At its Sapphire conference next week in Orlando, Florida, SAP will spotlight 23 customers that are using its High Performance Analytic Appliance software, Hasso Plattner, SAP’s co-founder and chairman of its supervisory board, said yesterday in an interview. The software, dubbed Hana for short, can speed performance by storing reams of database records in a computer’s memory instead of on slower disk drives. Coca-Cola Co. is also a customer, Plattner said.
Co-Chief Executive Officers Bill McDermott and Jim Hagemann Snabe -- with Plattner as an adviser -- have promised to restore SAP’s reputation as an innovator and quicken product delivery since taking the reins after the ouster of former CEO Leo Apotheker in February 2010. Hana shows SAP has the “intellectual capacity” to outpace competitors and persuade customers to buy its data-analysis software, Plattner said.
“For too long, we couldn’t answer the question of, ‘What does SAP do next?’” said Plattner, who co-founded Walldorf, Germany-based SAP in 1972. “I wanted to make SAP a happy company again and get customers saying good things about us.”
Siemens AG (SIE), Exxon Mobil Corp., Wal-Mart Stores Inc. and about 170,000 other companies use SAP’s enterprise resource planning, or ERP, software to order goods, plan inventory levels and manage sales. SAP is trying to persuade these companies to also buy its new data-analysis and mobile-computing software that works with its Business Suite ERP product.
SAP has been seeking ways to branch out as more software is delivered over the Internet as a service, rather than residing on users’ own computers, and its co-CEOs have promised a more aggressive approach to acquisitions. The company bought Sybase Inc. for $5.3 billion in July to buttress its ability to deliver data to mobile devices such as smartphones and tablets like Apple Inc.’s iPad.
“At a fundamental level, their core business is still selling on-premises ERP,” said Pat Walravens, a San Francisco- based analyst at JMP Securities, referring to ERP software that runs on a company’s own computers. Walravens, who has a “market underperform” rating on SAP, said the company needs to move more aggressively toward selling Web software to larger companies.
SAP reported a smaller-than-estimated rise in first-quarter profit last month because of costs related to the Sybase acquisition. Analysts surveyed by Bloomberg on average predict SAP’s sales will rise 20 percent to $19.9 billion this year.
SAP’s American depositary receipts rose 89 cents to $64.08 at 4 p.m. on the New York Stock Exchange. The shares have gained 27 percent this year.
Oracle, International Business Machines Corp. and other software makers are angling for business in the growing market for programs to analyze the reams of financial and scientific data that companies produce. Ken Glueck, an Oracle spokesman, declined to comment on SAP’s contracts or plans for selling the software.
Hana software, which will be released on June 20, is being developed by a team of about 400 engineers working under Vishal Sikka, SAP’s executive board member for technology and innovation. The company has been testing the software since December. Several large businesses in the San Francisco Bay Area are running Hana to analyze data generated by Oracle’s application and database software, said Plattner, 67.
‘This Is Impossible’
Plattner and Sikka, 43, who spoke together in an interview on SAP’s California campus overlooking the Palo Alto hills, will outline plans for the technology behind Hana in a May 18 keynote address at Sapphire. The software can hold hundreds of millions of records in a computer’s memory, leading to much faster processing times than if they were housed on disk drives.
“Four years ago, a normal ERP developer in SAP, Oracle or Microsoft would have said, ‘This is impossible, you can’t do this,’” said Plattner. Coca-Cola is using the software to analyze sales and profitability data, he said.
Colgate-Palmolive Co. (CL), Unilever NV, Lenovo Group Ltd. and Centrica Plc are also among more than 50 Hana customers. Over time, Hana will underpin Business Suite software, as well as SAP’s Business ByDesign Web software for smaller companies, Plattner said.
“It has the potential to be transformative in the software industry,” Jim Shepherd, an analyst at market-research firm Gartner Inc., said of the so-called in-memory approach, which can reduce the amount of time it takes to analyze years’ worth of business data.
Because of its novel approach, SAP hasn’t landed large numbers of customers, Shepherd said. Not many companies think they need the speed, he said.
“It’s probably off the radar of most customers at this point,” Shepherd said. “This is not an area where people experiment.”
Plattner said the new technology will need some salesmanship. One German customer was skeptical about speeding up its analysis by a factor of 20, he said.
“Twenty times is so far out that people say they’re scared,” Plattner said.
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