One of the vexing issues of “Big Data” is that there is very little consensus on what, exactly, big data is. Kicking off his keynote at the SAPinsider conference for BI, mobility, cloud, and administration professionals, SAP data head Steve Lucas confronted the issue head-on. A few weeks ago, he solicited input from his Twitter following in an attempt to distill a standard definition of “big data.” The attempt failed.
Nevertheless, Lucas says the proliferation of information of both structured (stored in a database) and unstructured (emails, internet postings, etc.) data is an issue that affects SAP customers already. “I firmly believe that big data is no longer a trend that can be ignored,” he said.
Not only must big data be acknowledged, Lucas argues, but it must be seen as the foundation for all future innovation in business intelligence, analytics, mobility, cloud computing, and administration. To gain traction or competitive advantage in those areas requires a firm understanding of the impact of big data.
Furthermore, haggling over the definition of big data is largely irrelevant to the business challenges of present-day enterprises. Every business must now confront the “three V’s” of data: Volume (how much do you have?), Velocity (how quickly do you need to do something with it?), and Variety (what kinds of data are included in your total volume?).
Lucas’s co-presenter Timo Elliott — one of the first employees at Business Objects — added a fourth “V” to the list: Validity (how “true” is your data?).
Once these questions are addressed, organizations can begin the process of solving real-world challenges by harnessing their data and extracting the right information out of it. This is where SAP makes its case as the practical alternative to open source big data projects such as Hadoop, MapReduce, Hbase, Kafka, and others. Each open source option is created and maintained by different groups with different standards. The solutions themselves are rarely designed to integrate or communicate with standard business IT infrastructures, making them an unwieldy choice for businesses wrestling with data challenges.
“One thing I’m not seeing from open source is business applications running on top of these solutions,” says Lucas.
By contrast, SAP has already launched several business applications Lucas says demonstrate the power of integrating business applications into a big data framework. FreshDirect, a New York-based online grocery delivery business, migrated from outmoded SQL queries to SAP BusinessObjects solutions in order to track complex events (such as a delivery truck falling behind schedule due to traffic) in near real-time. Now, FreshDirect knows when a truck is going to be late, and can send a back-up delivery truck to avoid major challenges. The ability to process, analyze, and act on huge volumes of real time data allowed FreshDirect to improve its on-time delivery rate from 91% to 99%, says Elliot.
“Someone told me they also saved $2 million a year in parking tickets,” adds Lucas.
Implications for mobility, cloud computing, and administration
The defining aspect of the age of big data is that as data volumes grow, the screens on which we consume data shrink. iPads, iPhones, Androids, and other mobile devices have forever changed the landscape of enterprise mobility. SAP positions itself at the intersection of these opposing forces – a conduit from raw data to small-screen context. Lucas argues that time is right for a single solution framework to translate billions of bytes into 360 pixels on a smartphone screen.
Organizations will quickly realize realize the value of employing a dedicated framework to managing the wide span of an organization’s data, from capture to delivery, says Lucas. From there, they can apply proven practices to getting the right information out of their data.
“The fundamentals of needing to get access to data haven’t changed. But I believe we have an opportunity to consolidate our approach,” he says.
Predictions loathe hindsight. They jump boldly into the world, arms outstretched and dressed in silk, but grow increasingly naked and self-conscious as time moves on and reality sets in. Take a look at some enterprise software predictions for 2011 and you’ll see what I mean. Remember when Microsoft was going to buy SAP?
It’s not the predictions’ fault, really. A milquetoast prognostication is a prognostication ignored. To survive in the crushing vastness of digital space, a prediction has to be bold – whether that boldness is inspiring, threatening, or comforting. Whether it comes to pass is typically a secondary concern.
Still, there’s a certain nobility in the effort to illuminate the darkness ahead. Predictions help us envision a better world which we helped create; or avoid trouble spots on the road ahead. And they’re fun. And sometimes we even get them right.
Here are my predictions for 2012.
1. SAP professionals race against the machine In his new book Race Against the Machine, MIT professor Erik Brynjolfsson examines the impact of the digital revolution on employment. Prior technological advances, like robotics, primarily displaced unskilled labor such as assembly line workers. Accelerating advances in information technology have allowed companies to leverage machine labor for increasingly skilled work – reducing the need for humans in jobs that previously only humans could perform. While this has increased productivity dramatically, Brynjolfsson writes, it also has a serious impact on the professional world as a whole.
“As the digital revolution marches on, each successive doubling in power will increase the number of applications where it can affect work and employment. As a result, our skills and institutions will have to improve faster to keep up lest more and more of the labor force faces technological unemployment. We need to invent more ways to race, using machines, not against them,” Brynjolfsson wrote on his blog.
In other words: First they came for the farm workers, then they came for the factory workers, then they came for the accountants and business analysts. The way to survive the man/machine redundancy trap, according to Brynjolfsson, is to incubate a culture of entrepreneurialism to push the limits of innovation. At the macro level, all eyes are on SAP to help companies harness technological enhancements into innovative products. At the company level, this means SAP professionals need to think creatively about how to leverage the massive power of real-time analytics, business intelligence, and other cutting-edge technologies to add business value. Creativity is king.
2. SAP gets even more cloudy SAP’s acquisition of SuccessFactors, a cloud-based provider of human resources software, is an affirmation that SAP will attempt to meet its “on demand” strategy goals in part through acquisition. Gone are the days when SAP would rely solely on its own considerable stable of developers to innovate – the cloud is too expansive, too fast paced to compete against from behind.
Michael Fauscette of IDC says cloud vendors are on the brink of “rapid consolidation” by larger companies like SAP and Oracle. The economics are just too plain to ignore.
“Companies built around limited software offerings can blaze the trail but in the end, the enterprise software landscape is dominated by a few large vendors who will pick off successful innovators as the concepts gain traction and the market matures. This is the innovation cycle in today's enterprise software market,” Fauscette writes on Seeking Alpha.
I expect SAP to shore up key areas of focus in the cloud with at least one or two acquisitions in 2012, while maintaining its focus on improving and selling Business ByDesign – its flagship on-demand product.
3. Mass feline genocide After the SAPPHIRE conference in Orlando, Florida last year, John Appleby of Bluefin Solutions posted the below image on Twitter. It was his way of warning SAP against abusing hyperbole when discussing technological breakthroughs like HANA and embedded analytics.
I predict mass feline genocide as SAP continues to release the purpose-built, industry focused analytics packages it promised at SAPPHIRE last year, and companies latch on to the real value of having access to real-time analytics. What started with Colgate-Palmolive, Baker Hughes, and Celestica will spread to the rest of the SAP installed base rapidly. It won’t be easy, at that point, for SAP’s marketing/PR arm to restrain itself – even if it means the death of thousands of kittens.
4. Social enterprise buzz social social buzz buzz social
Like most industry watchers, I spend a lot of time on Twitter (see above). I derive an awful lot of professional value from the interactions, insights, and eavesdropping that takes place on the world’s most powerful social fire hose. Because the value of Twitter (and other social tools) is so self-evident to many, it wasn’t long before we all began to hold forth on how social media paradigms would fundamentally change the enterprise and how we do business. It’s all buzz all the time. A few weeks ago, there was even speculation that SAP would snap up Jive or another social-focused provider of collaboration software.
R “Ray” Wang, one of the smartest analysts out there, recently compiled a list of 43 use cases for enterprise social software, dividing them into three categories: analytics, internal collaboration, and external engagement. He predicts more use cases will emerge quickly as the trend toward consumerization of IT continues.
Ray makes a compelling case, and I think the top use cases cited in his research (service/support, PR/marketing, projects, and some HR activities) are likely to grow quickly at many enterprises. But I’m not convinced the enterprise world is ready for deep integration of social software into legacy IT processes. For one thing, CIOs and CEOs are holding fast on ROI as the economy limps along – a notoriously high hurdle for social software. Second, I’m not convinced that the adoption of consumer social platforms will have the same impact as smartphones and tablets — which are forcing enterprises to rethink the way they deliver business applications to users. Most SAP professionals I talk to during interviews and at conferences are, at most, light consumers of social media and I suspect that resistance to a forced march into social software would be met with significant resistance.
5. The mobility picture clears up When it comes to running business applications from mobile devices, the question isn’t whether it’s going to happen, but how. SAP paid an awful lot of money to bring Sybase into the fold — primarily for the company’s enterprise-ready mobile application development and device management platforms. SAP is coordinating its mobile strategy around Sybase Unwired Platform (SUP), guiding customers to choose the platform to develop and manage device-agnostic applications from a central platform — rather than trying to manage a raft of point solutions.
However, SAP has met some resistance from its own community. Developers have voiced displeasure at the price tag associated with SUP, and enterprise customers are just beginning to pin down specific use cases for mobile applications and draw up their basic strategies. I think the mobility picture for SAP customers will clear up considerably by this time next year, as savvy developers (from SAP and beyond) lay the foundation with a first generation of proven mobile applications and solution architectures.
Parting thought: It’s clichéd to be cynical at Christmas
In early 2008 I signed up for two different microblogging platforms: Twitter and Pownce.
Twitter was the originator of the rapid fire social networking platform. Pownce was founded by tech wunderkind Kevin Rose (of Digg fame) specifically to improve on what Twitter had started. Pownce offered several features Twitter did not, including discussion tracking, image uploads, and group contact lists.
But Twitter had already grabbed a few million users, many of whom were highly active technorati. By the end of 2008, Pownce was dead and Twitter was on its way to global stardom and exploding adoption. The ecosystem had spoken: Twitter was king.
Ecosystems are powerful growth engines, which is why big companies invest so much in their care and feeding. SAP has proven especially adept lately at nurturing its ecosystem of partners and users through initiatives like SAP EcoHub and the SAP Community Network.
Now SAP is expanding that effort to support its push into enterprise mobility. SAP knows well it can't develop every possible app for every business scenario, so it is attempting to foster an ecosystem of mobile app development similar to the iTunes Store from Apple. This article by in-house blogger Eric Lai goes into the strategy SAP is pursuing here.
"Even as SAP rushes to release more and more apps that connect with our applications, our goal is to have 80% of all mobile apps be built by partners," writes Lai.
Thus far partners have submitted more than 200 apps to SAP's Enterprise App Store, and more than 100 of those have been accepted. Enterprise app stores offer companies flexibility (you can pay by credit card or corporate invoice, for example) and the assurance that SAP has certified the validity of each app in the store, says Lai.
It's a sound strategy, and I imagine there will be no shortage of developers who would love to get their solutions in front of the large (and generally quite rich) SAP customer base.
However, there are some risks to SAP's overall approach. As Dennis Howlett has pointed out numerous times, the cost of developing an app to be certified on the Sybase Unwired Platform (SUP) is still higher than most small development shops would care to pay. He suggests SAP give away SUP licenses to developers to foster innovation.
"Apple managed to build a highly successful business by making the barriers to developers trivial. SAP is still trying to wean itself on the idea that everything has to come with a Veuve Cliquot price tag," Howlett writes.
It's hard to disagree. If SAP wants its mobile ecosystem to be growth engine, it will have to find a way to smooth the way for the little guy to make a big splash. Relying on a "top down" approach (as senior SAP executives told Howlett they were) may prove too limiting to spark the expansion of apps SAP is looking for.
To demonstrate my point, I created the following visualization of all the partner apps listed in the SAP Partner Mobility App Catalog. The small nodes are the apps themselves. The larger nodes are the companies that created them. As you can see, IBM and HP offer exactly as many apps as Movilitas Consulting and tieto. A year from now, I expect a vast majority of partner apps will have been created by companies you and I have never heard of.
(Click image for full-size)
SAP also plans to take 15% of all revenues generated from the app store (including from in-app purchases), according to Lai. I don't see this stopping any developers from bringing their apps to market, but it does reinforce Howlett's "Veuve Cliquot" dig from before.
An ecosystem will thrive only if the conditions are right. SAP has a lot of conditions in place already -- including an active partner community and an enterprise-class platform for mobile app development. Here's hoping the developer-focused strategy falls in line, too.
One would think that HANA and BI 4.0 would own the conversation at Reporting & Analytics 2011, but several conversations I've had with consultants and customers have circled back to something decidedly less sexy -- the long-awaited rise of SAP Solution Manager.
Firstly, SAP has updated the UI to make the user experience less daunting. One consultant I talked to said this enhancement was the most important thing SAP has done to encourage adoption. When I asked him if the enhancements were enough to encourage adoption on the business side, however, he grimaced. Baby steps, I suppose.
The next hurdle was to make Solution Manager capable of managing applications outside of SAP. Most SAP companies boast diverse landscapes and wouldn't be likely to adopt a help desk tool that only supports SAP. Version 7.1 includes the ability to support multiple applicatoins from a central location.
Of course, there are till several challenges that stand in the way of increased adoption. For one thing, despite the wide range of functions -- including non-technical ones -- that can be managed within Solution Manager, it is still primarily viewed as an IT tool, limiting its reach within most organizations.
Mobile device and application management is another area that complicates the adoption curve. The current version of Solution Manager was not originally designed to manage these types of tools, so centralizing those functions within Solution Manager is tricky. SAP sells Afaria from the Sybase portfolio to help customers manage mobile devices.
I'm at the combined SAPinsider Reporting & Analytics, Projects, and Outsourcing 2011 event in Las Vegas this week, where yesterday Sanjay Poonen of SAP laid out his company's strategy for supporting what he termed a revolution in business technology.
"We believe that analytics will be as big as ERP was for the last 30 or 40 years," said Poonen.
For the past few decades, companies have delivered business value by capturing increasingly massive quantities of transactional data into a central ERP system. The challenge for the next few decades is to extract insight from all that data.
SAP's approach is to build what Poonen calls an "information value chain" with dashboards at the tip of a large iceberg of data management applications and processes.
Poonen likened SAP's analytics strategy to an anatomy lesson, with Enterprise Information Management applications at the feet, supporting the rest of the structure. Business Intelligence is the heart of the body, while analytics is at the head. (Data, naturally, is in the stomach, feeding the entire enterprise).
The two lynchpins of SAP's analytics strategy are BI 4.0, the product suite of BI and analytics tools released in October 2011, and of course HANA. Poonen said SAP had discovered that for every $5 enterprise software spent on analytics, they spent $10 on transactional applications and $15 on data warehousing and storage. HANA is designed to help reduce customer spend in that third area by bringing the entire database into RAM, where it can be accessed 1,000 times faster than from a traditional database.
To help further drive HANA into the SAP customer base, SAP plans to announce a version of HANA that sits underneath SAP NetWeaver BusinessWarehouse -- allowing customers to leverage HANA with their existing data warehouse investments.