SAP Launches Next Generation Of Its Flagship Applications

SAP unveiled the next generation of its flagship application suite Tuesday, built on the company's HANA in-memory database and designed to run on-premises or in the cloud.

The new SAP Business Suite 4 SAP HANA, S/4HANA for short, will over time replace the SAP Business Suite line of ERP applications that's been the core of the vendor's business for a decade.

SAP also has developed a new version of its SAP Business All-in-One application set based on the new S/4HANA release. All-in-One, a popular product with solution providers, is a preconfigured edition of the enterprise software that's designed for midmarket customers.

[Related: SAP Predicts Cloud Revenue To Surpass On-Premise Software Sales By 2018]

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"We have a completely new system built on HANA," said SAP Chairman and Co-Founder Hasso Plattner, who in a press event held at the New York Stock Exchange Tuesday touted the capabilities of the new software. CEO Bill McDermott, speaking at the same event, called the S/4HANA announcement "the biggest product launch in SAP's history."

SAP Business Suite, the vendor's core ERP application set, has long been the foundation of SAP's business. But in recent years the company has been expanding into cloud computing, largely through acquisitions such as SuccessFactors, Ariba and Concur.

HANA, an in-memory database the company launched in 2010, has become the platform for all of the company's software development. Two years ago, SAP integrated Business Suite with HANA, allowing it to take advantage of the in-memory database's capabilities.

The new S/4HANA application suite can be deployed on-premises, in the cloud or in a hybrid environment. It includes the SAP Simple Finance line of financial management applications that SAP launched at the Sapphire conference last year, and executives at the time said it would ultimately be part of a broader product line. (The "S" in S/4HANA is for "simple," McDermott said, and the "4" signifies the fourth generation of the software.) It also incorporates the Fiori user interface SAP debuted two years ago for desktop and mobile devices.

In something of a gamble for SAP, HANA is the only database supported by the new software: It does not support databases from Oracle, IBM and other vendors as the current-generation Business Suite applications do.

Because of its in-memory architecture, SAP S/4HANA will offer significant performance improvements, making it more capable of working with big data and Internet of Things systems, Plattner said.

Like the SAP Business Suite, the new S/4HANA is primarily targeted toward larger businesses. Systems integrator partners such as Accenture, Capgemini, Deloitte Consulting and PwC are often involved in implementations of such applications.

"SAP S/4HANA is a game-changer for ERP and provides an entirely new way for our clients to simplify their business and provide a better customer experience in a digital, networked and complex world," said Jan Waals, a principal at Deloitte Consulting, in a statement.

SAP Business All-in-One is a version of the Business Suite applications that's packaged for midsize businesses and organizations and preconfigured for specific vertical industries and countries. There are some 20,000 All-in-One customers, many of whom acquired the software through solution providers.

SAP has developed a new version of All-in-One based on the new S/4HANA applications called SAP S/4HANA Business All-in-One Edition, said Claus Grunewald, the vice president in SAP Ecosystem and Channels, who's in charge of bringing S/4HANA to the channel, including resellers and development partners.

While some customers will wait for an opportune time to adopt the new software, such as during a regularly scheduled upgrade, "Many of our installed customers have been waiting for this," Grunewald said, in an interview. "That's very good news for partners. I know many [customers] want to upgrade as soon as possible. That's where we see our partners acting more quickly."

He noted that in the last two years the channel has been responsible for selling more than 50 percent of the instances of All-in-One that run on HANA -- an indication of potential demand for the new edition.

SAP will continue to support the current version of All-in-One through 2025, Grunewald said.