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SAP's Sapphire To-Do List: Top Of Mind For Partners Will Be HANA, Cloud

Solution providers who'll be attending next week's Sapphire conference are looking for clues about SAP's plans for HANA and cloud software and just how they fit into those plans.

What's up with HANA and cloud computing? And is SAP focusing too much on those technology initiatives at the expense of its core ERP application products?

Those are the questions SAP channel partners have on their minds as they head off to Sapphire Now, the vendor's annual conference and partner summit in Orlando, Fla., next week.

HANA, SAP's in-memory database software, is perhaps the company's most visible technology initiative. Launched in mid-2011, SAP has been adapting all of its application products to run on HANA and is positioning it as a competitive alternative to mainstream database products from Oracle, Microsoft and other competitors.

[Related: SAP Nears 40 Percent Channel Sales Goal But Misses Q1 Expectations ]

On the cloud computing side, SAP has its Business ByDesign application suite for midsize customers and the cloud computing applications it acquired through its 2012 acquisitions of SuccessFactors ($3.4 billion) and Ariba ($4.3 billion).

Partners at Sapphire will be looking for clues about SAP's plans for HANA and cloud software and just how they fit into those plans.

"We want to know more about HANA as they set up their strategy," said Alex Rooney, vice president at Vision33, an Irvine, Calif.-based SAP Gold partner that works with Business One and Business ByDesign applications. The company won its first HANA customer last month, said Rooney, adding, "It'll be a significant [technology] for us going forward. I'm hearing that if you're an SAP partner, HANA better be part of your portfolio."

"I want to know what the strategy is going forward for the cloud and really get a feel for where SAP is going so we can talk intelligently about it with our customers." said Brad Windecker, president of Orchestra, a Portland, Ore.-based solution provider that works with SAP's Business One applications for small and midsize applications.

The bulk of SAP's business remains its ERP and financial management applications, including its Business Suite applications for large companies, Business All-in-One applications geared toward midsize companies and Business One. Channel partners play a major role in selling All-in-One and Business One -- the latter in particular is a key component of the vendor's channel efforts.

But the focus at SAP over the past year or two has been on HANA and cloud computing.

"With HANA they are clearly taking a shot at the database platform market," said Werner Hopf, CEO of Dolphin Enterprise Solutions, a West Chester, Pa.-based SAP partner that focuses on information life-cycle management and business process management solutions built around SAP applications and HANA. "A lot of customers are adopting HANA as a platform for their data warehouse," Hopf said.

But Hopf worries that SAP may be devoting too many resources to HANA at the expense of its bread-and-butter ERP applications. "The heart of SAP is still ERP. It's their traditional area of strength," he said. He hasn't seen a lot of momentum in application development from SAP in recent years, he continued, noting that ERP application competitors such as Oracle aren't standing still.

"I think partners would like to see more evidence of innovation on the application side," he said.

NEXT: What's The Future Of SAP's Business ByDesign?

The current 9.0 release of Business One, for example, was light on new features because SAP had to devote more development resources to adapting it to run on HANA, Orchestra's Windecker said. While he acknowledged that he'd like to have seen more functionality in the release, he sees the value in the trade-off and isn't concerned about the focus on HANA.

"Now the functionality they're able to build into Business One is going to be far greater because it's built on HANA," he said, saying Orchestra can now develop applications that take advantage of realtime data. And the HANA support means he has an alternative to selling SAP applications on other vendors' database products. "I love the idea of not having to sell my customers Microsoft SQL Server when we sell them SAP software."

This week SAP unveiled the SAP HANA Enterprise Cloud service, a cloud version of the HANA database. Windecker said that expands his options to offer his customers Business One with HANA as an all-cloud solution.

On the cloud computing front, SAP's revenue from cloud software subscriptions and support was about $350 million in 2012, but the company has set a goal of expanding its cloud business to $2 billion by 2015.

SAP launched Business ByDesign, its first cloud application set, in 2007 and relaunched it in 2010 with a multitenant architecture. Last year the company acquired SuccessFactors and Ariba and began introducing individual cloud applications such as Sales On Demand and CRM On Demand. And Business One is now available as both cloud and partner-hosted applications.

Vision33's Rooney, whose company sells both Business ByDesign and Business One, said his focus at Sapphire Now will be to better understand how the products and SAP's channel initiatives mesh with his own goals. "How do I monetize [SAP cloud software] and how do I build a profitable business around it?" he said.

Lars Dalgaard, who founded SuccessFactors and joined SAP last year when it acquired the cloud company, was given overall responsibility for SAP's cloud business. He's scheduled to deliver a keynote address at Sapphire on Wednesday where he's sure to update Sapphire Now attendees on SAP's cloud computing direction.

Some 500 channel partners are expected to attend the partner summit on Monday before joining the thousands of attendees when the main conference kicks off Tuesday.


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