<

Must-know: SAP AG's 2Q14 earnings review

Part 10
Must-know: SAP AG's 2Q14 earnings review (Part 10 of 12)

Must-know: SAP is positioned for a “big data” revolution

SAP and a “big data” revolution

“Big data” is everywhere. Rapid growth in websites, social media services, sensors, mobile devices, and other sources have generated large amounts of data. Most of the data is unstructured. This data is referred to as “big data.” As a result, the current business environment requires applications that are simple to implement. They provide insights from the data in real time in a secure environment. In response to this, SAP (SAP) has announced the expansion of its “big data” offerings that revolve around “HANA,” “big data” enabled applications, and data science.

Big dataEnlarge Graph

The previous chart shows the huge opportunities that come from the collaboration of the in-memory database and “big data” market. According to the International Data Corporation (or IDC), analytics and “big data” solutions are going to provide revenues worth $220 billion to SAP partners in the next five years.

Tackling “big data” with SAP HANA

In response to the rising data and the need for faster applications, SAP developed a main data management system that leverages main memory for storage. It’s capable of delivering applications with the necessary fast speed. This is different from the traditional database system that stores data on persistent media.

SAP developed HANA—its proprietary in memory technology that boosts the speed of business intelligence applications to near real time. Through HANA, SAP delivered crucial insights to react faster to the changing market scenario. SAP HANA’s success and widespread adoption is evident from the increase in SAP’s customer base. It has crossed the 3,600 mark since HANA was first launched in 2010. SAP has now integrated HANA into its software portfolio.

Partnerships

SAP entered into an agreement with Intel (INTC) and Hortonworks to sell and support Apache Hadoop distributions and data platforms with HANA. Hadoop is the open source framework for large scale data processing.

Specialized applications for “big data” use

SAP launched Demand Signal Management (or DSiM) for manufacturers that focus on capturing and crunching “downstream demand” data, like retail point-of-sale systems. It provides insights that are useful for marketing teams and supply chain managers to operate more effectively and efficiently. Other applications include the SAP Fraud Management analytic application and the SAP Customer Engagement Intelligence solution.

SAP created the “Data Science Organization.” It will be comprised of data scientists and qualified mathematicians. It will be working closely in alignment with SAP’s “big data” strategy. It will develop a portfolio of patents and intellectual property for its applications.

Increasing competition in the in-memory analytics space

Microsoft (MSFT), Oracle (ORCL)—with its Exadata offering—and IBM (IBM)—with its in-memory database called Blu—are rapidly capturing in-memory space. The in-memory analytics space is seeing a lot of competition. This makes it harder for SAP to increase its customer base.

The Realist Discussions