New business services come to SAP HCP, weakening the IaaS/PaaS distinctions

SUMMARY:

SAP shifts towards business process as a service with its latest HCP release. It reflects a movement vertically in the cloud stack towards features usually associated with SaaS applications.

The announcement yesterday about new business services for SAP’s HANA Cloud Platform (HCP) – SAP’s PaaS offering – was buried in a couple of paragraphs in the press release and was largely overshadowed by HANA Vora  with its important ramifications for Apache Spark and Hadoop.  Yet, the HCP-related changes have a critical and broad impact on SAP’s cloud-related efforts.

The new services were announced yesterday but there isn’t a detailed description of what these services contain. Earlier this year, I discovered descriptions of some of the hybris-based services on an internal SAP site that was publically available.  Yesterday, the hybris PaaS – “YaaS” moved from a private to a public beta and information about additional services became public knowledge. Let’s combine both sources to take a quick look at these new services that are coming to HCP.

Service Description
Commerce as a Service Commerce as a Service (CaaS) connects brands and customers and facilitates interactions and transactions on all channels – by putting public cloud APIs for commerce at the heart of the business. It ships with modern responsive merchant tools to manage everything from product content and prices to customers and orders, and a storefront accelerator to rapidly deploy great experiences.

CaaS takes you global with built-in multi-language, multi-currency and multi-site support and a micro services plug-in framework local payment methods, tax calculation and shipping options. [SOURCE]

hybris Loyalty as a Service Hybris Loyalty Management is a brand new application based on the micro-services architecture and Cloud Foundry. It extends Hybris Commerce as a Service solution and helps retailers easily run their loyalty programs to engage customers, deliver personalized promotions, encourage advocacy, and increase sales. [SOURCE]

Note:  This service is mentioned on YaaS’ “business scenarios” pagebut isn’t available on the marketplace.

hybris Customer Engagement Center as a Service The Customer Engagement Center is YaaS.io Cloud Stack based to enable our customers to provide simple and direct next generation customer service via Peer-to-Peer VideoChat and Social Media capabilities [SOURCE]
Tax as a Service SAP Localisation Hub Tax enables you to easily determine and compute the applicable taxes for your invoice/quotation ensuring tax compliance. Currently, taxes can be determined and computed for over 70 countries in the world.

SAP Localization Hub Tax ensures tax compliance in a seamless fashion for consumers.  [SOURCE]

Note: There are other services (such as Email) available in the YaaS market but these are more “technical services” and are similar to services already available on HCP

Why are these business services interesting?

The emergence of these new business services demonstrate a shift in HCP away from being primarily a PaaS to representing a platform that provides Business Process as a Service features – a shift from a technical focus to a process-focus.     If you take a look at the existing services on HCP (for example, Jam, HCI OData provisioning, Persistence Service, Document Service, Mobile Documents, Performance Statistics, etc), you will see that the existing services are focused primarily on lower level development tasks.  Other PaaS competitors (AWS OracleIBM BlueMix, etc) have a similar emphasis – indeed, this is the usual intention of such platforms to provide a strong technical foundation so that developers can focus on application logic.

The new business services announced yesterday, however, play a different role in such environments. As this presentation about YaaS demonstrates, “business services” are distinct from “core services”.

HCP1

Note: Individuals more versed in “SAP Cloud-speak” might be wagging their virtual finger at me and accuse me of mixing up hybris’ YaaS and SAP’s HCP – two distinct PaaS products.  Yet, they are moving closer together and as today’s press release suggests the business services which originate in YaaS are going to be offered as part of HCP.  How the two systems integrate at an infrastructure level is a concern for those wizards responsible for the different SAP DC s.

APIs that provide business services are not unique – yet the entities that provide them are usually SaaS applications (for example, e-commerce via Sphere) and which exist in isolation.    Such APIs are often used in HCP extensions like those developed for SuccesFactors.  I get the feeling that these new business services have a different focus.  When we talk about extensions, the applications in question are external to the platform.   Broadly speaking, these new business services are not external but exist within the platform.

HCP2

The old e-commerce functionality in Hybris was redesigned using modern micro-services architecture. When I consider this change, I’m reminded of Naomi Bloom’s quest towards True SaaS – YaaS within HCP represents a True SaaS version of the old Hybris stack (see Andrea Stubbe’s video on YaaS for more details).

Despite the interesting transition of the e-commerce-related hybris functionality to a new architecture, of the services that were presented yesterday, I find “Tax-as-a-Service” the most interesting – primarily, because I consider it a more generic business service that has a broader focus than just e-commerce.

It is part of a “SAP Localization Hub” which isn’t described in more detail but I assume will contain a variety of other services in the future.   There is a quick description of the service on the YaaS marketplace and an accompanying blog on SCN provides additional details. Based on various clues, it looks like the new service originated from SAP’s Globalization Services team. The associated SCN blog provides additional context regarding the advantage of using this service.

One of the central differentiators of the SAP tax calculation service is the tax configuration content which is pre-delivered and bundled with the service. The localization know-how and global presence that SAP has, is effectively utilized here to engage with various legal bodies globally, interpret the changes on laws of taxation and convert those in the form of content that governs the tax service. This content is seamlessly pushed to the cloud hosted service so that the consumer always stays compliant for tax determination and calculation.

Exploiting this localization experience in business software reflects a similar strategy being pushed by GE and its Predix platform:

GE’s Predix system is built on top of GE’s experience in manufacturing turbines, locomotives and jet engines. It knows something about what data is crucial to collect, how to analyze it, and what to look for among anomalies, said Kodesh.

“You have to know what it means for there to be a high temperature on half of the turbine blade… You need the ability to know the physics of those models” that get embedded into Predix data analysis applications,” he said.

Among other things, such a system needs to recognize machine data from the network edge, such as noisy drill data, clean it if necessary, transform and store it, and then analyze it. Data from sensors on machines may be polluted with external noise, and a data service will have to sort the good data from the bad. The Predix Cloud will have at least 100 micro data services capable of helping customers capture and store their machine data.

“We don’t see many could service providers who are manufacturing these industrial machines,” said Kodesh. “We humbly believe we’re the only ones with the experience” to capture and make effective use of the machine data. [SOURCE]

Yet, SAP’s most extensive business experience (the proverbial treasure chest) is locked in other applications. One perfect example is S4/HANA – SAP’s next generation business suite.  This is the heart of SAP’s process experience. Can we expect this new product with its enhanced HANA-based architecture to move to micro-services based on HCP?  I wouldn’t expect this transition any time soon – this evolution would rip a hole in the heart of SAP’s most important product. Thus, I expect hybrid applications that will use the best of the best worlds.

HCP3It will be interesting to see which other business services will be released now that the hybris ones are active.  The newly released service “Tax as a Service” is one example of a non-hybris service. Will we see SuccessFactors content or content from Concur as micro-services? I expect new business services won’t cannibalize existing major products.   There are a number of smaller cloud products (SAP TicketingSAP EHS Regulatory Documentation On DemandSAP Product Stewardship Network, ) that are more limited in scope and could be broken down so that the associated  business services  are available to other applications. There has already been some work within SAP moving billing to YaaS.

The broader impact of these new services is reflected in the work of hybris partners who have already been working on IoT-related scenarios that run on YaaS.

…we built the NodeJS powered microservice atop YaaS. We also created a mobile app that leverages Near Field Communication (NFC) to retrieve product information that includes a) the date of production, b) a stamp of authority, c) the warranty information, and, if applicable, d) previous owner. We can easily scale our solution across varying product categories.

Perhaps the most important aspect of our solution is that is provides luxury brands a mechanism to sell experiences beyond the point of sale. The experience we conceived of gives users another way of engaging with brands in meaningful ways.

Since HCP already has IoT functionality, it will be curious to see how HCP and YaaS deal with overlapping functionality (there are other areas of overlap as well – such as customer and product).

NoteAs I started exploring the YaaS developer API for details on this new tax service, I found something interesting. There were two “Tax” APIs available – “Tax” and “Avalara Tax” – there was no reference to a “Localization Hub”.  I must admit that I was a bit confused.  As I started digging, I discovered that the “Avalara Tax” API referred to a service that is provided by an external Hybris partner and requires an account from the external partner.   Although I did some API mining, I didn’t find any additional details on the “Tax” API so I assume that this is from SAP. 

These two tax services are an example of multiple providers of the same subject area.  Not competition between partners but competition between SAP and a partner. So much for restricting partners to those “white spaces” that SAP didn’t want to cover. 

Final words

The inclusion of business services in HCP exploits SAP’s lengthy process experience (who can forget SAP’s massive wiki with Enterprise Service (ES Bundles) and reflects a movement vertically in the cloud stack towards features usually associated with SaaS applications.

There is, however, another tendency in HCP in the other direction – a downward movement involving a weakening of the distinctions between PaaS and IaaS.  For me, a first indication of this trend was the ability of customers to install the Lumira Server on the HCP as HANA DUs.   Another sign of this tendency is the upcoming support of containers (such as Docker) in the HCP.  The possibility of supporting generic containers (“lets frame it as a bare-bone Linux VM, sitting next to ur java apps, managed the same way, offering direct ssh access”) in HCP is another sign that the lines between IaaS and PaaS are blurring. This trend isn’t specific to HCP but if SAP is moving in this direction, there are certain considerations / challenges that will emerge.

As the new business services suggest, HCP (and SAP’s broader cloud offerings) along with the broader market are evolving.  Everyone is talking about micro-services (YaaS uses them extensively) but their use in a PaaS-setting is on occasion non-trivial and developers (especially those accustomed to those monolithic enterprise applications present in many SAP customers) will need assistance to make the transition.  Considering such developments, I’m missing better support in HCP for cloud orchestration for example, Kubernetes but maybe we will hear something about this at the upcoming TechEds.

    Comments are closed.

    1. Phil Wainewright says:

      Thanks Dick, very interesting. PaaS is a very broad spectrum that runs from IaaS with one or two extra technology services (eg some AWS choices) all the way up to highly configurable SaaS (eg Salesforce Platform). Another definition (Pivotal, Oracle) focuses more on platform portability between public cloud and private instances. 

      Most vendors’ offerings sit at a point somewhere along the spectrum. It’s highly unusual to encounter a vendor that occupies the entire spectrum, but the above suggests this is what SAP is aiming to do.

      Is anyone taking responsibility for ensuring architectural consistency across this very diverse stack? That would be my worry. If no one’s in charge, it’s very easy to end up with a morass of conflicting API definitions and data models.

       

      1. says:

        “Is anyone taking responsibility for ensuring architectural consistency across this very diverse stack? That would be my worry. If no one’s in charge, it’s very easy to end up with a morass of conflicting API definitions and data models.”This is truly the challenge that SAP is going to encounter as the number of business services increases.   I’ll be watching closely to see what governance / certification is put in place to assure that the quality of the APIs is maintained.D. 

    2. says:

      Always interesting to get direct feedback from you Dick! And yes, you captured the most important trend:when you look at cloud you realise that IaaS has became a commodity business already, here’s it mostly about the price point. I’d argue we also see a consolidation at the PaaS level and most of the players are using Cloud Foundry as the baseline. Hence, the main differentiator will be the capabilities and services provided as part/on top of the platform. This has always been SAP’s take and hence we keep investing to constantly grow the – already  comprehensive – set of capabilities and platform services (integration, mobile, UX, IoT, collaboration, etc.) However, SAP takes these capabilities to the next level – beyond pure technical capabilities SAP has always been a company delivering value by supporting business processes and what you described is how that vision manifests in our cloud platform. SAP is committed to roll out business functionality and processes such as the ones you mention to make it simpler & faster than ever to develop new cloud applications and/or extend existing solutions. It’s just the beginning…More details to come at TechEd … 😉 Cheers,matthias

      1. says:

        It is tough call to determine what is more important for HCP’s future success – the move towards containerization or business services. In my humble opinion, I’d suggest that the new business services are more critical. There are a variety of CloudFoundry-based PaaSs that can offer containers / Dockers. There are very few of these competitors that can provide the variety of business services that will hopefully be available on HCP.Regardless, I’ll be expecting some mind-blowing updates at the upcoming TechEds. D