Editor’s note: Allan Krans is Cloud & Software Principal Analyst at Technology Business Research.
HAMPTON, N.H. – The introduction of SAP Data Hub is a continuation of a strategy that has worked well for SAP.
While other traditional software providers have struggled to maintain legacy license- and maintenance-based business and to offer new cloud-based alternatives, SAP has experienced relative success on both fronts. The key is a strategy focused on data and analytics and bringing an expanded set of capabilities to customers.
It started with the acquisition of Sybase and the introduction of HANA, both of which positioned SAP to be more than just an applications provider.
The introduction of SAP Data Hub will not have a profound impact on the market in the short term, but its impact could become more significant in the next three to five years. The critical element of SAP Data Hub is the positioning of SAP as the platform of choice for the management of and flow of information between customers’ disparate data stores.
No longer will SAP’s data analytics tools be used for only SAP application or database information; they can now be used to draw insight and value from sources that cross vendors, delivery methods and locations. SAP has seen strong revenue growth from analyzing the minority of data generated and residing in its systems, and with this introduction the company can vastly expand the data to which customers can apply the SAP tool set.
While SAP has long been a central system of record for transactional data, unstructured data and the growth of third-party data sources have changed the landscape for most customers. A myriad factors will influence the degree to which SAP Data Hub becomes the central point of data management and analysis, but the introduction positions SAP to have a much larger role in customers’ data management and analytics environments.
SAP Data Hub was introduced during an in-person event at SAP’s new Hudson Yards office in New York. Though the event was also streamed live, those watching online missed out on one of the most striking aspects of the introduction: the physical office space and the stunning views of Manhattan and the Hudson River from SAP’s space on the 52nd floor of the building.
It was clearly built with customers in mind, and before and after the event customers, analysts and executives took full advantage of the picture-perfect backgrounds for selfies and group photos from the spacious outdoor patio. Streaming the New York activities to SAP TechEd attendees in Las Vegas, as well as streaming updates from Las Vegas back to New York, mimicked the virtual connection capabilities of SAP Data Hub.
The logistics reinforced the value proposition of connecting data and content across disparate locations. Despite the overlap with SAP TechEd, numerous high-profile executives were in attendance in New York, including:
CEO Bill McDermott
Head of Database and Data Management Irfan Khan
Head of SAP P&I Big Data Franz Faerber
President of Database and Data Management Greg McStravick
Senior Vice President of P&I Big Data Andreas Wesselmann
Impact and opportunities
With SAP Data Hub, SAP is planting a big stake, hoping to address a distinct problem for customers. The exciting part about this announcement is that while the concept undoubtedly holds great value, the specifics about how, when and for what activities SAP Data Hub will be used by customers remain undetermined.
On the positive side, the problem of distributed data, which is difficult to connect and derive value from, is widely felt by customers across the board, regardless of size, vertical or location.
The pain point is being exacerbated as more customers find themselves in a hybrid environment, which can include their data centers and multiple cloud services, further fragmenting the data landscape.
In a one-on-one briefing with Wesselmann following the announcement, it was clear SAP is learning alongside early customers to determine use cases, best practices and the ultimate value proposition SAP Data Hub can provide. Wesselmann said SAP was somewhat surprised by the diversity of deployment models used by early customers, as customers are taking advantage of the ability to deploy the service on premises or via a cloud subscription-based model. SAP will initially monetize the new SAP Data Hub service by charging customers based on the amount of data being managed and by charging for HANA analytics capabilities.
However, TBR believes additional business models supported by partner-developed services and through establishment of a data marketplace capability could be developed over time. Like the eventual best practices for how customers will use the offering, those business models will evolve along with the maturity of the offering.