SAP HANA can help you dramatically accelerate analytics, business processes, predictive analysis, and sentiment data processing – all on a single in-memory computing platform. In-memory computing is attaining a lot of hype as a new solution for organizations looking to become more agile, and SAP has been banking on their product HANA to become the new foundation of this movement. But the practical CIO will have reason to question the speed and the economics of SAP’s suite of tools in comparison to other platforms, as well as the entire in-memory database on which it is built. We ask SAP’s CTO if HANA can really hold up to such scrutiny.
Contributors

• • Jeffrey Word, VP of Product Strategy for Databases and Technology, SAP
  • Dr. Chris Nokkentved, CTO, HP Enterprise Application Services

Transcript

Sanjog Aul [00:00:00]:
Welcome listeners, this is Sanjog Aul, your host, and the topic for today’s conversation is, Can SAP HANA Hold Up To Scrutiny? And I have with me Dr. Jeffrey Word, who’s the Vice President of Product Strategy with SAP. Hello, Jeff, how are you?

Jeffrey Word [00:00:14]:
Oh, I’m doing great. Happy to be here.

Sanjog Aul [00:00:16]:
Great honor to have you, and we have Dr. Chris Nokkentved, who’s the Chief Technology Officer of Enterprise Application Services with HP. Hello, Chris, how are you?

Dr. Chris Nokkentved [00:00:25]:
Very good. Very good. Thanks for having us.

Sanjog Aul [00:00:27]:
Great.

Sanjog Aul [00:00:28]:
So In-Memory computing is finally breaking into the mainstream with all of the major players taking a stake in its evolution. There are many solutions being offered today, but where can IT practitioners start? We’ve invited Chris and Jeff to explain how IT leaders can identify the real value of an In-Memory solution like SAP HANA as implemented by HP for their organization.

Sanjog Aul [00:00:51]:
Jeff, starting with you, What makes SAP HANA a viable solution, and what are some of HANA’s core differentiators?

Jeffrey Word [00:00:58]:
That’s a great question. What we see today in the In-Memory is really what SAP’s been pioneering since the mid-2000s, is deriving out of the best practices of what we’ve learned from operating the world’s most mission-critical complex applications over the last 40 years to design a new architectural layer for the database industry and coming from SAP’s perspective of an applications company, we really decided to build the next generation data layer software applications to not only power innovation, but to overcome a lot of the efficiencies of the previous architecture of disk-based databases and because of that, now you see all of the other database vendors following SAP’s lead into this new architecture for In-Memory databases and the really critical thing about SAP is it was built from the ground up, from the first line of code, to be a disruptive new innovation in the database world. This isn’t something that was warmed over or bolted on as an accelerator. This really is a natively developed In-Memory database that does both transactional overlaps, and oral TP and analytical both equally well and is designed to do both at massively scaled volume and so that really is the biggest differentiator from what people see at SAP HANA and the other In-Memory architectures out there are the HANA really was designed from the very first line of code to be a mission-critical, infinitely scalable, bet your company on it database to run not only your existing enterprise applications, but all kinds of innovative new applications that you can build now in this world of no constraints.

Sanjog Aul [00:02:27]:
So how can interested parties identify use cases where In-Memory will be valuable to them?

Jeffrey Word [00:02:35]:
Well that actually is the hardest thing about In-Memory technology; it is a little bit different under the hood than what people are familiar with in current databases. Really where we see most of our customers are struggling is, they know that this is going to be the next big architecture and they know that this is a journey they need to start to transition towards, but they often times have a difficult time figuring out where that initial value use case is going to be. And so what we see is customers are trying HANA in a lot of different ways. The most exciting for me at least are the opportunities to do things that have never been done before, like the really innovative ideas that companies have that are impossible to do in the architecture of a regular disc-based database. So that really is a really cool thing, where you take an idea from the white board to execution with this new technology to really drive a massive amount of business value and do things that have never been before,

Jeffrey Word [00:03:25]:
but we also see people doing things where they’re speeding up existing transactional issues that they’ve got, where it might take four, five hours for a backs run and now they can do it in a couple of seconds, to traditional data warehousing types of use cases where things that take them a week from doing the transaction to actually seeing the reports, now they can do in a matter of seconds. Those types of more traditional use cases that are bound by the constraints of the disc-based architecture, and really HANA can come in and eliminate all of that latency in there. But like I said, the really amazing stuff is where people are starting to see this ability to take in innovative new idea and bring it out in just a week or two to a massive scale of users and do things that have never been done before.

Sanjog Aul [00:04:03]:
So Chris, based on Jeff’s response, it looks like it can literally fix anything and everything. Is this truly a panacea?

Dr. Chris Nokkentved [00:04:10]:
Well it’s not. I think In-Memory Computing has certainly a very important role to play in the evolution of enterprise application computing as we’re moving forward as it is not just applications that are affected but also the platform. But there are many other applications within a very large company, like manufacturing execution systems for example, all legacy applications or even specialized analytics that contain an enormous amount of business rules and complex interactions that cannot just directly be transferred over to the new platform. I’m looking at it very often from a heavily customized business processes area. Some processes are extremely stable; if is something really stable and it’s working, why necessarily move it if there is no business value and impact on it? So you have to look at the whole platform of HANA, not just the application, but also the cloud computing that comes underneath it through the HP offerings as a perspective of the impact to the business. So if there’s no direct impact to business, why then move it to HANA? I have seen other use cases where we can see a resurgence of interesting response to supply networks.

Dr. Chris Nokkentved [00:05:20]:
For example, We can do things we couldn’t do before like sales and operations planning, demand signal management, much more advanced and fine grain responsive management. As well as in the customer and channel excellence area, we can do trade promotion effectiveness and sales pipeline analysis and predictive segmentation, stuff that were not even possible in the previous platforms being added by SAP on top of this platform, enabling it via the In-Memory construct.

Jeffrey Word [00:05:46]:
Yeah, it’s a good point to add on that. I completely agree. SAP is not saying or promoting that HANA is the solution for everything, or that every application should run on HANA. It’s more of an issue of technically technically they all could. It speaks pure SQL and has all of the different platform capabilities you’d expect from a regular database for an application. So technically they could all run on that but we as well promote the idea to our customers that the business value from this new technology as an enabler is really where you have to focus for these use cases, and some of them are about speed and execution, but it’s way more than that.

Jeffrey Word [00:06:18]:
It’s about really figuring out what that business value is, how it’s going to transform your business, and if it’s not a really compelling case today, that’s fine. There’s a lot of other opportunities where you can get this into your architecture that are much more compelling, much bigger business value. So it’s really an issue of not just can you do it, but what should you do? And that’s really where we see people focusing their efforts right now is really identifying those initial use cases where it’s going to have maximum impact.

Sanjog Aul [00:06:43]:
So, Chris, would you say that there is a one-size-fits-all solution available so you can put that one in and take it and broad stroke it across multiple industries and situations and life is good?

Dr. Chris Nokkentved [00:06:53]:
No, there is no such thing, and I would even suggest that this is nearly impossible. I would imagine that SAP, as we can see from portfolio development, are exceedingly focusing on industry solutions and verticalized solutions. So you will see even more applications aligned to subsegments of an industry. For example, the dairy industry versus the food industry within food, they have very different requirements, and you will see more and more applications that were not possible before being developed for these particular subsegments of the particular industry. No, it doesn’t fit all, and it certainly will be very diverse in its application as we’re moving forward, and people will also use the platform for new things we couldn’t do before.

Dr. Chris Nokkentved [00:07:35]:
As I mentioned, for example, predictive segmentation or the ability to unite all data in a sales and operations planning exercise. This was literally not possible before through a standard application. Now it’s possible because of the speed of the ability of the platform to assemble an enormous amount of data and continues to keep it updated real time. So no one flies at all.

Sanjog Aul [00:07:57]:
Jeff, when you look at the different organizations who may be attempting to go this route, or at least contemplating going the In-Memory computing route, what type of assessments in terms of their readiness they should perform to make sure that they can really take this on and make the most value— take the most value for themselves?

Jeffrey Word [00:08:15]:
Yeah, again, it all starts with the business case, and the business case really defines the scope of what technology or what disruption is going to be imposed upon the architecture that they have today, and so in many cases, there is no preparation. We literally can come in and do a design thinking workshop with the customer on Monday and they can be live on the system on Friday so that it can be a standalone, it can be running in the cloud, etc. So those from a smaller use case perspective can be completely non-disruptive and there really isn’t much preparation. On the other side, this can involve a full-blown migration of your entire enterprise architecture, and we have a lot of companies that are going through that process right now. Thousands of people are going through trainings and getting skilled up to be much more valuable in this new world because they’re going to be performing slightly different tasks than they did before. DBAs are not going to be just regular guys doing backups and defrags and things like that.

Jeffrey Word [00:09:05]:
They’re going to become much more of data architects and really looking at things holistically. So it really can go from very small to very big but the most important thing is companies need to start thinking about their IT architecture as an enabler for business capabilities and driver of business value, and that really is across the board, small and big, and something that everyone needs to look at. We often advise people that the best way to look at it is to think small, think big, but start small.

Sanjog Aul [00:09:31]:
Let’s take a quick break, listeners. When we come back, Chris, let’s discuss what due diligence you would advocate an organization should take and inventory what pitfalls they may get into. Please stay tuned listeners, we’ll be right back.

Sanjog Aul [00:10:35]:
Welcome back. Chris, what due diligence do you advocate that an organization must perform upfront to avoid common pitfalls and issues? And before you answer this question, how about giving us an inventory of some of the common pitfalls and issues that you may be facing or your organizations you’re supporting may be facing?

Dr. Chris Nokkentved [00:10:51]:
Yeah, a very common pitfall is the companies underestimate the amount of customization that exists within their current applications. So it is not just migrating data from one database to another. There is a lot of integrated functionality between applications that also needs to be moved over, and this is, from what I have seen so far, one of the most underestimated efforts as we’re moving applications over to the HANA platform. So this also brings me actually to the whole part around due diligence, where we actually suggest to customers to conduct significant housecleaning of their major applications. It’s very important to re-document the current solutions from a technical landscape perspective, from a custom code perspective, and also from a business process perspective. Because one of the major advantages of the new platform is that SAP is providing new functionalities and enables new business processes that can come in and add to your current palette and inventory. So from that perspective, the re-documentation of the enterprise architecture is an important exercise, especially as you start involving the solution and system integrators into the effort.

Dr. Chris Nokkentved [00:12:00]:
If you look at it from that angle , there’s also a lot of misunderstanding where HANA really plays in and where and how people should build a business case around HANA. For example, should the business case be

Dr. Chris Nokkentved [00:12:11]:
on agility, on speed? Jeff mentioned a couple of examples. For example, we know from production planning and MRP that going from a 6-hour MRP to a 6-minute MRP means that the management speed is this particular manufacturing company can actually create many more different types of components within the same planning period, given the set of manufacturing machinery. But literally the business case behind the movement, it’s also one of the very underestimated components of its transformation and a very significant pivotal part of agility.

Sanjog Aul [00:12:45]:
Jeff, what would be some of those success stories and/or case studies that you would like to point towards so that the organizational decision makers can listen to it and say, this is something that we should— we must invest, that is in In-Memory computing.

Jeffrey Word [00:12:59]:
Yeah, some of the ones that pop to mind, and we have thousands of these at this point live running on HANA, some of them fall into the category of doing the same thing faster, better, and cheaper than they have before. Like Chris mentioned, doing MRP instead of a 6-hour run, it does 6 minutes. We actually have hundreds of people that have done 10,000 times faster reports and transactions. Now, those aren’t terribly transformational from a business on face value, but when you actually look under the hood, it transforms fundamentally the way that the user interacts with the system. Instead of hitting Enter at 5:00 that night as I leave the office and then getting the answer somewhere around noon the next day, and then they can get their job done— if they can get an answer within a second or two, it turns the system into a conversation piece, and it also allows them to do simulations and what-ifs, and if I change that variable, if I move this out, if I push that around, it allows them to really start to understand the impact when they’re not waiting around for that system. So even though it might on the surface, those use cases might seem like it’s just faster, it really does transform the way that you get value out of those applications.

Jeffrey Word [00:14:04]:
And on the other side, you have a lot of them that are involved in doing things that literally cannot be done today. We have lots of customers that are doing stuff that it just physically can’t be done. There’s not a system big enough on the planet. HP doesn’t make a server big enough that you could run these things because of the way that it was architected in the old world with a disk-based database and just struggling to get data off of that disk, and so now that we do have everything entirely in RAM all the time and we have all of these engines inside HANA that can execute these incredibly complex algorithms on the data inside the database. We can now do a bunch of magical things that literally with data could never be done before and do them on the fly and in real time, and that really changes the way that companies start to look at the business processes that they execute and the types of value that they bring to their customers. My favorite one in the world is actually MKI Industries or Mitsubishi Knowledge Industries in Tokyo.

Jeffrey Word [00:14:57]:
And what they do is they take personal genome maps of people for cancer treatments and come up with a personalized cancer treatment for you. Based on your own personal genome and the specific type of cancer you’ve got, and then the histories of what other people with that type of cancer have been treated by, and it used to take them several weeks and hundreds of thousands of dollars to generate this personalized plan, and now by putting HANA in there and adapting that application to use HANA’s capabilities under the hood, they can actually do it in less than 20 minutes while you’re sitting in the doctor’s office and do it for less than $1,000. That is a totally transformational thing that they can now provide a service that they could never do in the past, and this really actually affects people’s quality of life pretty significantly when you have that ability, and so those types of things are the ones, like I said, they personally excite me the most, but it might not be a business value that, that there’s associated. It might be much more than that quality of life value.

Jeffrey Word [00:15:46]:
So people really need to look at that and try and understand where those use cases are that this technology can add value upfront and in incremental ways. Then also at the same time, look for those really transformational opportunities that you can do things that have never been able to be done before because it was too impossible with the technology or too costly to try and attempt.

Sanjog Aul [00:16:04]:
Chris, what are some of the case studies of success you feel most proud of?

Dr. Chris Nokkentved [00:16:08]:
Yeah, I’m extremely proud of some of the work that we’re doing on BW on HANA because BW on HANA is the most widespread usage of the platform right now, and I can see that companies have started moving away from pure analytics and started thinking about using, achieving a business goal with the analytics. We have an example of a Chinese food company that improved their day sales outstanding 5 to 7 times, and that had actually a significant impact on their stock price because they were actually able to record on these improvements. They also allowed them to have real visibility of the data and also make decisions in a more timely and rational manner. I have another example from the US for a company that was able to use the COPA functionality, the profitability analysis for trade promotions running on 9 minutes instead of 28 hours, and that meant that they could make many more fine-grained decisions where they should allocate their stars trade funds for maximum impact with the product of their they.

Dr. Chris Nokkentved [00:17:08]:
Were launching into the market. So now they were, instead of waiting throughout the weekend, they would actually launch it on Monday and still throughout the week make small adjustments as the shipments were actually arriving at the retailers’ areas. Finally, another one is a very large beverage company where we improved the data load times of external data into the actual database 7 to 10 times. So they were able to load point-of-sale data and make active decisions on the data within the day. All these things, they sound a little bit mundane, but in the end, they have a significant impact on the company’s relationship with its supply network, with its downstream customers and retailers, as well as the ability to understand how they can move and optimize the overall supply network around them.

Sanjog Aul [00:17:51]:
Jeff, for any cutting-edge organization, the creation of new applications for innovative processes and/or business models is very crucial. So how do you see SAP HANA helping improve and accelerate any of these creations for these applications?

Jeffrey Word [00:18:07]:
That’s a great one, and that’s actually where we have some of the most incredible use cases as well, are for these new things that literally can never be done. We have over 3,000 startups that have joined with SAP HANA and based their algorithm, their idea on HANA to do something that has never been done before because now they have the capabilities of this new platform, and that really is the thing, is once companies understand the capabilities of this new platform, and really the paradigm shift in programming approach from the old world of doing things in a disk-based database, all of a sudden there’s a flood of new ideas, and one of the greatest things that I’ve seen, and I know Chris sees this a lot as well, is see customers or companies out there that have an idea. Some business leader has an idea that he thinks or she thinks is going to be very transformational to the company, and they draw what they want it to look like on a whiteboard, and the IT guys sit there and can translate that using the tools and the power of SAP HANA into a solution for them in just a couple of days, and when they start to see that and you watch their first reactions to that kind of evolution in just a few days from an idea on a whiteboard to actual business value at their fingertips, that is a truly amazing and transformational thing.

Jeffrey Word [00:19:19]:
And so as companies start to experiment with that, HANA is much more about just, like I said, doing the things that you do today faster, better, and cheaper. It does that obviously extremely well, but it’s about this power of being able to extend those mundane things, as Chris said, into incredibly new, cool, sexy things because they were impossible to do in the old world.

Sanjog Aul [00:19:40]:
So, Chris, anything that you would like to add to the type of applications that could be worked upon leveraging SAP HANA?

Dr. Chris Nokkentved [00:19:47]:
Yes, we are actually surrounded by Generation Y people, youngsters that are used to leveraged systems of engagement, mobility devices, smartphones. Their interaction with transactional systems are changing. They want to be much more flexible and also whilst in the midst of a particular interaction with a transactional system, start asking questions. How can I reduce terms of product return rates? What was the biggest bottom line impact of that particular great promotion? And what with the deals I happened was sending with this particular customer?

Dr. Chris Nokkentved [00:20:19]:
And who’s the best customer profile for, for loyalty rewards? So people started to combine a multitude of few questions and questions around a particular decision process of, for example, allocating an order and a discount for a particular customer. Now, HANA, as Jeff mentioned, there are a number of drivers that enables us to build, for example, to the Sybase event stream processor and the mobility front end, much more demand event-driven applications were not possible before. There’s a lot of opportunity to build lightweight applications with Fiori, for example, that can live in all kinds of interfaces on iPad, iPhones, Android, and of course normal Microsoft set up, and the most important thing is the event-driven nature of the new applications. Typically before, we had a transactional sequence of things. You had to complete the purchase requisition, then you had to go to purchase orders, group them. There was like a sequence thing. Now we see many of these things being able to be done based on events.

Dr. Chris Nokkentved [00:21:19]:
So when the purchase orders, for example, purchase requisitions reach a certain level, then you can actually group them immediately. If we can do that in a way that it was not possible before, that was too heavy logistically and programmatically to do this kind of logic within their systems. Now possible. So I think that the key focus here is the ability to build lightweight event-driven applications that were not possible before.

Sanjog Aul [00:21:43]:
So Chris, what investments HP is making towards helping organizations in getting the most value out of the SAP HANA platform?

Dr. Chris Nokkentved [00:21:51]:
That’s a really good question. Given that HP and SAP have had a very long partnership and relationship, and we have been working collaboratively around the SAP HANA platform We had done considerable investments in trying to integrate technologies on the hardware level to enable the platform to function at its optimum, and we’re continuing to make these investments to not only improve the platform, but also improve the opportunity to virtualize the platform and expand the capabilities. We are very soon going to announce the HANA Hawk box. It will enable you to create a scale-up infrastructure up to 24 terabytes, and it can then be scaled up to.

Dr. Chris Nokkentved [00:22:29]:
Deal in endless setup that enables us to build really large-scale real-time data repositories. On the software group side, HP has invested considerable money in enhancing the cloud service automation software that will enable HANA to live in a private or virtual private cloud and enable applications to work at their optimum as well as deployed faster within a multitude of cloud constructs within HP’s hybrid cloud construct. The final point that I want to make is services. We are specializing a lot of our platform and application lifecycle services for SAP HANA, and we have been collaborating with the HPE Solution Manager and a number of other platform-specific applications like Lanswee Virtualization Management to enable us to move applications around in a multitude of constructs. For example, between public cloud for testing and a private cloud for execution and rollout and deployment. We have built a principal organization at HANA CoE that focuses on assessments and accelerates migration, and we’re contributing already into SAP’s Rapid. Deployment solutions portfolio by building a lot of RDSs ourselves and working also to.

Dr. Chris Nokkentved [00:23:42]:
Build rapid deployment appliances. So there’s a broad palette of investments across a number of areas from hardware, software, services that range from implementation acceleration services to population acceleration.

Sanjog Aul [00:23:57]:
Finally, Chris, what is your message to the enterprise IT leaders who wish to embark on this journey with In-Memory? What things they should do, what they should watch out for, and what’s the future for them? And not more for the future, but what is it that they should do to go about making the most value of this new computing paradigm?

Dr. Chris Nokkentved [00:24:15]:
Yes, HP views SAP HANA as a very central environment for the future of all SAP-centric ecosystems out there and companies and enterprises. We view it as a single environment where you can combine and marry analytics, transactions, and planning in a flexible and seamless interaction that will allow the organizations to move away from how the platform works and rather focus on what are the business outcomes of the initiatives that they’re driving with the business and what is the impact of these initiatives to the business.

Sanjog Aul [00:24:46]:
Jeff?

Jeffrey Word [00:24:47]:
Yeah, the, I think the key thing that people need to understand is this is not something that can be, you ignored at this point. We’re past the point of market acceptance on this, and what people need to understand is SAP is the world’s largest business application provider. We bet the entire future of our company on HANA, and that’s not hyperbole or overstatement in any way. That’s the absolute truth. So much so that all of the other database vendors have now added In-Memory capabilities to theirs in following our lead. So this is not something that’s going to go away. It’s not something that people can ignore,

Jeffrey Word [00:25:18]:
and so I want to ask all of the listeners, this is something you need to think about because it is a transformation. It is a transition from an old, older disk-based architecture to a new In-Memory-based architecture. There are some pitfalls. It’s not a panacea, and what they need to do is they need to really stop and think about the business value, and at each step along this transition, really identify what the business value is going to be and only do things that bring significant business value at each one of those steps. They need to plan out what that roadmap is for getting onto this new architecture bit by bit but as Chris has said, and I’ll This is a holistic approach.

Jeffrey Word [00:25:53]:
It’s not a piece-by-piece thing in the long term. It’s a piece-by-piece thing as we progress towards that over the next few years but SAP believes that most of our customers are going to have HANA as the core backbone of their enterprise in the next few years, and we’re developing all of our applications have imported to it, and we’re developing hundreds of new applications and innovations that are going to be powered by it. So it’s something that needs to be thought about seriously and start planning on today.

Jeffrey Word [00:26:17]:
First, but we want to stress again that business value is the driver for this, and so each step along that path, make sure that you clearly identify the business value and you make sure you achieve that before moving on to the next step.

Sanjog Aul [00:26:28]:
Once again, thank you so much, Chris and Jeff, for sharing your thoughts and insights on our solutions spotlight segment.

Dr. Chris Nokkentved [00:26:35]:
My pleasure.

Sanjog Aul [00:26:36]:
And listeners, I invite you to find more conversations about In-Memory computing as part of our series at www.ciotalkradio.com/in-memory-computing.

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Summary

The misunderstood beauty of In-Memory Computing is that it really does allow you to do things that were previously impossible with disc-based databases. This is most true in SAP’s HANA, a platform that touts itself as much more than simply an accelerator. SAP is betting the farm on HANA, and they’ve developed it from the ground up to not only be “infinitely scalable,” but to be able to handle existing and innovative new applications. But SAP’s customers are currently struggling to determine just where a use case for this computing paradigm might lie. While some are speeding up existing transactional issues exponentially, others are using HANA to chart new territory, white-boarding ideas and having IT map it for them in a matter of days and adjusting figures in a matter of seconds. The truth is that HANA and In-Memory Computing are not panaceas, nor are they made to run on everything for everyone. Certain applications within certain industries are legacy systems that simply cannot be transferred so simply, but SAP’s supporting partner HP says that you have to look at the cloud platform underneath the application to see the full perspective as to how it might impact the business.

Yet in terms of accomplishing things that could not be accomplished before, HP and SAP challenge their customers and those looking to go the route of In-Memory to start thinking about their IT architecture as an enabler for business capabilities and as a driver of business value. The scaling up process could be fast or it could be major in terms of introducing entirely new tasks and skills to staff, being careful to avoid underestimating the large amount of customization that exists within their current application.

What HANA really allows you to do is go through simulations and what if scenarios when crunching numbers in real time that otherwise would take hours before you could get your job done and physically cannot be completed with a disc-based model because there simply is not a server big enough in the world. SAP hopes that HANA and In Memory really change the way a company looks at their business processes and the type of value they can now bring to their customers. In that light, In-Memory Computing has become a paradigm that can no longer be ignored.

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