Why Read This
SAP's position as the largest business application vendor is not in doubt; whether it will be a market leader in revenue growth and in innovation is less certain. Anticipating the market's growing shift to the cloud, SAP launched new software-as-a-service (SaaS) products but failed to generate material subscription revenue until it acquired SaaS vendors Ariba and SuccessFactors. While the SaaS applications supplement the core suite, they may not provide a big enough growth engine to offset the risk of stagnation from an aging applications platform. So, SAP now is counting on Hana — its in-memory computing architecture that combines real-time analytics, middleware, and database services, and transaction processing on a single platform — to boost growth. Hana as a standalone analytics platform has added a significant revenue stream already, but SAP faces a much bigger challenge in getting clients to use Hana to run its core enterprise resource planning (ERP) applications and middleware services. SAP will drive broader levels of Hana adoption and ecosystem growth, and strengthen SaaS adoption beyond the two acquired solutions, but this won't go far enough or fast enough to sustain double-digit revenue growth beyond 2013. In that scenario, SAP customers won't have to make disruptive software replacements, but they will face heavy pressure to adopt Hana and SAP SaaS solutions.
Tags: Analytics Applications, Application Upgrades & Maintenance, Business Architecture, Cloud Computing, Customer Relationship Management (CRM), Enterprise Resource Planning Applications (ERP), Financial Management, Human Resources Management Applications, IT Spending Forecasts, Planning & Fulfillment, Software-as-a-Service (SaaS), Tech Sector Economics, Technology Adoption Data, Technology Pricing & Licensing