The intense competition between SAP and Oracle in enterprise apps is expanding into cloud-native databases as SAP is pairing up with Oracle cloud rival AWS to develop new enhancements for the Hana Cloud Database.
If it’s true that the enemy of my enemy is my friend, then the SAP and AWS collaboration could take on a new dimension as SAP renews its efforts to become a major player in the booming market for cloud-native databases.
While Oracle has been the dominant database vendor for decades, the emergence of the cloud as the unquestioned IT architecture of the digital future has opened up the market to many dozens and perhaps even hundreds of cloud-native database vendors. This new cohort is looking to position themselves as attractive alternatives to Oracle by offering specialized capabilities for a single function — for example, graph databases — in contrast to the all-in-one position that Oracle Database has held for a very long time.
For SAP, its HANA technology has been around for more than 12 years and has become best-known for the part it plays in SAP’s hypergrowth cloud ERP suite, S/4HANA Cloud. But when SAP first introduced HANA more than a decade ago, it was the brainchild of SAP co-founder and longtime leader Hasso Plattner, and he positioned it as a modern and powerful database alternative to Oracle.
While the HANA database gained some traction over the years among major SAP customers, the company has not given it much visibility during the cloud transformation that Klein has led since early 2021. But that might be about to change.
During SAP’s Q3 earnings call last week (SAP reported cloud revenue was up 23% to $3.82 billion), CEO Christian Klein gave a very clear indication that HANA Cloud Database could become a higher-priority product within SAP.
Asked by an analyst to talk about SAP’s surging platform-as-a-service (PaaS) business, which is dominated by the company’s Business Technology Platform, Klein offered this perspective as part of a broader answer.
“BTP is an extremely scalable platform, it’s a native cloud platform, and we are continuously working to improve it,” Klein said.
“We actually also continuously work on TCO. For example, HANA Cloud, which is a new cloud database, gives us enormous scale-out capabilities, which is extremely important not only for our TCO but also for our large customers who actually can enjoy this new database in the cloud.”
And to fuel those scale-out capabilities as customers need more-powerful databases to manage their huge new initiatives around artificial intelligence (AI) and data, SAP is looking to AWS, which is itself battling Oracle in cloud databases as well as cloud infrastructure.
Klein continued: “Second, we’re also innovating with AWS on ARM. As we also embed further new technology, we are constantly updating the capabilities within the database.
“We still have a few ideas for the year to come, and the platform [BTP] is now the underlying platform for all of our business application,” Klein said.
“So it’s the foundation.”
Since Klein became sole CEO of SAP almost four years ago, that was the first time that I can recall that he has mentioned the HANA database on an earnings call. I don’t believe in coincidences, so I suspect Klein very purposefully made that comment to get a couple of messages across:
- SAP is going to ratchet up its efforts in the fast-growing cloud-database field behind HANA Cloud Database; and
- SAP is looking to enhance its competitive position against Oracle in that booming segment by joining forces with another Oracle archrival: AWS.
And I’m guessing this won’t be the last collaborative effort we’ll be seeing from SAP and AWS.
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