For years SAP’s bread-and-butter has been developing application software to run on third-party databases, including archrival Oracle. With the advent of HANA, however, SAP finds itself in the unfamiliar role of soliciting outside developers to build applications for its own database platform.
That’s what SAP has been up to since February when it began reaching out to start-ups to develop Big Data applications to run on top of HANA. According to the Wall Street Journal, SAP has talked with hundreds of start-ups since then and invited 37 of the most promising app developers to take part in a year-long incubator program. Those selected thus far include Alert Enterprises and Zettaset. From WSJ.com:
SAP is looking for start-ups that have a viable product, at least one customer in the pipeline, a use case for big data and less than $40 million in revenue, according to websites advertising the forums. Those start-ups that participate in the accelerator get free access to SAP’s technical resources and customers and guidance through what [Zettaset’s Timothy] Straight called “the SAP maze.”
Some start-ups may also receive funding from SAP Ventures, which is launching a $155 million early-stage fund for HANA investments.
The goal is to supplement SAP’s internal Big Data application development efforts with outside developers that bring a different, perhaps fresher perspective to the game. It’s a smart move on SAP’s part, as the lucrative white space in the Big Data market is definitely applications.
In fact, any vendor that can deliver practical, easy-to-use Big Data applications in the near-term has a real opportunity to solidify its position in the market. With a renewed focus on building intuitive user interfaces for its own applications, a commitment to nurturing talented third-party app developers with this new initiative, and with a solid Big Data foundation in HANA, SAP is in as good a position as any, I believe, to do just that.
SAP also recently improved integration between HANA and its business intelligence portfolio with Hadoop, the popular open source Big Data storage and processing platform. It’s a good sign that SAP may be finally embracing the Hadoop ecosystem, where much of the action and exciting developments in Big Data are taking place.
But the role-reversal for SAP does not come without risks. Namely, betting on start-ups is always a hit-and-miss exercise, and poorly designed third-party apps for HANA could reflect poorly on SAP as well as the developer. Marketing and selling database software is also a different beast than peddling applications, requiring SAP to continue developing new distribution channels for its in-memory database.