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SAP Bets Its Future On Hana And SaaS

Hana Will Bolster The Licensed Business, But SAP Needs A More Aggressive SaaS Strategy To Maintain Double-Digit Revenue Growth

October 4, 2013


Why Read This Report

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.

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Table of Contents

  • SAP Is Doing Well, But Its Revenue Model Is Feeling Pressure
  • Customers Remain Loyal To SAP's Mature ERP Platform
  • SAP Makes Hana The Center Of Its Universe Of Products
  • SAP Focuses On Four Pillars Of Cloud Opportunity, With Mixed Success
  • Hana Will Help, But Not Enough For SAP To Grow At Double-Digit Rates
  • recommendations

  • SAP Clients Can Buy In Early Or Lag Behind
  • Supplemental Material

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