Smashes SAP

SAP has never abandoned the hierarchical, strictly formal, three-tier client/server model of an R/3 with AnyDB and AnyOS, even though numerous applications have been bought in and a network has emerged from the ERP hierarchy as a result. SAP wants to capture this network of cloud and on-prem applications and integrate it into a hierarchical system on the Hana database platform.

With a lot of effort, sweat and blood, the integration has almost succeeded, but only almost. Market observers, who have been watching the activities of SAP CEO Christian Klein, his Chief Technology Officer Jürgen Müller and Chief Applications Officer Thomas Saueressig with a great deal of goodwill, are becoming increasingly skeptical: The dynamics of the digital transformation are causing the justified desire for integration to fade. 

The effort to integrate is a Sisyphean task: No sooner is application A integrated with B than cloud C comes around the corner and the whole process starts all over again. A microservices architecture and container management are designed from the start to integrate everything - come what may! And many more innovations will hit the SAP community.

SAP CEO Christian Klein is very keen and keeps emphasizing his success in consolidating the numerous cloud systems acquired by his predecessor, Bill McDermott. The priority, of course, is the integration of the many cloud acquisitions. Each app has its place. But in the SAP ERP world, they only have meaning if they are based on a common data model. The integration would ultimately be the added value by SAP.

The dominant theme of the past few years for the three board members Christian Klein, Jürgen Müller and Thomas Saueressig has been the integration of SAP's innovation on a common standard. The project has come a long way and is showing mediocre success, yet the question must be allowed: Is it still up to date? Computer science itself has been working for many years with microservices and containers to make large monolithic IT architectures manageable.

Ultimately, it is about the management of complex ERP landscapes. The digital transformation is continuously expanding the range of topics, so it is to be feared that Klein, Müller and Saueressig are too late with their efforts for final integration. The first cries are already being heard: Break up SAP! This does not refer to the company itself, but to its ERP architecture. 

Naturally, breaking up the S/4 monolith is a Herculean task - but it doesn't necessarily have to happen immediately and in a revolutionary and radical way. SAP could also dismantle, fillet and portion Hana and S/4. This could result in an S/5 based on AnyDB including Hana starting in 2030. Why not S/5 containers based on a graph database with a decentralized blockchain structure?

Break up SAP to rebuild it even better - sounds crazy and it probably is. But Christian Klein, Jürgen Müller and Thomas Saueressig are young enough to tackle this Herculean task, both in terms of time and intellect! In recent years, a number of corporations have reinvented themselves. If SAP doesn't do it, start-ups will. Celonis from Munich could use its knowledge of process mining to create a new ERP generation with machine learning and distributed databases (see blockchain).

Didn't the smaller car manufacturer Porsche once try to take over the big VW Group? The comparison is not serious because the Piëchs and Porsches were pulling the strings in the background at both groups. But it is conceivable that the SAP share price will continue to fall and Celonis will maintain its successful run. In 2030, the headline will read: Celonis buys SAP! So shortly before the finale, when all SAP's existing customers have finally completed Hana customizing and S/4 conversion, SAP will lose its independence.

At the beginning of this year, SAP, including the user association DSAG, was very miffed about the lese majeste: How contemporary is S/4? How dare E-3 magazine question Hana and S/4 in terms of contemporary utility and innovation? What both institutions overlooked: Whether S/4 is still contemporary is not so much a question at the start of customizing as it is when it goes live in a few years.

The current state of S/4 technology based on an in-memory computing database and cloud functionality is robust and sufficient. Greenfield S/4 Hana can be customized quickly, efficiently and successfully.

In a few years, S/4 and Hana technology may no longer be up to date. Break up SAP so that SAP's existing customers have a future. The ERP king is dead, long live the ERP king. From today's perspective, microservices, containers, blockchain, and machine learning would be an answer - even more important is that Christian Klein and his board members give up their insistence and start an open-ended ERP discussion: similar to what Professor Hasso Plattner once demonstrated at HPI in Potsdam, from which Hana and subsequently S/4 emerged many years ago.