Taking the temperature: An updates analysis of SAP's data & analytics strategy

In the past year-and-a-half, with the world facing a pandemic like never before, companies across the globe have seen the workload on their IT systems increase significantly. More specifically, data and analytics is a field which has seen a boost in interest through dire need, with organizations resorting to project management, teleconference, ecommerce and collaboration tools that all yield new data volumes that cannot be left unmanaged. The question that pops up here for a lot of companies is ‘how’? As one of the big players in the business intelligence (BI) space, SAP used its annual TechED event in December 2020 to present its vision, strategy and solutions to tackle this challenge (among others). Where does it stand five months later?

SAP closed last year with a focus on hybrid and embedded analytics combined with real-time, business-friendly BI environments capable of efficiently managing a wide variety of data structures and volumes. During its Data and Analytics Virtual Forum last week, the minds from Walldorf continued on this path by keeping the tone lightweight and practical, with an event that was tailored more so to (potential) customers than it was for partners or consultants. Having quite recently rebranded the SAP Cloud Platform (SCP) as the SAP Business Technology Platform (BPT), SAP was quick to expand on the data value equation they pitched during 2020’s TechEd by placing it in the ‘Data Value Pyramid’ (shown below). As a visual representation of the role of data in an organization, I believe the pyramid creates a more relatable overview for a broader audience than solely the data equation. You can see the three ‘variables’ from the data equation positioned vertically on the right-hand side of the pyramid; volume is squarely defined as an IT matter, while the usage and quality variables placed mostly in the area defined by SAP as ‘Business’. Personally, I believe this is a bold claim even with the advancements made with solutions like Data Warehouse Cloud (DWC) and Analytics Cloud (SAC), as the practical environments that my colleagues and I find ourselves in more often than not rely on IT to maintain the quality of organisational data. While I do believe that the evolution of self-service BI (solutions) and the overall more pronounced role of data and analytics within business-oriented circles have narrowed the gap between the two worlds and tackled some of the issues that shadow-IT contraptions could cause, I would not say data quality is a general business topic just yet.

SAP continued its vision from the data value pyramid to the data equation, expressing it in the context of the BPT (shown below) and more concretely in its data and analytics solution portfolio. In similar fashion to last year’s TechEd, data volume is represented by HANA Cloud, data quality by DWC and Data Intelligence Cloud (which, for context, I would definitely not define as a business solution!) and data usage by SAP Analytics Cloud. This definition, although not completely unambiguous, still presents a comprehensive positioning for customers and partners alike in the context of SAP’s greater concept of the Intelligent Enterprise.

The forum proceeded with SAP re-affirming its commitment and investment towards the concept of the BTP, as well as a display of the (2020?) Gartner Magic Quadrant, which positioned SAP as a leader in Cloud database management systems. Although I would agree with the arguments that SAP offers a credible and mature foundation in terms of database expertise, the gap with competitors such as Oracle, Microsoft and Amazon Web Services is still significant. When looking at the Magic Quadrant for Analytics, SAP’s flagship, Analytics Cloud, is broad in terms of functionality (analytics, planning, application design and, as of Q1 2021, reporting) but still does not cover the depth in capabilities that its competitors do. Instead, SAC still leans on peer solutions such as HANA Cloud (PAL/APL) and DI to catch up with these competitor offerings, making it a predominant choice for established SAP customers according to Gartner’s 2021 Magic Quadrant. Moreover, among these established SAP customers, doubt still remains whether or not to purchase SAC as long as the capability gap with BusinessObjects BI and even Crystal Reports still exists (job scheduling, workbook repositories and detailed reporting).

The forum proceeded with SAP re-affirming its commitment and investment towards the concept of the BTP, as well as a display of the (2020?) Gartner Magic Quadrant, which positioned SAP as a leader in Cloud database management systems. Although I would agree with the arguments that SAP offers a credible and mature foundation in terms of database expertise, the gap with competitors such as Oracle, Microsoft and Amazon Web Services is still significant. When looking at the Magic Quadrant for Analytics, SAP’s flagship, Analytics Cloud, is broad in terms of functionality (analytics, planning, application design and, as of Q1 2021, reporting) but still does not cover the depth in capabilities that its competitors do. Instead, SAC still leans on peer solutions such as HANA Cloud (PAL/APL) and DI to catch up with these competitor offerings, making it a predominant choice for established SAP customers according to Gartner’s 2021 Magic Quadrant. Moreover, among these established SAP customers, doubt still remains whether or not to purchase SAC as long as the capability gap with BusinessObjects BI and even Crystal Reports still exists (job scheduling, workbook repositories and detailed reporting).

The bottom line when looking at SAP’s solutions in the greater context of the market, is that its strong integration with own staple products (BW, HANA and S/4HANA) is keeping SAP’s position steady amongst its rivals. Although I can appreciate the fact that SAP is playing to its strengths when looking at the roadmaps for SAC (and DWC), I would be happy if the gap in functionality depth could be closed in the coming years. The warning from Gartner that SAC is a Cloud-only offering is a recurring one, and one that can be explained by considering SAP’s long-term strategy. Walldorf has shown that it is aware of this perception and is increasing its efforts to help on-premise ‘native’ customers to take on the journey to the Cloud. This brings me to the next topic of the forum: RISE.

SAP’s ‘newest offering’ is aimed at guiding customers to the Cloud. The RISE Business Transformation As A Service-program offers customers a roadmap from their current, on-premise landscape, to fully-fledged Cloud-based Intelligent Enterprise. This includes business process redesigns, technical migrations, solution deployments and even managed services. The short presentation for RISE during the forum did not give me enough information to assess it for data and analytics as a field. However, I am curious if the offering goes into the depth necessary to provide customers with options for the specific (technical) questions and challenges they are facing when considering a move to the Cloud. Think about the moving or conversion of legacy data constructs from both on-premise and Cloud sources, sometimes maybe even third-party, to new Cloud solutions without losing the required functionalities. Even if a customer is using (older) SAP solutions, it can still be quite hard to determine what would be the follow-up of that tool in the Cloud. For SAP IS/DS for example, the roadmaps for the current SAP solutions indicate that some of these functionalities will be covered by DI and others by the BTP. This makes it difficult for customers to determine which way to go, let alone to decide to go both ways (financials not withstood). If we look at the matter from the Cloud down to on-premise, SAP’s most important BI Cloud solutions, DWC and SAC, still have functional limitations for specific connections when compared to on-premise alternatives. The same goes for physical/import data connections and live connections. The good news here is that SAP is working hard to close this gap, with updates such as an expanding API library for DWC, dedicated connection options for both SAP and non-SAP systems or the Q2 ‘New Model’-functionality in SAC for better integration with SAP source systems.

Following the main session, I attended the breakout session on hybrid data management. Although this too was more of the same when compared to the TechEd five months ago, SAP did present a renewed view on consolidated management for data and analytics (shown below). Arguing that both evolution and revolution are required to successfully make the transition to the Cloud, SAP does address some of the underlying technical concerns customers tend to have (security, stability, capacity). Though a great argument for a hybrid approach, I would have loved to hear some specifics on the related practical challenges mentioned earlier in this blogpost. The Geberit case presented during this session offered inspiring insights, but lacked just that amount of detail that some customers might have wanted to see.

Looking ahead based on SAP’s Cloud-first approach, ambitious customers might be best off by moving to the Cloud in phases, for example through the Hybrid approach, as the all-Cloud scenario still has its caveats even if fully and properly deployed. To illustrate: SAP presented a customer case of a healthcare company, showcasing the possibilities of an end-to-end Cloud BI landscape involving HANA Cloud, SAC, DI and DWC. While interesting and effective, through this case it also became clear that to leverage specific functionalities (such as certain predictive capabilities for specific business needs), a customer will have to switch from HANA Cloud to SAC on to DI to achieve the required (or preferred) result. While of course I understand that such a showcase is most effectively done with all-SAP solutions, it can also highlight the need for these specific product combinations to leverage some of their crucial capabilities. It would be interesting to see if SAP’s solutions can be just as powerful with third-party integration, as most customer cases shared during the forum concerned SAP-dominant IT landscapes. While this might be a strength and a fair reflection of reality, the capability to gain ground through the possibility of such integration might increase adoption for certain SAP solutions.

To conclude, I will say that it’s good to see that SAP is giving the guidance towards the Cloud renewed priority, and that it is expanding both the roadmaps for its solutions as well as its services to facilitate customers in these ambitions. A Cloud-first strategy is only as strong as its supporting solutions, and SAP is remaining faithful to its vision by continuing to offer developments that facilitate this reality. While there are still gaps to be closed and challenges to be tackled, SAP is making steps where it matters.

Are you facing specific questions or challenges in BI or analytics or are you considering SAP solutions? Do not hesitate to contact Expertum Consulting!