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Will In-Memory Databases Change Your Business?

Posted By David Brousell, January 14, 2013 at 1:30 PM, in Category: Transformative Technologies

Can in-memory database technology, which enables faster processing of software applications such as financials, analytics, and even MRP, transform your business and create new competitive advantages?

That’s the expectation raised by applications giant SAP. The company is not only touting its HANA in-memory technology as a “breakthrough innovation” that transforms the performance of software and moves businesses closer to operating in real-time, but also says it is the key to SAP’s own “intellectual renewal.”

Last week, SAP announced the availability of its Business Suite, used by 40,000 companies, including many manufacturers, on HANA. The in-memory database, the brainchild of SAP co-founder and Supervisory Board Chairman Hasso Plattner, was introduced by SAP in December 2010 after several years of development, and made generally available in June 2011.

In-memory database technology, however, isn’t all that new. Computer scientists have been working on the technology since the late 1980s, and a number of companies have introduced related products over the years. Oracle, SAP’s chief applications rival, acquired an in-memory technology company in 2005. Last week, Oracle announced the availability of a new release of the application-tier product, which is called Oracle TimesTen In-Memory Database.

But SAP claims that its HANA product incorporates advances—particularly in removing the distinction between OLTP and OLAP in the database and in how it has optimized complex logic using multi-threading techniques—that now make in-memory technology a game-changer.

“I am sure that this is as big a change as the introduction of R/3 [SAP’s groundbreaking ERP system] 20 years ago,” Plattner said at a press conference last week.

SAP claims that HANA, in conjunction with Business Suite, will reduce IT costs, eliminate batch programs, enable processing of analytic programs 10 to 1,000 times faster, and will dramatically simplify companies’ IT landscapes.

In a demo at last week’s press conference, for example, an MRP run that was said to have taken an hour under standard processing parameters, was accomplished in 7.2 seconds using HANA. “This takes us closer to the world of just-in-time planning,” said Vishal Sikka, a member of SAP’s Executive Board.

Moreover, Sikka claimed that the significance of HANA, beyond the gains in processing speeds it provides, is that it will enable companies to re-invent their business processes.

One company that appears to be attracted by this possibility is Deere & Co., the agricultural equipment manufacturer based in Moline, IL. Deere has undertaken a global growth strategy focused on the BRIC countries and is attempting, said Derek Dyer, the company’s director of global SAP services, to transform to a “solutions” company.

He said that Deere started with HANA about a year ago, undertaking a proof-of-concept project with its ERP system on HANA. Deere was able to simulate its financial closing within minutes, he said.

“We’re excited about the high performance, and also excited, even anxious, to do new things,” Dyer said at the press conference. “We wanted real-time data and HANA gave it to us. This was really the ‘wow’ we were seeking.”

Dyer added, “We consider this major innovation from SAP as a new way to manage our business by revolutionizing the way we introduce new products and services to the market, drive critical processes…such as material requirements planning in real time, and even explore a new world where predictive maintenance becomes possible.”

In his remarks at the press conference, Plattner indicated that SAP needs HANA as much as its customers do. He said that before HANA, SAP had been receiving complaints from customers about how long it took the SAP system to run; one application, which he didn’t specify, required 67 hours to process. Now, with HANA, he said, “I’m very happy to see a good future for SAP for the next five to 10 years.”

For SAP’s customers, many of whom run the SAP system on Oracle or IBM databases, the big questions they will have to answer involve whether to consider HANA in the first place, and, if so, when and how to migrate to the new database. That will not be a trivial exercise, particularly for large companies with huge stores of data.

SAP says it will continue to support whatever database its customers choose, and that it will continue to work with third-party database companies to provide innovation, including in-memory optimizations.

Nevertheless, the key question for many SAP customers will be what level of confidence they have in this relatively new technology’s capabilities and track record, and its ability to handle their particular requirements.

How would you assess the risk of migrating your database to an in-memory technology such as HANA?



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Written by David Brousell

Global Vice President, General Manager and Editorial Director of the Manufacturing Leadership Council



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