I must admit, I was left a little confused by SAP’s Tuesday announcement on business analytics.
Why would SAP hold a big press conference, call in the big guns in Bill McDermott and introduce a bunch of new vertical applications that didn’t really leverage (at least yet) any of the technology principals SAP espoused at Sapphire — on-demand, in-memory and mobile?
To be fair, SAP’s working with HP to put these applications in the cloud, and that likely means that they will in some way leverage HANA — the in-memory appliance that SAP’s working on with HP. Plus, SAP said they would support mobile in the second half of 2011.
So I posed my question to a couple of my sharpest SAP shop pals. I don’t cover business analytics all that often. I know people want business analytics. But is there some huge demand for these that I haven’t caught on to that’d make SAP push them out now?
What I got was an interesting history lesson.
For 10 years or so, SAP has sold industry-specific software as it relates to ERP. You’re familiar with it — Apparel and Footwear, Public Sector, Utilities, etc. This is meant to accommodate potential customers whose business processes weren’t covered by the R/3 functionality, one of my pals said.
Physically, these are add-ons to standard R/3/ECC architecture. Some of them extend standard tables and programs, and some are ‘non-modifying’, completely in their own namespace. But when it comes to BI and BW content, these customers are sometimes left behind, because that content is based on the standard R/3 scenarios. Historically, they were not able to run ETL or report on data that’s in the vertical add-ons without custom development. SAP has put a lot of the vertical content in BW, but the BOBJ stuff is still pretty new.
So these new vertical apps present very appealing SAP BusinessObjects bait for those customers that run those “Industry Solutions”, like AFS or the Utilities. It allows those apps to access content in that industry-specific software without a whole bunch of custom development.
It must be why the SDN-type folks at that press conference kept asking the question over and over again — how much custom development is involved in this? They were schooled in their history lessons.
No doubt business analytics is the hot sell right now. Surveys across our TechTarget sites reveal it is a top IT initiative for customers in 2011.
I’ll return to a theme I’ve repeated a lot on this blog — is it cheaper to keep an existing customer or go out and get a new one? SAP of course wants to sell BOBJ into the existing customer base.
And of course, many customers don’t want to buy something that requires a bunch of custom-development. Perhaps this is a case where the BOBJ content was custom-developed in-house for certain customers to meet specific business requirements, and then readied to be packaged and sold, my pal said.
But how many of the verticals can they actually deliver this type of functionality for? We shall see.