The SAP platform and digital transformation

I had the opportunity to attend SAP TechEd in Barcelona recently in order to assess the software giant's latest enhancements to their platform. In the process, I also gauged its readiness to fully support that urgent IT priority of our time, digital transformation.
Written by Dion Hinchcliffe, Contributor

As more organizations make serious efforts to digitally mature next year -- a surprising 74% are still early or just beginning to mature according to Deloitte's latest digital future's report -- one key question they're asking is what the right technology stack is to use as the basis. Given the breadth and depth required of most transformation efforts -- from the requisite technologies and operating processes to digital talent and business models -- the industry has learned that establishing an effective foundation for the digital future state is vital.

In fact, I've found that transforming digitally on top of a strong set of digital fundamentals is a leading best practice that has been validated repeatedly as we look as recent examples of digital transformation, most notably at Nordstrom, General Electric, and TravelEx.

So my trip to Barcelona a few weeks ago to SAP's information packed yearly TechEd event afforded me the opportunity to assess the company's latest platform evolution. My goal was to size it up with a lens towards assessing it as a digital transformation-ready platform.

Seeking platforms for digital transformation

In my ongoing exploration of digital transformation the last few years, I've determined there is really only a short-list of enterprise-ready platforms that can be used as the target, with widely known names like IBM, Microsoft, and SAP on the incumbent side and Amazon, VMWare, and Salesforce on the challenger side.

Given the complexity of today's tech landscape and global operating environments, there are really just a few top vendors in the industry that can meet the full range demanding requirements of large organizations, while also providing the future-ready breadth with all or most of the latest target technologies that are on the short list of where organizations must move, and move quickly.

Digital Transformation on Foundational Platform: Change Agents + Enterprise Computing Platform

It's the sheer weight and scale of the tech stack today that separates the leaders from the also-rans. For example, as I noted in my analysis of their cloud platform last year, Amazon now offers over 50 separate categories of enterprise-class cloud services across the technology spectrum. Competitive offerings have to be literally stunningly rich in features to effectively compete in today's sophisticated and nuanced technology landscape.

Thus the mandatory technology and capability inclusions of any genuinely capable platforms upon which to realize digital transformation is a laundry list of what's coming next: Internet of Things, cognitive capabilities from machine learning to artificial intelligence, conversational user experiences, digital business services, advanced smart mobility, digital experience management, big data analytics, and the list goes on.

SAP's core platform matures and evolves

The biggest announcement at TechEd spoke directly to SAP's clear ambition to be a target platform and foundation for digital transformation, saying as much in the first sentence of its press release announcing HANA 2. The HANA cloud platform, shown in its current form below, has become a veritable constellation of digital capabilities and services that is the firm's flagship platform for enterprise computing. As a modern platform, it's a conglomerate that's really a platform-of-platforms in its own right, containing a full set of offerings from services to apps from computing foundations like VORA, HANA 2, BusinessObjects and IoT services on the edge, to a host of functional business platforms like SuccessFactors, Hybris, Concur, and Ariba on top.

But it is HANA that has become the core enterprise computing platform in the SAP vision. While the version 2 moniker indicates HANA has undergone a major overhaul, it's clear that what the HANA platform has incorporated in its newest incarnation is a wide array of key features that either fills noticeable gaps (data architecture management and significantly improved textual and predictive analytics), raises the bar for enterprise-class functionality (optimizations for database management and cloud microservices), or adds domain specific improvements for high impact use cases (geospatial processing and enabling analytics-driven applications.)

Mentioned seemingly in passing, however, are two very significant additions to the platform that will help resolve what is perhaps SAP's largest long-term issue in attracting support as the firmament for digital transformation in large enterprises: The platform's general lack of appeal to a younger, more contemporary generation of developers seeking a more open, less corporate, and more relevant platform that better taps into the current technical zeitgeist of containers, the JavaScript framework of the month, and mobility-first development stacks, as just some examples.

The first of these two additions to SAP HANA 2 is perhaps the most significant: Bring your own language (BWOL.) Programming languages have long been the subject of near-religious debates in the software development field, given the amount of time it requires to learn and become productive with them. Language choice has been an issue with HANA for years.

The reality is that platforms tied to one or a handful languages simply don't appeal to a wide developer base, nor do they allow organizations to apply the unique strengths of a given language to solve certain types of problems much more effectively than others. While it's still a bit unclear how broad BWOL support in HANA 2 actually is, what's more clear is that moving in the direction of open language support is the right direction given that the upcoming generation of developers will seek to use Clojure, Scala, Groovy, and other newer and emerging languages for SAP HANA development.

The second announcement is even more immediately impactful to making HANA accessible to a wider audience: The democratization of HANA via the new HANA Express Edition. Previously, access to a HANA runtime required licensing and special processes. Now anyone can download SAP HANA for free and run it wherever they can run Linux (though it supports a limited data set for development purposes.) As the the development community had learned as long ago as the 1990s with Java, making a technology readily accessible to developers can greatly unleash productive creativity, and so this is the right move by the company.

The SAP Enterprise Cloud Platform in 2017
Image Credit: SAP

The SAP platform and digital transformation

SAP has been making real strides recently in realizing consumer distribution models like SAP's steadily growing apps marketplace and other strategic advances such as their Hybris cloud microservices architecture that have the potential to build an enterprise ecosystem comparable to Apple, Google, or Amazon. SAP is one of the few that can deliver on enterprise sensibilities with solutions that address needs related to global operations and governance. An SAP platform should be more ready out of the box for large organizations to use, rather than adapt to common business needs.

If this is indeed SAP's strategy, it's the correct one in my view, as is the firm's push to make SAP's various digital experiences even more accessible to all users through popular new types of interfaces like natural language. Good examples of this include their Alexa/Siri-like Copilot solution or to their interface to senior executives via the company's push-the-envelope Digital Boardroom offering which, as I encountered as TechEd, even has a Google cardboard-style virtual reality add-on with which to experience it in fully immersive fashion.

By adding robust IoT support and repeatedly showing onstage in Barcelona that its tools can be used in bi-modal/multimodal fashion for so-called "fast IT" solutions developed in "hours instead of weeks", often in a highly integrated fashion, SAP is demonstrating it is supporting existential trends that are reshaping the industry at the moment, while wielding its credibility and experience in the business world like few others.

Where gaps remain

In my analysis, SAP will remain high on the short list of target platforms in 2017 for digital transformation in the large enterprise. Yet, while there's little doubt the company is rapidly incorporating the latest technology trends into its platform, there is still real work to do. The company is well behind IBM on artificial intelligence when it comes to market positioning and capabilities. It has years of catch up to do with Amazon in terms of share of enterprise cloud workloads. And more nimble competitors like Salesforce are building nearly comparable infrastructures and app portfolios, while also growing much faster.

However, overall the progress SAP on display at TechEd was very encouraging as we begin to see the "consumerization of enterprise IT vendors." Consumerization has long been happening in IT via smaller "cool" vendors and Shadow IT penetration via mobile apps and SaaS. Now we're seeing even stalwarts and poster children for classical enterprise IT, including SAP, at last begin to undergo the much-needed knitting together of traditional enterprise IT and next-generation New IT. It's good to see this and it's safe to say that the industry and market are a much more interesting and useful place because of it.

Disclaimer: SAP defrayed some of my travel expenses to TechEd Barcelona 2016 and made introductions for me to senior executives.

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