The
SAP Business Suite 4 SAP HANA FAQ
Today, SAP released its next generation ERP platform,
SAP? Business Suite 4 SAP HANA? or SAP S/4HANA for short. Quoting from the
press release:
“Today SAP is redefining the concept of enterprise
resource planning for the 21st century. SAP S/4HANA is about uniting software
and people to build businesses that run real-time, networked and simple,” said
Bill McDermott, CEO of SAP. “When Hasso Plattner invented SAP HANA, we knew the
day would come for SAP Business Suite to be reinvented for the digital age. At
a moment when businesses around the world need to enter new markets and engage
with their consumers in any channel, there’s now an innovation platform
designed to drive their growth. This is an historic day and we believe it marks
the beginning of the end for the 20th century IT stack and all the complexity
that came with it.”
If you’re at this page, you’re probably wondering what
S/4HANA is all about. Here’s what you need to know.
2. How strategic is S/4HANA to SAP?
3. What does the “S” in SAP S/4HANA mean?
4. What databases will SAP S/4HANA run on?
5. What will S/4HANA look like?
7. Why is there no support for other DB vendors?
8. What if I am still on Oracle. Will I still get support from SAP?
9. Will I still get innovation if I do not move to HANA?
10. Does SAP S/4HANA still run on the ABAP platform?
11. Is SAP S/4HANA Backwards Compatible?
12. What modules are available for SAP S/4HANA?
13. What’s the difference between SAP S/4HANA and the existing Business Suite
powered by SAP HANA?
14. What is the upgrade path to SAP S/4HANA?
15. What is the business case for SAP S/4HANA?
16. Will SAP S/4HANA run on-premise or in the cloud?
20. Is S/4HANA Cloud Multi-Tenant?
21. What is the roadmap for application delivery?
22. What skillsets are required?
23. Does this have an impact on the SI market?
24. Why isn’t S/4HANA based on byDesign?
25. What are the licensing implications for SAP S/4HANA?
SAP S/4HANA is a replacement to the SAP R/3 or Business Suite platforms that have
been in place in many global businesses since the release of SAP R/3 in 1992.
The important thing about the SAP S/4HANA launch is that
it clearly lays down SAP’s software strategy for the next 10 years. The launch
is done in parallel with a Capital Markets day, which means that SAP is looking
to immediately explain the impact to investors and customers.
How strategic is S/4HANA to SAP?
To put this into context, Hasso Plattner, SAP Chairman of
the Executive Board, was quoted as saying:
If this doesn’t work, we’re dead. Dead in the water.
SAP is committing all of it's development resource to
rewriting some 400m lines of code – so this is the most strategic development
decision in SAP’s 40-year history.
What does the “S” in SAP S/4HANA mean?
The “R” in SAP R/3 stood for “Real-time”, and whilst
S/4HANA is all about the real-time business, SAP chose to use “S”, meaning
Simple.
When SAP built R/3, it was built to run on any database
(AnyDB), and used the capabilities of the lowest common denominator. This led
to tremendous complexity in the software design which has persisted through
over two decades.
With S/4HANA, SAP is rewriting the software layer to take
advantage of the tremendous performance of SAP HANA, which leads to a dramatic
simplification of the data model and software. Data size is reduced 10:1 and
even the number of database tables is reduced 10:1 in many areas.
In addition, several decades of experience have been used
to simplify the user experience with the SAP Fiori UX front end, with a modern
user experience and fewer screens and clicks.
SAP S/4HANA is no less real-time, but it is simpler too.
What databases will SAP S/4HANA run on?
As its name suggests, SAP S/4HANA will only run on SAP’s
HANA platform, and it will not run on any other platform. This is extremely
significant because previously, all SAP products were designed to run on any
database platform, including those from Oracle, Microsoft and IBM in recent
years.
To be clear, SAP S/4HANA will run only on the HANA
platform.
The User Interface for S/4HANA is SAP’s Fiori responsive
UX. This will be the front for on-premise S/4HANA, cloud S/4HANA and all the
centralized cloud applications that form part of S/4HANA including Concur,
Fieldglass, Cloud for Customer and Success Factors.
I wrote about that in a lot of detail in the SAP HANA FAQ, but SAP HANA is a next-generation database technology,
which runs in main memory and processes information extremely fast. It’s so
fast that it does not need a separate operational analytics system or data
warehouse.
It is the platform for all of SAP’s innovation. Because
it is so fast, it is no longer necessary to hold all of the duplicate data in a
transactional system including calculations like percentages, totals, indexes
and aggregates. This leads to a much smaller data footprint and dramatically
faster processing.
Why is there no support for other DB
vendors?
The SAP strategy since 1992 was to support all vendors.
This happened at a time when UNIX systems were prevalent, and every IT
department had their favored database and platform.
At that time, SAP was displacing mainframe vendors, IT
spending was focused on the millennium bug and databases were broadly
equivalent in functionality. SAP focused on an open platform that built on any
RDBMS and this contributed to the dramatic rise of SAP in the Enterprise.
In doing so, SAP built applications based on the lowest
common denominator of all database features, and was unable to take advantage
of database-specific functionality like stored procedures.
In the last decade, there has been three intervening
factors.
1. The rise of cloud platform-based
competitors like Salesforce and Workday means that applications exist that are
deeply integrated into the database layer, and perform better for it
2. There is less of a focus on openness of
what platform software runs on, and more of a focus on openness of integration
and APIs. The DBA no longer has the power-base in the Enterprise
3. SAP built its own database with SAP HANA,
that has the capability to be incredibly differentiating, but performs much
like any other database when running the “lowest common denominator” code.
For these three reasons, SAP had to re-platform to what
it calls “the fastest mover” – its SAP HANA platform. Unfortunately, SAP HANA
is sufficiently innovative that the rewritten S/4HANA software performs
terribly on the traditional RDBMS systems.
What if I am still on Oracle. Will I still
get support from SAP?
Yes, and we can expect SAP to retain its relationships
with other database partners. There is an install base of tens of thousands of
Business Suite customers running other databases, and these will not be
forgotten.
It’s important to remember that ERP systems have
extraordinary longevity – the lifespan can be 10-20 years or more, and SAP will
continue to support existing systems in the long term.
SAP notes that it will continue to innovate in the
Business Suite for AnyDB – for example, by porting any innovations which are
created for S/4HANA which will run on AnyDB back to the Classic Business Suite
code base.
In practice, this means that existing Business Suite
customers will continue to be supported, but those that want innovation will
need to move to S/4HANA.
Will I still get innovation if I do not
move to HANA?
SAP will certainly provide security and regulatory fixes
for what they call AnyDB customers (Oracle/Microsoft/IBM) but innovation will
be focused on HANA.
This already happened in the SAP BW data warehouse
software: in the latest SAP BW 7.4 release, almost all the innovations for
customers are only available for the HANA DB.
Does SAP S/4HANA still run on the ABAP
platform?
Yes, S/4HANA will be based on SAP’s ABAP platform.
The primary extension framework for all S/4HANA systems
is the HANA Cloud Platform (HCP) Extensions. This allows customers, SIs and
ISVs to extend S/4HANA in a compatible way.
ABAP changes will be restricted to Private Cloud and
On-Premise versions.
Is SAP S/4HANA Backwards Compatible?
Once you have moved your Business Suite to the HANA
platform, either on premise or in the cloud, it will be possible to take
advantage of SAP S/4HANA components as they become available.
Existing code will continue to run because ABAP is
compatible with HANA. Some code requires optimization when customers move to
the HANA platform, but this is normal.
What modules are available for SAP S/4HANA?
Currently, there is support for core finance (GL). This
will be extended to Logistics in 2015, and other modules will follow. It’s
worth noting that the existing Business Suite code lines are backwards
compatible with HANA, so all the existing supported modules will run.
SAP will rewrite the existing modules for HANA over a 3-5
year period, based on popularity.
What’s the difference between SAP S/4HANA
and the existing Business Suite powered by SAP HANA?
Today, there is no difference. Simple Finance is
available on premise or in the cloud and it is an add-in to the existing
Business Suite.
With Simple Logistics, we expect the first cloud-first
release of a SAP ERP product. This likely will pave the way for a separate
installation for SAP S/4HANA through 2016 and the regular Business Suite and
S/4HANA will part ways.
What is the upgrade path to SAP S/4HANA?
The initial path is to move to the Business Suite on HANA
platform, and the SAP S/4HANA move will be possible. For example, the
conversion to Simple Finance is an automated data migration.
Here’s an excerpt from SAP CTO Irfan Khan’s blog post:
Moving to SAP S/4HANA for a typical existing SAP ERP
6.0 customer will require a database migration from any database to SAP HANA,
combined with a move to the latest enhancement package and the deployment of
the exchange innovation, meaning the current code is replaced by the new one.
Moving to SAP S/4HANA for an existing SAP Business Suite powered by SAP
HANA will be even faster as only the deployment of the exchange innovation is
required where current code is replaced with the new one.
What is the business case for SAP S/4HANA?
There are some generic IT-based business case points for
SAP S/4HANA: reduction in data footprint, TCO, development costs and faster
transaction processing and reporting.
On the business side, each specific Line of Business
module will have specific benefits. For Simple Finance these are focused around
the CFO: faster close, reduced debtor days, lower training costs, streamlined
approvals. Since other modules are not yet available, their specific benefits
have not been addressed yet.
SAP came under a lot of pressure in 2014 from the User
Groups to deliver information about business value with its technology, and we
can expect SAP to be extremely explicit about the benefits of moving to SAP
S/4HANA.
Will SAP S/4HANA run on-premise or in the
cloud?
It’s clear that cloud computing is SAP’s stated
direction. SAP S/4HANA will have three modes – a Public Cloud, Private Cloud,
and on-Premise. It will be “cloud first” approach and the cloud versions will
provide innovation earlier than the on-premise version.
The public cloud will be a shared HANA multi-tenant
database using the HANA multi-tenancy database option. This will have mandated
quarterly releases containing new functionality, and there will be one
code-line for all customers.
In the quarterly releases starting in Q1 2015, there are
three initial options:
1. Finance: Simple Finance
2. Professional Services: Project Systems,
Fieldglass, Employee Central
3. Sales: Simple Finance, Hybris, Cloud for
Customer
The user interface will be Fiori across the board for all
the options, and note that Fieldglass, Employee Central, Hybris and Cloud for
Customer all run on their own cloud and are shared by all customers.
Despite the fact that there are disparate clouds, the
user experience is designed to seamlessly knit the products together into one
interface.
The S/4HANA Private Cloud is designed for customers who
are looking for increased security and privacy and who don’t want to share a
database container with other customers. Despite that, quarterly releases will
be mandated for Private Cloud customers.
The scope for the private cloud will be delivered at
SAPPHIRE 2015, in May, but it is designed for larger scale adoptions, with
customizations, and the consumption and conversions of on-premise Business
Suite systems.
The SAP S/4HANA on-premise option will lag behind the
Public and Private Cloud offerings and this is deliberate. On-Premise customers
tend to update less frequently, so yearly updates are planned.
In addition, it will be possible to migrate a Business
Suite system into the SAP S/4HANA cloud, and then migrate it back into an
on-premise system.
Is S/4HANA Cloud Multi-Tenant?
The Concur, Fieldglass, Ariba and SuccessFactors clouds
are already truly cloud multi-tenant.
The Public Cloud version will use database multi-tenancy,
which is quasi-multitenant from a cloud perspective. ABAP Code-lines,
configuration tables etc. will not be shared yet between customers on one SAP
HANA container database. This is expected to come in time, as SAP HANA supports
true cloud multi-tenancy.
What is the roadmap for application
delivery?
SAP has stated a “Phased Roll-out” strategy which will
take years rather than months to deliver
The first two modules will be Simple Finance (available
now) and Simple Logistics (available soon). Following that, we expect
functionality to compete with Salesforce and Workday – Sales, and HCM – to be
delivered in 2015. Further modules will follow that based on popularity.
There is also a long tail of functionality that has low
adoption: add-ins with minimal adoption will be supported on S/4HANA but may
never be optimized.
The roadmap is expected to be released at the annual
SAPPHIRE conference in May 2015. This roadmap is expected to be closely tied to
customer journeys and business value including ROI and TCO models.
As previously explained, the Private Cloud version will
require HANA Cloud Platform (HCP) Extensions. These will be a key commodity in
all S/4HANA projects.
In addition, the ABAP programming language didn’t go
away, and ABAP OO programmers will be as popular as ever.
HANA DB skills won’t be lost, although SAP plans to take
care of the feeding and watering of the systems in the Public and Private
clouds.
More significantly, there is a new role emerging in the
market for business-savvy configuration experts who will quickly tailor S/4HANA
systems for customers using the new guided procedures for configuration.
Does this have an impact on the SI market?
Yes it does, and this continues a trend that has been
happening for some years outside the SAP Ecosystem.
SAP S/4HANA projects will be faster and cheaper, and
there will be less time spent doing configuration and development. Business
Consulting skills will be in-demand, but ERP configuration skills will slowly
wane away.
Do note that from a consulting perspective, the transition
to S/4HANA will take 10 years or more – Enterprise ERP systems are extremely
sticky.
Why isn’t S/4HANA based on byDesign?
When SAP built byDesign, they elected to completely
change the data model. The programming language is different, which meant that
a move to byDesign is effectively a complete data migration and rewrite.
SAP realized that Business Suite customers wouldn’t want
to undergo this level of change, and so they built S/4HANA on the original
Business Suite.
What are the licensing implications for SAP
S/4HANA?
For various reasons, SAP S/4HANA is a new product SKU,
which means that it does have to be purchased by customers. Existing customers
will not get SAP S/4HANA licenses included in the maintenance of their SAP
Business Suite, but existing SAP Business Suite for SAP HANA customers are
covered.
SAP has also been clear that they are looking to take a
larger portion of customer spend in the cloud – the average revenue per
customer over 5 years is higher than for on-premise software.
The existing 15% SMBV license will be available for SAP
S/4HANA for any customer who makes a purchase in 2015 and is set to include all
the future S/4HANA innovations.
Final words
Make no doubt – SAP S/4HANA is the biggest announcement
SAP have made since R/3 in 1992. It is a significant event for the business
economy of the world as a whole, and a very significant event for SAP
customers.
SAP is doing a significant financial promotion this year,
no doubt with the intent of putting a S/4 HANA purchase on every CIO’s
consideration in 2015.
More than anything, it makes a very clear statement about
SAP’s product direction, and customers will appreciate this.