Toxic Hana

SAP Hana, a legacy of Professor Hasso Plattner

A recent article in the German magazine Der Spiegel by Tim Bartz and Christian Bergmann (available online for Spiegel subscribers here ) begins: "The billionaire's work is historic. His legacy is potentially poisonous. After more than 50 years, founder Hasso Plattner is leaving the software company SAP—Germany's only world-class technology giant. But what will become of the giant without its colorful founder?

Several question marks hover over the Hana database, which is becoming a growing liability for the ERP group: There is a copyright and intellectual property dispute with Terradata in the U.S.; there is the displeasure of SAP customers over needing to pay twice the licensing fees; and there are the high Hana fees for developing low-cost applications on the BTP (SAP Business Technology Platform).

The SAP Double Lottery or Parent Trap

"Das doppelte Lottchen", or The Parent Trap, is a children's novel by German author Erich Kästner (born February 23, 1899 in Dresden; died July 29, 1974 in Munich). There is a popular American adaptation of it that stars Lindsey Lohan. In brief, it is about two ten-year-old girls, Lotte Körner from Frankfurt (Germany) and Luise Palfy from Salzburg (Austria), who meet in the Salzkammergut region in Austria at Lake Wolfgang. They discover they are twins and that their parents separated years ago. They decide to swap places to get to know their parents better. At first, they manage to fool their parents—and so the game begins!

Whether SAP wanted to deceive customers with the Hana ERP database will probably never be answered. But the fact remains that SAP is making a good deal of money from Hana, and most SAP customers will have to pay double the database fees for a long time without any additional benefit to show for it.

AnyDB and SAP Hana

In previous SAP release upgrades, customers were able to keep their database. In many cases, only a version update at the ERP level was required. The database could be upgraded to a new version sooner or later.

With the migration to SAP S/4, however, customers must also use the Hana database. The ERP release change is now accompanied by a database change, which presents double the challenge for the SAP Basis team. CFO must also dig deep into their pockets because database fees for the previous ERP with AnyDB (Oracle, Microsoft or IBM) as well as Hana have to be paid during the entirety of the conversion period.

Even if an S/4 conversion can technically be carried out within a few weeks, the entire ERP release change can take up to several years to finish completely. During the S/4 conversion period, SAP customers have to operate and pay for the old ERP system (usually SAP Business Suite 7 with AnyDB) as well as S/4 Hana. However, there is no economic benefit from paying DB fees twice.

Unfortunate SAP DB optimization

In the end, it is a disastrous combination of ERP and database. So-called junkification is also a legal technique used when negotiating contracts or laws. The fact is a customer cannot have one without the other.

If a customer selects S/4, they must also select Linux as their operating system and Hana as their database. This benefits SAP in two ways: in addition to S/4 license revenue, there are now fees for Hana, and support becomes much easier for SAP. Instead of having to support multiple combinations, with many different operating systems, databases, and ERP versions, SAP now only has to support the tightly knit IT architecture consisting of Linux, Hana, and S/4.

SAP Hana's own goal

SAP is currently making a good deal of money with Hana, but it is not yet clear whether this will continue in the future. There are very interesting development concepts for Fiori apps on the SAP Business Technology Platform with CAP and RAP. In many cases, it is the obvious choice to use the Hana database for these applications, but this comes with additional and sometimes quite high DB fees. Inexpensive low-code application development suddenly becomes uneconomical due to the high license fees for Hana. In the short term, SAP makes a lot of money (see the stock price), but in the long term, Hana and S/4 may cause many SAP customers to rethink their approach.