Sapphire Now 2018 - only the cloud can deliver the Intelligent Enterprise, says Plattner

Profile picture for user pwainewright By Phil Wainewright June 7, 2018
Summary:
Co-founder Hasso Plattner tells Sapphire attendees that the intelligent enterprise is coming and if they want in, they'll have to move their core apps to SAP Cloud Platform

Hasso Plattner SAP at Sapphire Now 2018
If every keynote at this year's Sapphire Now must have a quote of the day, then the highlight of co-founder and Chairman of the Supervisory Board Hasso Plattner's day two session belongs to CTO Bjoern Goerke. Arriving on stage to talk about SAP Cloud Platform, he described it as the place:

Where the cool hangs out with enterprise — where the cool shit happens.

It's not the kind of language you expect on stage at Sapphire — "Did I just say that?" Goerke asked himself out loud — but it succinctly captures the core intermediary role of the platform, bringing together old and new, established and innovative, to enable what SAP is now calling the 'Intelligent Enterprise'. Even Plattner, who doesn't normally deal in superlatives, declared himself impressed by how much customers are already using the cloud platform to connect systems:

It is amazing the transactions that are already flowing. That is mind boggling.

Yet this was the single moment in the keynote that betrayed real excitement at the enormity of the changes being unveiled. Here was SAP delivering the uncompromising message that organizations who don't want to be left behind in the digital age must put their business systems, and all the integrations between them, in the connected cloud. It was almost as though, for fear of scaring its customers too much, the vendor wanted to make this sound the most natural thing possible, all part of the settled order of things. But for the large majority that still run their core business systems on-premise, that shift, albeit necessary, will be massively disruptive.

HANA and the cloud

It was important therefore for this message to be delivered in the measured, gravelly tones of Hasso Plattner, who, as he reminded listeners early on in his keynote, personally wrote the original version of the R/2 and then R/3 ERP software, back in "the glory days when the founders did everything." For many employees and longstanding customers, Plattner is the one constant that connects SAP's past, present and future.

He has also been responsible for ensuring SAP entrusts its cloud destiny to the HANA database platform, which when it was first demonstrated ten years ago, many saw as a risky bet on untried technology. "For years I was lecturing here on HANA," he said yesterday — but now that it has been proven in deployment at thousands of customers, he can feel vindicated:

The hope I had with the early prototypes became a reality. The speed of HANA and the memory allows us to drop all redundant pre-aggregation in the system, which was one of the root causes for bad system performance ...

We are out of the woods with regards to performance.

Out of the woods — and into the cloud. It fell to Goerke to reveal the day's big announcement — the general availability of SAP Cloud Platform on Google Cloud Platform and Microsoft Azure, alongside the already announced Amazon Web Services (AWS). There will also be a private cloud option on IBM Cloud, aimed at customers in regulated industries and others not yet ready to entrust data to a public cloud provider. This multicloud strategy across all the leading hyperscale cloud platforms — a similar partnership with China's Alibaba Cloud was also announced this week — is a key differentiation for SAP against the likes of Oracle and Salesforce. It gives customers the freedom to choose the underlying infrastructure rather than locking them in to the vendor's own platform.

Intelligent enterprise unites the SAP family

But the bulk of the keynote was focused on what these underlying technology pillars enable, in the shape of the intelligent enterprise. Plattner grumbles at legal advice that SAP can’t have the phrase as an official trademark, so it's just an internal brand. But he reveals that it has been crucial to resolving strategy differences within the SAP 'family' of core and acquired applications:

When we say, all these systems are part of the family, intelligent enterprise, we have a change in the family. All of a sudden the heads of development, the heads of these business units, they come together, try to work together to define what interfaces are necessary. All of a sudden the adoption of HANA [by SAP business units such as SuccessFactors, Concur and others] got accelerated.

As well as the shared sense of purpose, there are management structures in place to ensure everyone follows through on the convergence, he adds:

There is a priority, there is a name behind every single line item. There is a monthly reporting system where people have to come forward and say what has been achieved.

The internal brand name, Intelligent Enterprise, helped a lot ... So we will be integrated.

He anticipates a similar effect now that front office offerings are united under the C/4 HANA branding, admitting that customers had been confused by the previous assortment of product names in the SAP portfolio:

The interesting effect of having a strategy that is understood by the majority of people and having a brand name that is at least as good looking as S/4 HANA — C/4 HANA — it helps.

We had all these names and they were changing faster than I could memorize. The customers became confused. That's not good.

SAP Cloud Platform in the center

Behind the shared branding there's a deeper technology story — a convergence and standardization of metadata and shared services, which enables each application and data source to share data and services with others through the medium of the SAP Cloud Platform. This is a crucial foundation for the real-time connections and end-to-end processes that bring to life the ambition outlined in the previous day's keynote of aligning back-office operations with customer-facing engagement. It also allows for a more flexible approach to delivering new functionality, as Plattner explains:

There's a reason why the Cloud Platform is in the center. Everything we do now, how we connect applications, how we present applications, how we present services, will go through the SAP Cloud Platform.

The objective is not only that we connect everything with everything else, but also that we can deliver enhancements to products without touching the products. We have to reduce the maintenance effort.

Overlaid onto this integrated platform fits the remaining product news of the day. This comprises an extension of the artificial intelligence and other capabilities available under the SAP Leonardo branding, from conversational AI to blockchain as a service. Plattner also dwelt on the imminent opening of a new AI-focused SAP research center in Daytona Newport Beach, nearby to the University of California campus in Irvine, where he points out there are eleven chairs for AI, making it a major center of data science research.

The centerpiece demonstration underlined the impact of these technologies on core processes, from accessing information using intelligent assistants to using automation to eliminate repetitive manual processes such as invoice matching. With the investments SAP is making, claims Plattner:

S/4 is set to be the most intelligent ERP system out there, bar none.

Deployment in the cloud

But all this comes with a caveat. None of this can be delivered at the pace at which it's going to become available unless customers go to the cloud, says Plattner, where SAP can take responsibility for ensuring the software stays up-to-date:

SAP within all of these elements has to be as agile as a startup. If we want to be intelligent, we have to act quickly — not only in development but also in deployment.

It is sad to see that top companies, having deployed SAP basically throughout the company, then are not able any more to take the annual upgrades. [They] fall further and further back, and all of a sudden are five years behind what the top line of SAP development offers.

This is not sustainable in a time where change is rapidly increasing speed ... Fast deployment. That is the message, and this leads straight to deployment in the cloud. SAP takes over the responsibility to upgrade the system, manage the system in case of technical problems. The update will not be simultaneously for all components, or for all products ... probably younger, newer products will move much faster than more mature ones.

SAP Cloud Platform is an integral part of this cloud proposition because of its role in sharing data and joining up end-to-end processes between different SAP and external applications. It also allows for a more loosely coupled approach to adding customer-specific or industry-tailored functionality, he explains:

Extensions have to be built as no-touch components sitting in the Cloud Platform and being attached to the applications via interfaces, so we have a clear understanding what the modifications are, how they interact, and how we have to test them when we do an upgrade to one of the products.

My take

SAP's cloud message has never been more coherent or far-reaching than it has been this week. There's significant refactoring going on under the hood to streamline connectivity across the entire family of SAP applications using the cloud platform. In view of that, I felt that SAP pulled its punches and didn't fully spell out how different its proposition now is in the cloud, compared to the on-premise alternatives.

Perhaps that reticence is partly due to the knowledge that it can't offer all the functionality in the cloud that many customers will need before they're able to make the move. Industry-specific functionality still has to be built out, localization toolkits are still to be delivered, the internal engineering effort to converge all of the products is continuing. The vision is in place and now the execution has to follow.