At a recent SAP event in Vancouver, Canada, Stephanie Turner, manager and senior system engineer of Honda R&D Americas, demonstrates the use of SAP Digital Boardroom inside Honda’s Obeya Room in Raymond, Ohio, one of the most innovative auto design centers in the world.
Honda’s Obeya Room (which means War Room in Japanese) now positions the digital portal running SAP Analytics Cloud on a large touchscreen that displays an array of real-time datasets including divisional performance reporting and engineering drawings. Showing and interacting with Digital Boardroom as the front and center instrument panel helps support the auto maker’s team of designers and executives and their decision-making process for everything from new product development to safety improvement. Putting safety technologies first, Honda R&D facilities in Raymond sport the world’s highest resolution crash test barriers as well as the world’s first pitching crash test simulation sled.
The intensity of the War Room illustrates the huge amount of data that need to be aggregated, analyzed and transformed into strategic insights for thousands of SAP Analytics Cloud users at Honda, combining both the discipline (spotless company-issued uniforms in white are required for all Raymond employees) of leveraging advanced analytics with the artistry of design thinking for solving vexing problems when making everything from popular Civics to commercial jets to Honda-branded generators for customers all around the globe.
The same intensity can be applied to SAP as it aims to push its analytics offerings in a crowded marketplace now embracing incumbents as much as newcomers, not too different from the siege mentality of automotive OEMs in their bruising fights against one another, while thwarting the moves of disruptive competitors like Google, Tesla and Uber in the evolving mobility marketplace that covers innovative technologies from autonomous transportation to ride-sharing.
In the evolving analytics software market, lavish attention is being paid to Anaplan, Domo, Snowflake and Tableau, which didn’t even exist or barely registered a decade ago when SAP – fresh off its $6.8-billion purchase of Business Objects (the precursor to SAP Analytics Cloud) in 2008 – became one of the Top Four vendors along with IBM Cognos, Oracle Hyperion and SAS Institute. Today, three of those four newcomers (Anaplan, Domo and Tableau) are publicly-traded companies with a combined market cap of more than $15 billion and Snowflake for Cloud Data Warehousing is fetching a valuation of as much as $3.5 billion.
Piecing the Puzzle
Now the question is whether SAP stands a fighting chance to rise above the occasion by course-correcting its piecemeal approach, which has dominated its analytics agenda over the past few years. Since 2015, SAP has ushered in multiple analytics products with mixed results including Lumira for visualization, Leonardo for AI and ML, and Vora (now dormant) for Big Data analytics like Spark, not to mention acquisitions such as Altiscale for Big Data services, KXEN for predictive analytics and Roambi for mobile BI. The list does not even account for the numerous branding changes of Business Objects cloud offerings through the years.
Now the emphasis is on SAP Cloud Analytics for BI, enterprise planning and augmented analytics, along with Digital Boardroom as a highly-differentiated add-on app. And the two-day analyst event in Vancouver was noteworthy by putting different pieces back together to focus on these products.
To begin with, Vancouver was where the French-based Business Objects expanded its analytics workforce rapidly after first spotting the city’s savvy development and creative talent through its purchase of Crystal Decision in 2003. Following the Business Objects purchase, SAP has invested $22 million more to transform a 200,000 square-foot building into the biggest software company in the city with more than 1,300 employees, about half of whom are developers working on its analytics products. For Cloud Planning alone, SAP now assigns at least 200 developers to the module in Vancouver.
Additionally, the vendor has more than 152 college interns performing different functions in a three-story building that takes up a full city block in downtown Vancouver. When many of these interns graduate, more than a third could end up being offered full-time jobs from the SAP analytics group or the Seattle-based Concur, which has added many resources in Vancouver after becoming part of SAP.
The SAP Vancouver building houses a gym, bike room, maternity room, fitness classes, as well as a serene meditation room that sits next to a colorful lounge with a giant jigsaw puzzle waiting to be solved.
The person in charge of solving the analytics puzzle is Gerrit Kazmaier, a SAP senior vice president who has spent years working in Vancouver before recently being sent back to Walldorf to run not just SAP Analytics, but also SAP HANA.
During the event, Kazmaier was adamant about the vendor’s ability to stem the tide that favors best-of-breed providers like Anaplan and Domo because of customer preferences of streamlining a consistent reporting approach while driving insights from different data sources that can be easily integrated. More importantly, the combination of SAP HANA and SAP Analytics Cloud gives customers the level of data protection that is unmatched, according to Kazmaier.
Simply put, SAP Analytics Cloud offers new and existing customers of SAP the chance to put standardized analytics tool to work effectively for different key stakeholders for planning, data warehousing and financial reporting – all working on a single, simple and trusted platform, Kazmaier added.
In fact, customers said they are standardizing on SAP Analytics Cloud in order to achieve a consolidated view after trying and failing in their attempts with competing analytics products from vendors like Qlik, which is limited to backward-looking view and static reporting, according to one user.
Currently, SAP leads the $15-billion market for analytics, Business Intelligence and Enterprise Performance Management with a 13% share, as shown in the following exhibit.
Source: Apps Run The World, February 2019
Not ceding any ground to newcomers, SAP Analytics Cloud is solidifying its market presence and mounting an all-out assault through aggressive pricing, new product lineups for the Cloud as well as enhanced support for a growing portfolio of SAP applications.
Already, SAP Analytics Cloud has signed hundreds of partners and over 2,400 customers including dozens of marquee accounts like Cascades (a $4-billion paper manufacturer), Graphic Packaging (a $6-billion consumer packaging provider) and Honda.
Adding value and cutting prices will help SAP Analytics Cloud win more deals. At the upcoming SAPPHIRE NOW event, SAP is expected to announce a host of Cloud-based data management products to compete directly with Snowflake and the likes. Additionally, the decision to split the code between its cloud and on-premise offerings will result in accelerated development for SAP Analytics Cloud, which already is running on a two-weekly release cycle.
Furthermore, SAP Analytics Cloud is adding AI and machine learning capabilities in order to position the analytics engine as part of the narrative, instead of being seen as a one-dimensional dashboard or visualization aid. The key is to enable faster decision making with simulated models, automatic suggestions and data-driven insights. Football club FC Nuremberg is benefiting from the Intelligent Augmentation features of SAP Analytics Cloud to improve player’s performance based on a range of metrics from training load to skills assessment as well as health and fitness scorecarding.
Aggressive pricing moves SAP closer to the fray. Currently, SAP Analytics Cloud is list-priced at $23 per user per month for Business Intelligence. By comparison, Domo is charging an estimated $83 per user per month for Cloud BI.
SAP Analytics Cloud for planning’s pricing is $148 per user per month, which is comparable to that of Anaplan. On the other hand, the latter tends to command a higher price point once the customer picks up a slew of extensions, premium support and service.
SAP is capable of undercutting rivals like Anaplan on price since its customers are already paying for other products like SuccessFactors, which has made SAP Analytics Cloud the defacto add-on for workforce analytics.
SAP has also lowered prices of its on-premise analytics products to ensure maximum value for customers working on a hybrid approach using both Cloud and on-premise analytics.
Live Connections between SAP Analytics Cloud and other products like SAP BPC, BW, and HANA will drive more deals for the vendor, given the fact the installed base of BPC for budgeting, planning and consolidation stands at 7,000 and SAP BW for data warehousing has 11,000 customers and 21,000 installations worldwide.
A longtime BPC customer, Charles Reeves, senior manager of BI & Analytics IT at Graphic Packaging, said the integration between BPC and SAP Analytics Cloud will spur new use cases involving a time series of pricing for each item within BPC, potentially delivering more accurate forecasting because of the combination of real-time and historic pricing data.
SAP executives said many of its BPC and BW customers will stay put for the time being as they evaluate the delta between its cloud and on-premise analytics products, adding that they expect to reach full parity within three years.
Selling into the SAP Cloud apps environment is another top priority with SAP Analytics Cloud identifying more than 100 SuccessFactors Employee Central customers as prime candidates, followed by another short list of accounts running Ariba, C/4 HANA, Concur, Fieldglass and S/4 HANA Cloud.
Although most of these Cloud applications like Concur and Fieldglass still do not run on SAP HANA, which is pre-requisite for SAP Analytics Cloud, by putting Kazmaier in charge of both could make the Cloud-federation strategy work for all parties involved.
Additionally, upcoming enhancement in SAP Analytics Cloud will include advanced enterprise search that sifts through content such as purchase orders and employee records across all of these SAP applications, a value proposition that could save time and money for millions of their users.
Similar to Honda’s successes in turning cornfields in Raymond and other Midwestern sites into thriving assembly plants and cutting-edge design centers for a global audience, SAP aims to catapult Vancouver into a model on how future enterprise decision support will look and behave, ultimately helping customers piece together different moving parts and solve their enterprise decision support puzzle along the way.
|ABeam||Consumer Packaged Goods||4961||$660.0M||Japan||SAP||SAP Analytics Cloud|
|Borchers Americas, Inc.||Life Sciences||175||$50.0M||USA||SAP||SAP Analytics Cloud|
|Cascades Inc.||Consumer Packaged Goods||11000||$3.10B||Canada||SAP||SAP Analytics Cloud|
|Delaware International||Professional Services||1800||$263.0M||Belgium||SAP||SAP Analytics Cloud|
|Delaware North America||Professional Services||1800||$200.0M||USA||SAP||SAP Analytics Cloud|
|FC Bayern München Basketball||Media||2100||$550.0M||Germany||SAP||SAP Analytics Cloud|
|Graphic Packaging International||Distribution||12000||$41.60B||USA||SAP||SAP Analytics Cloud|
|HOERBIGER Holding AG||Manufacturing||7300||$1.32B||Switzerland||SAP||SAP Analytics Cloud|
|Honda R&D Americas,Inc.||Automotive||1500||$300.0M||USA||SAP||SAP Analytics Cloud|
|Kaeser Compressors||Manufacturing||5000||$116.0M||Germany||SAP||SAP Analytics Cloud|
|Lincoln Sentry||Professional Services||230||$10.0M||Australia||SAP||SAP Analytics Cloud|
|Live Oak||Consumer Packaged Goods||425||$135.0M||USA||SAP||SAP Analytics Cloud|
|Northern Gas Networks||Utilities||2658||$200.0M||UK||SAP||SAP Analytics Cloud|
|Pratt Industries||Construction and Real Estate||4000||$825.0M||USA||SAP||SAP Analytics Cloud|
|Rainforest Connection||Professional Services||20||$2.0M||USA||SAP||SAP Analytics Cloud|
|Team Beverage AG||Consumer Packaged Goods||230||$15.0M||Germany||SAP||SAP Analytics Cloud|
|Topgolf International, Inc.||Leisure and Hospitality||40||$4.0M||Australia||SAP||SAP Analytics Cloud|
|Vinci Energies||Utilities||69400||$12.25B||France||SAP||SAP Analytics Cloud|
Source: Apps Run The World, February 2019