SAP Co-CEO McDermott Talks Up HANA, Mobility and SaaS

SAP has seen software sales rebound steadily after a dip during the global recession, and is hoping to supercharge its business with forays into in-memory computing, SaaS (software as a service) and mobile applications, a business it entered with last year's acquisition of Sybase.

By Chris Kanaracus
Wed, July 27, 2011

IDG News Service — SAP has seen software sales rebound steadily after a dip during the global recession, and is hoping to supercharge its business with forays into in-memory computing, SaaS (software as a service) and mobile applications, a business it entered with last year's acquisition of Sybase.

While the bulk of SAP's revenues still come from its core business of on-premises ERP (enterprise resource planning) and BI (business intelligence) software, along with associated maintenance fees, it's betting that these new initiatives will transform the company. In an interview with Wednesday before a conference call on SAP's second-quarter earnings report, co-CEO Bill McDermott discussed how the vendor is no longer "the old SAP."

IDG News Service: You launched the HANA (high performance analytic appliance) at last year's Sapphire conference, and it became generally available in June. What's the largest HANA installation as of today? How many customers are in production?

I can only give you the names of customers that are letting us quote them. They include T-Mobile, Medtronic (MDT) and Colgate. We have 67 names that are somewhat referenceable. All of them are pretty significant installs. We've had the first HANA customer to order a second machine. About 35 customers are in production one way or another. HANA has the fastest-growing [sales] pipeline in the history of SAP.

IDGNS: Is HANA winning deals over products like Oracle's (ORCL) Exadata head-to-head? Oracle is planning to release an in-memory add-on for Exadata. How will you respond?

HANA is in its own category. It's not even fair to compare it to Exadata. [In terms of the in-memory add-on], they are entitled to their innovation cycle, but there's nothing to respond to unless they have a product that's on the market.

IDGNS: Business Objects 4.0, which you announced back in February, has overshot its original general availability date by months. Isn't this sort of delay a hallmark of the "old SAP," which historically had trouble releasing products on time?

I don't think there's too much that's symptomatic of the old SAP. We've released the biggest upgrade in Business Suite a month ahead of time. We took HANA from concept to release in 14 months. With Business Objects 4.0, there may be a few extra weeks in the ramp-up [period]. We don't look at that as a negative, we look at it as a positive. We think the customer wants us to make it perfect.

IDGNS: SAP has positioned the Business ByDesign SaaS suite both as a mainline system for midsized companies as well as something an enterprise could use in a new subsidiary, while tying it to a corporate ERP backbone. How are the 550 ByDesign customers so far split between those two scenarios?

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