Is Patience Still a Virtue?

In case you missed it, SAP participated in a webinar today hosted by Mico Yuk that discussed the strategy, direction, roadmap, and hype surrounding dashboarding within SAP BI. This was preceded by an official Statement of Direction (preserved here by the Xcelsius Gurus) and Adam Binnie blog, delivered simultaneously with a live blog from Pieter, and followed relatively quickly by the Diversified Semantic Layer, Dallas Marks, and ASUGNews. SAP has been rightly applauded for their transparency and frankness on the topic, as they really did answer a lot of questions honestly. Unfortunately, they had very few answers that pleased me as a classic BusinessObjects customer (I did find it interesting/telling that less than 50% of the audience fell into that category).

The news coming out of the webinar wasn't particularly earth-shattering. We found out at BI2012 that Xcelsius will add some HTML5 components and that they probably won't be slated for general availability (GA) for at least a year. We knew last year that there was a project underway to create a more robust analytic application creation tool (Zen) which won't be ready for a year. The one bit of new news released yesterday was that those two tools will eventually merge, but that isn't necessarily earth-shattering (and, as Dallas points out in his blog on the topic, that is what good enterprise software companies do). There is an argument that SAP has offered us too little/too late -- since it has been obvious for a LONG while now that the iPad has won, or at least will be winning for the foreseeable future -- but it makes sense that they would be slightly behind some smaller BI competitors. SAP can't reasonably spend all of its time on the bleeding edge of tech; sometimes they have to see what sorts of things catch on in the market and then build or buy appropriate solutions.

The problem I have is that SAP is now putting the lion's share of their analytics innovation into the SAP Business Warehouse (BW) basket. The Analysis Suite (in all of its versions) is currently heavily geared towards BW customers. Zen, which won't be GA for a year, will only support BW and HANA data sources out of the box. This means that if you don't use BW or HANA it'll be freakin' forever (all dates approximate) before you can use the tool. The message is now loud and clear: if you aren't using BW and/or HANA, you are at the back of the queue for innovation in SAP Analytics. BusinessObjects is still very much a world-class enterprise reporting solution and I don't think this webinar should or will lead anyone to scrap what they've already bought. I do think this trend should weigh heavily on BI prospects without an SAP back-end.

How patient is everyone willing to be?

Speeding up

I've recently reviewed a paper called Accelerating the Speed of Intelligence for Fast and Flexible Forecasting, put out by CFO Research Services* and it really got me thinking about how quickly do people really need their data and whether I'd want to speed mine up. Based on the observations of myself and others, I think it's pretty clear that at least some of our data does need to be real-time (and having the rest of it real-time would, at the very least, not be a bad thing). The questions left on the table then -- assuming you don't already have a rock-solid use case -- are what does super-fast data look like, and how do we reasonably get there?

What does the real-time enterprise look like?

It looks like HANA, obviously. :)

While that answer is half-tongue in cheek, half-serious, and half-covered in Kool-Aid (being in-memory allows 3 halves to be processed simultaneously -- that's just good science) HANA (or at least something like it) really does need to be the answer going forward if a truly real-time enterprise is ever going to happen on a massive scale.

• Existing relational database providers can't support real-time reporting because even in very small deployments people don't want to run reports (especially non-operational analytical reports). They don't want anything to impact the performance of their transactional systems. 
• Existing data warehouse appliances can get you (at least very close to) real-time, but without a specific use case they are out of reach for small to medium enterprises who can't afford the licensing, hardware, and expertise required of having multiple database technologies. These systems can't support OLTP so they are and will remain a luxury of sorts for most customers.
• Some applications (think Workday) are doing great things with in-memory technology, allowing reporting and transactions to occur on the same system. Unfortunately, those great things are largely limited in what data you can pull, how you can pull it, and what you can do with it once it is pulled. It's just too proprietary and silo-ed to branch out beyond its own application.

That leaves us looking for something like HANA, and once it becomes an actual database option for building applications (and some think it is already there), there won't be a reason to not choose it over an existing competitor. It runs on (admittedly beefy) commodity hardware, it will be application agnostic, and it is very reasonably priced (Seriously, pay attention to this announcement and then ask your account rep. You'll be shocked.). If someone were starting truly carte blanche, why wouldn't they pick a database like HANA?

How do we get there?

Assuming you can't start carte blanche, the path to HANA isn't necessarily easy. You've got legacy systems you still need to pay maintenance on, a couple of DBAs who will fight tooth and nail to keep whatever you've got, and a host of applications that you aren't quite ready to rewrite to take advantage of HANA, regardless of your tolerance for pain. So how do we get started?

Small. If you feel like going the very reasonable route, I'd recommend inquiring with some of the hardware partners about "borrowing" a box for a POC (if that hardware partner is also a services provider, even better). Because of the way the software is licensed, you can buy a tiny little chunk to get started. The size of that tiny little chunk is relative to your organization, but you can always add more. Next, buy an appliance that can hold at least twice the storage capability you've licensed software for (and maybe more). Why buy more hardware than software? Because the transaction cost of the hardware is higher, silly, and because the price doesn't grow linearly like it does with the software. As a bonus? With compression, you'll still be able to put more in there than you ever thought.

Once you've made your purchase you'll want to start chucking some "fun" data in there to practice on. This would be a very good time to get some of your other "nice-to-have" initiatives rolling. Exception based reporting? HANA can support that. Predictive Analytics? SAP will sell you that. Mobile? These technologies were meant for each other. Build your next small in-house app with HANA as the database. Once you start using it, you'll see the potential beyond a data warehouse appliance.

Where are we? 

Assuming you don't have a full-fledged, custom built HANA use case and you are willing to follow the plan I've just outlined for you, you are still way ahead of the game. Some swaths of your reporting will hum, you'll be able to do things in your applications that you've never done, and you will have spent a bunch of money (that you would have spent on extra CPUs of a relational database anyway) on something far newer, sexier, and ultimately better than the old tech.

Are any of these "fun" use cases "game-changing"? Probably not on their own. But the next time your current DB vendor shows up with their hand out, you may just be comfortable enough with the technology to tell them you don't need to expand their footprint in your organization. And you'll be ahead of your competition in taking advantage of the next paradigm shift in enterprise computing.

* Thanks to the SAP Office of the Finance team for providing this report to me as a member of their CFO Intellectual Exchange Network program. To learn more about improving financial performance, efficiency and overall financial transformation visit their CFO and Finance Leadership Center. 
**I feel compelled to say "like HANA" because someone will eventually compete with SAP on an in-memory database that can support operations and analytics once they understand the vision***. 
*** Sorry Oracle, but your Exa-... series is just an appliance at this point, and, as far as I can tell, has no interest in being anything else.

Fear, uncertainty, and cloud

I recently read an article entitled CIOs fear business leaders see cloud as way to circumvent IT (h/t to Jon Reed who h/t'd Vijay Vijayasankar) and I was floored.

What Sooraj wrote was:

The study says CIOs are concerned that cloud provides business teams with a way around IT teams by acquiring cloud services on their own, which undermines the strategic partnership they are trying to build with business leaders.

But what I read was:

With lines of business increased control over IT spending and IT's complete inability to meet the needs of the modern business in a timely and pleasant fashion, here's just one more reason why I fear not only for the office of the CIO generally but for my job specifically.

I find that more than a little disheartening -- I've long said that working like you fear for your job is the best way to do a terrible job. That said, everyone's got kids to feed, so how does IT survive this "whole cloud thing" and leave the business better off to boot?

1. Manage these cloud connections internally. Dominic Wellington recommended this at the end of the article, and rightly so. Lines of business don't want to manage their cloud services or anything else technology-related, but often they must in order to get things done. Managing cloud services needs to have some policy and procedures around it certainly, but taking 3 months to get around to filling out a web form that takes 5 minutes isn't going to cut it.
2. Make everything simpler. Whether it's Steve Jobs talking about saying "no" to lots of things, or Vishal Sikka talking about removing layers, it isn't hard to find smart people willing to talk about taking complexity out of your business as a good thing (when done thoughtfully, anyway). Doing extra things can be dumb. Tactically employing "the cloud" can help you do less dumb things. 
3. Take this opportunity to restructure IT intelligently. An investment in the cloud doesn't have to just transform the way your company does business, it can also transform the way you deliver services to your business. As a company moves to the cloud, it probably needs less pure-developers for day-to-day operations and should invest in skills such as security and configuration. This will also allow your best developers to move onto more interesting and fulfilling opportunities, like mobile development, and your less good ones to do something... less developer-y.

The cloud has put CIOs on notice, as well it should have, but being put on notice and being doomed aren't necessarily the same thing. Like with most things, proactivity is the key. Embracing the cloud now may prevent it from putting you in a choke-hold later.

Is SAP Still Missing the Mark on Mobile?

We are at a point in enterprise mobility where everyone has assumed it is a given but no one has exactly figured it out. Is SAP shooting itself in the foot by trying to have a big fixed cost (SUP) and high variable costs (uber-expensive apps), meaning that they'll have to talk people into surmounting expensive barriers to entry on two separate fronts. 


Consumerism and Platforms
Most people think that the "consumer experience" is about things working seamlessly and being super intuitive. That's half the story (and a big half, to be sure), but the other half (and the easier half, to be sure) is choice. We've all, I'm sure, read the Google Platforms rant. The reason Platforms are great is because if you can own the data and the infrastructure (which are the most valuable bits -- sort of like the bacon of IT) and you let others extend it and propogate it, you win without doing a whole lot of the work. You want to own the platform.

Let's use mobile Twitter as an example. Sure, you want to sell directly (the mobile Twitter website) and you'd like to have a brick and mortar store of your own (the official Twitter iOS app) and you might even buy a distributor (Tweetdeck), but in the end you really mostly just want people to be writing and reading tweets. That's why you build out an API and let all sorts of other people sell your product for you. And other people selling your product is a good thing. 

That gives people choice, and people like choice (I hate Tweetdeck, but I love Hootsuite, which enables me to continue to use Twitter's core product without using it's distribution). It also generates competition, which makes your product even more valuable in the long run. Enterprise software vendors need to remember that what they really want to own is the tweets data within their systems of record.


Developers Wanted
SAP is getting closer to having a fleshed-out mobile developer ecosystem, but at present it isn't open enough to generate a lot of innovation or competition -- the table stakes are just too high. SAP needs to make sure the price is low enough to engage enough developers to give users choice. Need a mobile solution to approve work orders? It sure would be nice to have a couple of different apps that are inexpensive enough to try out. 


In order to get those apps you need a robust developer ecosystem. In order to get that robust developer ecosystem, you need to leave enough money on the table for those developers, and you need to make it really easy for them to develop software (check out the 4:05 mark of JD-OD's video).


The Back of the Napkin

Per SAP CIO Oliver Bussmann, SAP manages some 12,500 iPads and those iPads have downloaded around 120,000 apps from their Afaria appstore (that's around 10 apps/user). For SAP. Customers, each of those apps will cost somewhere between 25 and 100 euros, so we'll say that these each average $50/app (yes, I did just switch currencies - it's cool, though, since SAP can handle that). That means that for each user, which might download 10 enteprise apps, we've effectively doubled the price of a $500 iPad (presumably people important enough to warrant more memory or 3G connections would warrant more/better apps as well) and that is before the price of SUP, Netweaver Gateway, and Afaria are taken into account. 


To justify that sort of expense for the average mobile-enabled user, you have to basically disable their desktop experience to save on that cost. I for one don't know many people that are willing or able to totally leave their desktop or laptop behind yet. The easy solution? Charge less for apps. The problem is, that's the only place third-party developers can currently make money (and they have to make enough to cover their own infrastructure first).

So Where Are We?
The solution -- and one, I might add, that'll be hard to swallow -- is that SAP needs to give up on making money at every possible point in the "enterprise data to mobile device" supply chain.

1. Give developers access to SUP, Netweaver Gateway, and Afaria for free to learn the technology. This will allow certain shops to participate in the market that never would have otherwise. You'll end up with some crap applications, but you'll also unearth some gems. The free market works in an app store.
2. Charge customers for the mobile infrastructure one-time. Let them connect to it via whatever means they want. This should not be a tremendously high price. How much extra do Workday or Salesforce customers pay for their mobile access?
3. Do what you can to keep App prices down. This will largely be up to the developer, but work with them to encourage "creative" pricing. 

SAP-broadly should be trying to learn from what BusinessObjects is doing in the mobile space. It has had some struggles, but it is poised to move enterprise business intelligence to the mobile device because it has figured out the cost (an enterprise mobile service which isn't cheap but also doesn't seem to be a tremendously huge obstacle) combined with a couple of solid if not perfect free applications. They also have a developer ecosystem that is willing to play because they have low barriers to entry. This means you only have to pay once for the platform and then can distribute it however you see fit. This is the sort of model consumers have come to expect and that enterprises should flock to. 


I understand SAP wants to make money everywhere in the process, but they have to remember that their back-end systems still being relevant in 10 years will be largely dependent on enterprises being able to access and manipulate that data from anywhere. Making it really expensive and unattractive to do that right now isn't going to help on that front.