Empathy, the Stack Fallacy, and SAP HANA

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As reported by CIO, IDC maintains that “by 2020, more than 30% of the IT vendors will not exist as we know them today.”

The foremost factors disrupting vendors of traditional legacy systems (hardware and software) fall under the rubric of digital transformation -- migration to the cloud, exponential data growth, the need for mobility and speed, and, of course, the ever-pressing imperative to lower costs.

The traditional IT stack, replete with rigid business processes, disjointed and redundant applications, data siloes, sprawling, costly datacenters, and antiquated, disk-based database management systems are nothing short of a death sentence for companies hoping to compete in today’s fast-paced digital economy.  

Simply put, legacy vendors who have not evolved their products to enable digital transformation and function seamlessly as integral components of a streamlined, cloud-reliant (if not entirely cloud-based) IT infrastructure are not long for this world.

One, major reason large vendors are rapidly being disrupted by more nimble competitors can be summed up in a recent phenomenon know as the ‘stack fallacy.’
As a quick refresher, in the world of enterprise technology, the “stack” is the layered cake of technology, with one level of technology sitting atop the next until a product or service reaches the end user. With cloud-based products, a stack of technologies stretches from the server through the operating system through a cloud abstraction layer and then to the apps running atop that, until you reach the user’s desktop computer or mobile device.

Postulated in a TechCruch article by Anshu Sharma (and expounded upon in a great WSJ article by Christopher Mims), “Stack fallacy is the mistaken belief that it is ‘trivial’ to build the layer above yours.” According to Sharma, “the stack fallacy is a result of human nature  — we (over) value what we know,” and because of their familiarity with technologies a layer above, tech companies assume (but mostly fail) that they can easily build products above their layer.

Sharma astutely observes that these failures are a direct consequence of lack of customer empathy: “The bottleneck for success often is not knowledge of the tools, but lack of understanding of the customer needs.”

(Check out the TechCrunch and WSJ articles cited above for numerous examples of spectacular ‘Stack Fallacy’ failures.)

Another interesting aspect of the stack fallacy is that the inverse appears equally true; namely, that moving down the stack is easier and vendors that evolve in this direction enjoy a much higher success rate – which brings us back to empathy and SAP HANA.

SAP HANA, an exercise in customer empathy

In every respect, HANA represents SAP’s foray down the enterprise technology stack -- from the business application software layer to the underlying database layer.

SAP launched its HANA in-memory database in 2010, and last year launched S/4 HANA. Billed by SAP CEO Bill McDermott as “our biggest launch in 23 years, if not in the entire history of the company,” SAP S/4HANA, the successor to SAP Business Suite, is integrated into the underlying HANA database and available in the cloud, on-premise or via a hybrid deployment.

While SAP will continue support for existing ERP systems until 2025, S/4HANA is the future for all SAP customers. S/4HANA, SAP has made clear, will only run on HANA.

For SAP, moving down the stack and betting the company on HANA is tantamount to the ultimate exercise in customer empathy.

The limitations of traditional, disk-based databases are well known. They are costly CPU hogs that pose daunting power and cooling challenges. While good at storing persistent, structured data, traditional databases are woefully inadequate for business intelligence purposes. They take too long to query and analyze large amounts of data.

HANA simplifies IT landscapes by eliminating redundancy-driven server sprawl and, ultimately, the need for multiple, separate business intelligence systems, but that’s just the beginning. HANA also makes it far easier for non-techie business users to perform ad hoc analytics by significantly simplifying the modeling process, which allows organizations to draw down their army of data specialists.

With business-process speed improvements up to100,000x, SAP on HANA is fast, empowering businesses to run live -- to transact, analyze and predict instantly on a single platform at the moment of opportunity.

Speed translates into agility, which in turn, drives productivity, efficiency, competitive advantage, and market share growth – all areas vital to SAP customers.

Embedding analytics at the transactional level opens up entirely new business models and processes. SAP on HANA affords organizations the ability to completely rethink how information is created, consumed, and shared.

As we enter the era of big data, this ability to rethink information in ways that yield clear-cut business value will drive innovation and transformation and distance the winners from the losers.

Moving forward, HANA will contribute significantly to SAP’s progress in the cloud. As the cloud-computing paradigm shift plays out, HANA is positioned to play a pivotal role, driving deeper cost savings from cloud services; increasing the cloud’s analytic and BI capabilities by orders of magnitude; wringing latency from cloud-based services; and infusing cloud services with reach and flexibility.

Partners with the ‘right stuff’ needed for S/4HANA migration

For established, global businesses, strategic migration to S/4HANA will be an extensive journey that necessitates the support of a leading IT service provider -- a trusted partner such as NTT DATA with comprehensive planning capabilities, deep technical and business-process expertise, proven industry experience, a structured migration methodology, and an ample repertoire of proprietary tools and accelerators that mitigate risk, reduce project cost and duration, and speed time-to-value throughout all phases of your S/4HANA migration.

Contact NTT DATA today to begin or advance your S/4HANA journey.

Post Date: 5/25/2016

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