SAP Leverages HANA: Announces Cloud Based HANA Powered Management Apps

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SAP's ( SAP ) in-memory analytics HANA has been a key revenue driver in the past quarter and the enterprise software maker plans to further this line with HANA powered management apps on the cloud. HANA is a platform on which analytics applications can be built to process large amounts of data faster than the current systems. Its in-memory computing is the key innovation and data can be processed at a much faster rate and it is cheaper to run as it can be ported onto inexpensive standard hardware.

SAP has already announced that it is targeting revenue from HANA to be at least Euro 320 million ($422 million) for 2012. SAP is now set to unveil a line of cloud-based EPM (enterprise performance management) applications that run on top of the HANA platform. Pricing for apps will be on a subscription basis and will depend on the complexity of the management app and the customer's size. We expect HANA to be a big growth opportunity for SAP.


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The cloud based management apps such as EPM OnDemand, include capabilities to investigate and fix errors related to expenses. It allows for real-time analysis of P&L and capital project planning. The company expects to release more products in the future with a design focus on smartphones and tablets. EPM Unwired, is one such app, and is a mobile client that will serve as a launch pad for all of SAP's EPM software. It is written in HTML5 in order to leverage native capabilities of the device it is deployed in with the first run releasing for the iOS platform. The focus on mobility is to cater to the sales-force which is always on the move and for professionals such as retail managers who spend a lot of time away from their desks and could access all relevant information from mobile phones and tablets.

Cloud, Mobile and HANA to drive 2012

The cloud business will see early adoption by small and medium size businesses as the SaaS model makes it cheaper to adopt and deployment on the cloud makes it easy to integrate. The absence of legacy ERP and CRM systems makes the cloud model more viable as there are no integration issues. Larger businesses would take much longer to fully move to the cloud as this would involve migrating legacy systems. So we can expect revenues coming in from large businesses in the longer run and revenues are likely to be exponential. Large businesses prefer to keep a mix of both systems, with critical systems still being maintained in house and not on the cloud. The mobile services are likely to be driven by the bring-your-own-device movement as employees demand access to business data on their mobile devices and there is a large opportunity to tap the existing customer base.

We currently have a $73 Trefis Price Estimate for SAP which is about 10 percent more than the current market rate.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks , US Markets

Referenced Stocks: CRM , HPQ , IBM , ORCL , SAP

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