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At this year’s annual SAP user conference, SAPPHIRE, the technology giant showed advances in its cloud and in-memory computing efforts. It has completed the migration of its conventional VR_2012_TechAward_Winner_Logoapplication suite and portfolio of tools to operate on SAP HANA, its in-memory computing platform, and made improvements in its cloud computing environment, SAP HANA Enterprise Cloud. The last time I analyzed SAP HANA was when it won our firm’s 2012 Overall IT Technology Innovation Award. Now HANA has been transitioned from just a database technology into a broad platform. SAP wisely consolidated its efforts previously known as SAP NetWeaver into SAP HANA. This resolves some confusion regarding HANA and NetWeaver in the cloud, which I assessed. The recently announced SAP HANA Platform now provides the enterprise class of HANA implementation in the cloud. It comes with a trial edition of the data and visual discovery technology now called SAP Lumira, whose price has been reduced to encourage adoption (and which I discuss more below). The use of in-memory databases for big data is accelerating: According to our technology innovation research, 22 percent of organizations are planning to use this technology over the next two years, and through 2015 it will have a higher growth rate than other approaches.

SAP HANA is gaining functionality as a platform and has made an important step forward with its service pack 6. This new release expands integration of the technology into data across its applications and systems. HANA now has virtualized access to data in vr_predanalytics_benifits_of_predictive_analyticsHadoop and a range of other databases along with supporting the necessary data integration. Integrated with Sybase SQL Anywhere, HANA enhances mobile use of that technology; it also works with Sybase ESP to integrate event streams and machine data, and with Sybase Replication Server to connect with Sybase ASE and other databases. HANA’s increased spatial processing capacity handles this type of data, which then can be accessed by tools and applications. Our latest research into location analytics finds new applicability for this across business processes and our next-generation business intelligence research reveals that applying location-based analytics is important to 40 percent of organizations. The latest version of HANA has advanced data modeling capabilities through SAP HANA Studio to make it easier to use data and build a range of business models including predictive ones. Majorities of research participants said that such capability through predictive analytics provides a competitive advantage (68%) and new revenue opportunities (55%).

SAP supports text or natural-language processing needs. At some point I hope it enables HANA to dynamically create text as a result of its analytics; that could communicate better with people than just showing charts and data. This capability already is available in the workforce analytics products of SuccessFactors, whose Headlines technology won our 2012 Overall Business Innovation Technology Innovation Award; however, that does not yet seem to be part of SAP HANA and other applications, which could be a business benefit and product differentiator.

SAP also is expanding its software partner ecosystem to spread use of HANA with a range of applications. An early example is Tagetik, whichprovides its financial application suite on HANA for in-memory computing. SAP also announced recognition of innovative SAP HANA based applications including Warwick Analytics and Semantic Visions that are well worth examining. SAP also is adding integration points with other network storage, data center integration and even business intelligence and analytics. To this point, however, not many vendors are certified on SAP HANA, and my inquiries with various software company executives found they have more work to do and are not getting strong support from SAP to streamline the process to become certified. Elsewhere in its technology ecosystem, SAP announced further cooperation with HP in what is called Project Kraken to create an appliance with 16 processors and 12 terabytes of memory, designed to operate SAP HANA effectively for any range of analytical and transactional needs. Success of this computing appliance is equally important to HP, which is in a do-or die-battle against IBM and Oracle who are advancing in this area. At the same time SAP’s one-time partner Teradata has a competitive approach, whose recent advances in in-memory computing with its new intelligent memory and appliance that I assessed is well worth examining.

HANA is now part of SAP’s overall business intelligence strategy, as my colleague Tony Cosentino has pointed out. This is a positive step as the company works through the challenges of keeping a very large customer base happy as it moves its product line into the future. One of its key points for its future is the newly announced SAP Lumira, which was previously known as SAP Visual Intelligence, a more self-explanatory product name for the intended audience that is engaged in business analytics or even big data analytics. SAP Lumira is really the new face of its business intelligence products whether on-premises or in the cloud; it meets a need for discovery technology, which I outlined and is important to the future of business analytics. This was challenged by partners MicroStrategy and Tableau who were demonstrating their approaches at SAPPHIRE showing its competitive approach and how it can make good use of data from SAP and inevitably SAP HANA as they work through integration of the technology. Our research into technology innovation found that data and visual discovery is not available to 19 percent of organizations, ranking third behind the most unavailable predictive analytics (27%). SAP Lumira interoperates with other SAP products along with supporting Microsoft Excel spreadsheets. SAP also has released SAP BusinessObjects 4.1 with improved access to Hadoop through MapReduce and Hive, and also to Oracle’s Exadata and Essbase technologies. A new edition of SAP Crystal Server and Edge edition furthers support of BI for small and midsize businesses (SMB). SAP continues to have fierce competition in IT departments for BI and to overcome it is working to help business analysts and management use business analytics.

In the realm of business applications, SAP has fulfilled its promise to make HANA the underlying platform across on-premises deployments and the cloud. Its SAP Business One application suite version 9 is designed for SMB and runs with HANA and even Microsoft SQL Server. Simultaneously, the SAP Business Suite is now available on SAP HANAAs my colleague Robert Kugel explained, that makes it possible for customers to avoid using Microsoft or Oracle database technology and take advantage of new technology and applications built on HANA. Examples of this are SAP’s release of its fraud management application on HANA, which Robert assessed, as he did for advances in its EPM portfolio for finance. A word of caution here: Companies that use SAP’s applications on third-party databases have to be careful as the license in most cases only allows for application-specific access to the database, limiting the potential of other business uses. The range of new applications and tools running on HANA is steadily increasing as partners make progress adapting to it; SAP’s digital marketplace dedicated to HANA shows what is available.

SAP is so bullish on its ability to design consumer-friendlyUntitled applications that it also announced efforts to bring that quality into the enterprise through the SAP Fiori apps for common business functions; it also has simplified the user experience of its applications. This is nothing new for SAP which has long emphasized usability and made improvements in a continuous improvement cycle. SAP has invested significantly into the user experience and created AppHaus to build demonstrations of the latest advances. Even so, after looking at the range of new applications, I think SAP still has to improve upon the user experience and design of the applications. SAP is heading in the right direction, but it ought to build an application assembly and design environment that the teams at SAP, and its customers and partners, all can use to build people-centric applications, especially for use on the Web and mobile devices. I got to test applications that demonstrate user experience advancements, but they all were custom-built, and I saw others with primitive user interfaces for business applications; these fall short in trying to engage users across a range of experience and facilitate the natural collaborative aspects of their responsibilities. Those aspects are critical, as our research across every line of business finds usability to be the top evaluation category for software evaluation, and it was the top criterion in 64 percent of all organizations. My analysis suggests that SAP needs to consider the critical aspects of personalization based on role, responsibility and experience and adapt the user experience to them. As well, less can be more when presenting information for the majority of business purposes, and guiding individuals to what is relevant is more important that piling up charts or information on the screen.

Separately from its HANA efforts, SAP has advanced enterprise-class readiness for mobile technology, has outlined a comprehensive mobility framework and deepened support for security through a partnership with Mocana for any applications that embrace SAP’s mobile portfolio and technology. This addresses an evident need, as our technology innovation research into mobile technology finds the top barrier to business deployment is security and risk issues, found in 47 percent of organizations. SAP has to also consider in the world of BYOD the preference for native platforms (39%) over the Web or HTML5 (33%), along with no preference (20%); it won’t be easy for SAP to make everyone happy, especially when half of individuals have a distinct preference for their type of smartphone or tablet. Our research finds fewer than one-third (32%) of people satisfied with their organization’s mobile access to applications and information. I did not hear much about SAP HANA in the company’s mobile strategy except that it powers tools and applications that operate on a smartphone or tablet. But overall SAP is investing more into advancing mobile technology than other technology suppliers, and its potential is yet to be realized as business and IT begin a transformation to mobile readiness.

Since my analysis after last year’s SAPPHIRE SAP has brought to reality its cloud computing strategy with products that are now available. I thought that more could have been highlighted in SAP’s sustainability efforts in including its software, for which last year vr_bti_br_access_preferences_for_innovative_technologieswe provided a 2012 Leadership Award to its customer Danone for its use of SAP products. I was more surprised that SAP was rather quiet about its efforts in business and social collaboration as it works to transform its technology by embedding the Jam product in its software. SAP is working to ensure its products are simple but sophisticated, available on any platform or device and localized to any country in the world – and that they operate on SAP HANA. It is also working to deliver faster methods to onboard and experience its software through rapid deployment. SAP’s focus is to inject the technology innovations into its platform and applications while also supporting what our technology innovation research finds is the desire for a variety of access methods: on-premises, on-demand and hosted approaches that are distributing quite rapidly. It is clear that organizations want choice in how they access technology and applications; SAP is prepared to address this as it enters a new era of opportunity built on SAP HANA.

Regards,

Mark Smith

CEO & Chief Research Officer

Just when it seemed that Hewlett-Packard’s new management team led by CEO Leo Apotheker had a growing and solidifying technology agenda that included mobile computing, yesterday it all changed.

In a sudden move accompanied by a flurry of communications, HP shut down its fledgling efforts around webOS, the TouchPad tablet and the Pre smartphone that developed from its acquisition of Palm. All this year HP had invested heavily and promoted loudly the webOS technology, promising the industry and customers that it would be a major player in mobility. I thought that the company had a good opportunity, but its plan and execution were anything but spectacular. This bombshell was communicated as a side note to HP’s lower-than-expected third-quarter 2011 financial results and was widely interpreted by the business and consumer media as a failure for HP. It was becoming clear that the market did not support HP’s mobile products and maybe its underlying technology but not because the technology was inferior. HP also announced it is “exploring strategic alternatives for the Personal Systems Group,” rumored to be a spin-off of the PC division into a separate company; based on the industry shift to mobile computing that is probably a good idea.

I think the shutdown of its mobility efforts is bad for the industry. Although the market is consolidating around Apple and Android with Google’s intent to acquire Motorola Mobility, there still could be room for a strong third player. Microsoft has stumbled with continuous changes and its dubious partnering with Nokia, and RIM is experiencing declining BlackBerry sales and customer commitments. But maybe HP saw playing for third place as too costly an investment. I observed back in March (See: “HP’s New World Order according to Leo Apotheker”) that HP’s new generation of products would face challenges. No matter how good or fast the technology is, that alone will not make a market, and mobility requires a completely different approach and team than HP had. For example, HP recently communicated that webOS runs faster than Apple’s iOS on the iPad, but does it really matter? My analysis shows that HP just pushed the mobile inventory into its channel and spent a lot on advertising while hoping for growth. That did not work; neither the consumer nor the business market embraced the products readily, and sales were so low the company was forced to make some drastic decisions.

In a last attempt to increase sales of the TouchPad HP lowered the price sharply, rumored to be coming out with a midsize tablet and did even more advertising. In fact I just saw a commercial last night as the media burns through what it was paid to promote. But price alone was not the problem; a mixed strategy for both consumers and business didn’t set up either for success. HP also was slow and awkward in trying to enlist a strong application developer ecosystem. In almost all cases it did not actively engage with business applications providers to convince them to adapt their native iOS applications or new mobile development to webOS. As a result, the software community and customers took a wait-and-see approach. Most of my sources across software providers quietly indicated they would just build HTML5-compatible applications to work on the TouchPad as they are on Android and other mobile devices. This approach does not take into account the unique aspects of the technology and would leave HP without an ecosystem of native applications, thus relegating it to a commodity play with dozens of other tablets. I spent significant time reviewing mobile applications and tools on smartphones and tablets and could not find any strong reason to choose HP’s. This was confirmed by the lackluster marketing and partnering in the software market on the HP website and by dialogue with executives who had released applications on other mobile platforms. If HP had spent some of its advertising budget on its digital marketing and community development, it might have gotten much better results. Now it has to pull off a PR miracle to keep its large channel suppliers like Best Buy and others that are demanding HP take back its now-stale inventory that they cannot honestly sell to customers. It will be interesting to see if Best Buy and others offer trade-in value for an Android tablet or Apple iPad; if I had bought a TouchPad from a retailer, I would demand it.

So now HP plans to invest further into enterprise software position and announced its intent to acquire Autonomy. This move has definite value since HP already has a software business in this area and some synergy with its IT operations and management software. Autonomy expanded beyond its roots in search into a range of information access and governance technologies, creating what I would call an information platform that can be used for a range of information applications, which our benchmark research shows are growing in demand by businesses. In fact the market is significant enough that our firm created a new category called information applications to track its growth. So far Autonomy has operated its organizations in a fragmented way, missing out in presenting a more unified approach to its enterprise customers. It has overlapping products with HP in records management and discovery for regulatory and compliance processes, so there will have to be a sorting out of product lines if the merger goes through.

This raises the question of whether HP can integrate Autonomy with the rest of its software operations; it has not done any sizable software acquisitions since Mercury Interactive some years ago. Although Leo Apotheker and other SAP veterans he has brought in have experience in integrating acquisitions, HP is a different company at a different time. Its challenge is to get on the short list of CIOs with its enterprise software portfolio, and with fierce competition from IBM, Oracle and SAP that could prove difficult. My inside sources at HP still indicate that the acquisition of Vertica and its data appliances is not generating ROI at expected rates. There HP faces Teradata’s competition and other challenges from the growing big-data technology Hadoop that has begun to even challenge Oracle’s stature in the database market. My colleague David Menninger’s recent benchmark research on Hadoop and information management shows Hadoop is a viable option for new data management projects in IT. HP will continue to find challenges in growing its data and appliance business without further acquisitions. The question will be whether further investment into recently acquired Vertica but is it worth the risk since it could fall the way of its predecessor HP Neoview (See: “HP Gives Up on Business Intelligence and Analytics Markets”) since HP demands surely must want larger growth to succeed in this market. We have yet to hear HP explain how it can take a significant part of the growing business analytics market that our extensive research has found to be quite sizable, even though HP has plenty of technology assets here. So far IBM and SAP on a global scale have been capitalizing on analytics, and Oracle is beginning to see that just pushing the database and middleware will not appeal to the business buyers of analytics. There are many skeptics in the industry regarding whether it is worth the risk to join HP in its efforts in this area; HP should remember that the most important element of gaining growth in an established market is people with a passion for their products. I have not seen a lot of that in HP with all of the changes and pressure for revenue growth with significant cost controls.

All of these dramatic changes to its technology portfolio that reverse its commitments have produced significant uncertainty about HP’s direction, not just in the financial markets but also in its employees, partners and customers. Confidence in purchasing from HP is undermined by the last year of reversals. Its communications since the beginning of the year have been haphazard and do not build trust for making decisions on its technology. In addition HP continues to operate in a fairly closed environment in terms of interacting with the industry, and it shows no sign of changes to participate in a more open dialogue like others in the technology sector. HP actually wanted me to pay them to gain access to their recent set of presentations for HP Discover for example which was quite hilarious.

Having cut off its investments in the mobility technology market, HP should not assume that it can prosper in the enterprise software market just by relying on the experience its management team has from other companies including SAP. Without further acquisitions to acquire customers, technology and people with expertise, HP can expect heavy criticism. It also must prove to be trustworthy in its communications and demonstrate solid growth in its refocused software business strategy. For those considering anything other than printers from HP, let the buyer beware until the company can re-establish trust and improve communications to the market. It remains to be seen whether trading the so recently favored webOS and the TouchPad for Autonomy and a commitment to enterprise software will play well with its customers. I advise you to wait and see whether you can trust HP for your business; maybe you should ask for a guarantee in money and time invested so you don’t wind up with legacy technology right after you purchase it.

Regards,

Mark Smith – CEO & Chief Research Officer

Mark Smith – Twitter

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