steve Jobs did, destroying much of the mobile phone industry in the process – where are you now Nokia, Ericsson, Motorola? So Apple turfed Microsoft out the cat-bird seat in the consumer IT market.
But the corporate IT market was singing a different tune, orchestrated by IBM, HP, Dell, Oracle, Cisco and SAP. That merry orchestra of co-operative competitors was also destined to be disrupted – not by mobile technology but by the cloud. And the company to do the disrupting was Google.
Clouds on the Horizon
OK, I know. When people think of the cloud innovators, they think of Amazon (if they’re thinking IaaS) or they think of Salesforce.com (if they’re thinking SaaS). But when I think out cloud – as my colleague Dez is wont to say – I think economies of scale.
It was Google that first got the memo about cloud and economies of scale, and they sprang into action. Cloud is disruptive in how companies use computing, sure, but it is way more disruptive in how the IT industry provides computing. The point is that big cloud vendors roll their own data centers, roll their own hardware and roll their own software environments – and of course they roll their own applications.
You may not think of Google or Amazon as manufacturers of corporate computing devices. But they are, and – you may not know this – they are among the largest. It’s difficult to get accurate figures, but Google may actually be the largest right now. And by the way, the once-hardware-averse Microsoft is big in this game, too. When Satya Nadella took over, he ditched all the Steve-Jobs-wannabe thinking, stopped chasing Apple and dashed off in the direction of the cloud.
Is SAP Just Lucky?
Of all the vendors I’ve mentioned (and many that never made the cut), SAP seems to be in the best strategic position right now. Its dominant-by-miles corporate ERP++ suite gives it one hell of a business foundation. Applications are sticky. They are stickier than hardware, stickier than operating systems and stickier than databases. They’re not sticky like treacle, they’re sticky like Gorilla Glue. In truth, the servers, the OSes and the databases are really just grudge purchases. We only buy computers because of applications, and in the corporate world, the most compelling applications are those that run the business.
The HANA Cloud Platform (HCP)
SAP is the gorilla with the strongest glue and also the one least threatened by the cloud. This has not stopped it from innovating. To its credit, in recent years it led the industry into memory-oriented processing with its release of SAP HANA. Of course, there were other memory-based technologies around before HANA, but when SAP jumped in that direction, it validated the whole move.
That was 2010, which is quite a while ago, and in-memory processing is only just becoming mainstream. The HANA Cloud Platform is SAP’s way of encouraging you into the cloud. In simple terms, it’s a set of services that comprises an in-memory platform on which you can build applications. It offers support for integration, analytics, mobile, portals and collaboration on the back of SAP HANA DB Services.
As far as SAP is concerned, it’s the SAP bridge to the cloud that competes with PaaS services from Amazon, Salesforce, Microsoft, Google and many others – although to be honest, it doesn’t compete head on with any of these. It is aimed at and sharply focused on SAP’s 250,000 customers. (yes, that’s right, SAP has about 250,000 customers, most of them running SAP applications). And what seems to be happening with many HCP users is that SAP ERP stays on premises, but new applications fly off into the cloud.
For SAP, the really neat thing about HCP is that it provided the foundation for a SAP “App Store,” which SAP promoted enthusiastically to third-party developers. This is unashamedly a copy of Salesforce.com’s app store (Force.com), but it serves a slightly different purpose.
Like all the other IT gorillas, SAP had to carve out its cloud destiny. It was never going to drive the cloud like Google or Amazon, but it couldn’t afford to stay behind the curve, either. Its answer was and is HANA – as an enabler and a bridge to the cloud. By virtue of this, SAP enables its customers to migrate to the cloud at their own chosen speed and has sown the seeds of an SAP ecosystem that may prove even stickier than the ERP system it is based on.