Cloudy Software Jump Saves SAP’s Second Quarter

July 22, 2013 Timothy Prickett Morgan

German software giant SAP has turned in a mixed second quarter, and as it turns out, the mix was just right. Between perpetual software license sales and cloud-style subscriptions, that is.

In the quarter ended in June, SAP’s software license sales took a 7 percent dive to €982 million, which would be pretty bad news under normal circumstances. However, its cloud software subscription sales exploded by 206 percent (that means more than tripled) to €159 million, saving the day. Add it all up, and software license and cloud subscription sales together rose by 3 percent to €1.14 billion, and at constant currency in all the markets that SAP sells into, the growth overall was more like 7 percent. With support contracts on these wares up 8 percent to €2.18 billion. Other revenues fell by 3.9 percent to €744 million, and when you add it all up, SAP raked in €4.06 billion. After paying all the bills and the tax man back in Germany, profits after taxes rose by 10 points to €724 million.

“The industry transformation we predicted back in 2010 is now happening at full speed and our strategy of innovation for growth is paying off,” bragged SAP co-CEOs Bill McDermott and Jim Hagemann Snabe in a statement accompanying the numbers. “We continued our double-digit growth momentum, we are leading the transformation of the industry, and our market opportunity is bigger than ever. We are gaining market share in a challenging macroeconomic environment, and with the HANA Enterprise Cloud, we are resolute to capture the future as the cloud company.”

The HANA in-memory database drove €102 million in revenues in the second quarter, by the way, an increase of 21 percent compared to the year-ago period. The company did €86 million in HANA-related sales in the first quarter ended in March. SAP still thinks the HANA line will drive somewhere between €650 million and €700 million in revenues. That seems to imply that HANA is going to have a killer second half. SAP is expecting that the availability of its Business Suite ERP software running atop the HANA database is going to be the rocket fuel that brings in the remaining €462 million to €512 million in HANA stuff in the second half.

McDermott said on a call with Wall Street analysts that by shifting some of its code to the cloud (or buying those that did, to be more precise) and adding mobile applications and in-memory databases, SAP had doubled its addressable market to $220 billion. “We placed our bet on software as the innovation layer in the IT stack instead of consolidating the stack with hardware,” McDermott said in an obvious dig at hardware peddling archrival Oracle. “This is proving to be the winning strategy.”

To be fair, Oracle has done a better job of managing down the Sun hardware that Sun Microsystems would have done, and all of the issues that Oracle has in the Unix systems business its rivals IBM and Hewlett-Packard are also facing with their respective Power and Itanium platforms. That said, SAP gets to play hardware vendors off against each other, which is good. But it is also not able to tune its software for one or two precise sets of software without offending its many hardware partners, and in the long run, this could become an issue. We will have to see how this whole “engineered systems” convergence plays out in the market. It is far from clear, no matter how intriguing it may be to have a completely tuned stack.

SAP Profits From HANA Appliance, Cloud, And Plain Old Software

HANA on Power? It May Be in the Cards

SAP Puts In-Memory Database At The Heart Of Its BusinessSuite ERP

SAP Shakes Off World’s Economic Jitters In The Third Quarter

SAP Sends HANA to the Cloud

SAP On IBM i: The Best Alternative?

SAP Fleshes Out HANA’s Roadmap with Heavy Dose of Sybase

SAP Talks Up HANA In-Memory Database at TechEd 2011

SAP to Chase the SMB Market–Again

IBM Readies Project Kobe to Speed SAP Deployments on System i

SAP Tests Prove i 7.1 Performance Boost Over i 6.1

Power 750 Servers Running i Get SAP Benchmarks

IBM Readies Project Kobe to Speed SAP Deployments on System i

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Best Practices for Doing IBM i Cloud Backup & DRaaS Right

In the technology business for 30+ years including more than a decade in cloud backup and disaster recovery, we’ve learned a few things along the way. Here are best practices to follow – and land mines to avoid.

RELIABILITY. Up to 71% of restores from tape contain failures.

BEST PRACTICE: Use disk-to-disk technology for backups.

With disk-to-disk technology, your backup data resides on disk drives, proven to be far more reliable than tapes. When your backup completes, you know the data is secure and accessible on the disk drive. With tapes you never really know if your data is usable until you try to restore it, at which point it’s too late.

BREADTH OF OFFERING. Choice in product and service offerings meet your business’ needs.

BEST PRACTICE: Don’t settle for less than what you need.

Vendor offerings vary widely. Some are designed primarily for consumers and others for enterprise data centers. Choose a solution that scales and offers the features you need to provide the level of service you expect. De-duplication and delta-block technologies will improve performance, reduce your data footprint and save you money. Find out if their de-duplication offering is at the file level or the block level. Make sure the solution can back up servers, PCs, and laptops as well your applications.

SECURITY. 60% of organizations using tapes don’t encrypt their backups.

BEST PRACTICE: End-to-end encryption with no “back door.”

Using encryption with tape makes backups run slowly and often takes too long to fit within a backup window. As a result, most people simply turn encryption off, creating a security risk. Even with the physical safety of disk-to-disk backup, encryption is essential. Look for 256-bit AES. Find a solution that encrypts your data during transmission and storage. Make certain there isn’t a “back door” that would let someone else view your data.

ACCESSIBILITY. Companies waste thousands of hours waiting on tapes.

BEST PRACTICE: Ensure that you can get your data back with minimal delay.

You should have direct access to your backups, with no time spent on physical transport (no trucks, no warehouses). Restores should take minutes, not hours or days. Set yourself up to work with your data, not wait for it. Make sure your solution provider can meet your Return-to-Operations (RTO) and Recovery Point Objectives (RPO) which determine how quickly you can recover your data and maintain business continuity. Inquire about onsite and offsite replication that provide both improved performance and a solid disaster recovery strategy.

CYBER SECURITY. More than 80 percent of U.S. companies have been successfully hacked, according to a Duke University/CFO Magazine Global Business Outlook Survey.

BEST PRACTICE: Regular cyber security training and phishing tests for all employees using company email are essential to your organization.

Your end-users are the weak link in your network security. Today, your employees are frequently exposed to advanced phishing attacks. Trend Micro reported that 91% of successful data breaches started with a spear-phishing attack. Be sure your vendor of choice includes cyber security training as part of their backup and DR package.

SCALABILITY. Some backup systems can’t scale readily.

BEST PRACTICE: Invest in a data protection architecture that can grow with your business.

You should be able to back up your data no matter how large it grows. Starting small? Look for an option that handles your backups automatically. Then, as you grow, gives you tools to manage complex environments. Look for “changes-only” and compression technologies to speed backups and save space. And insist on bandwidth throttling to balance traffic and ensure network availability for your other business applications. Make sure that their solution offerings rely on common technology to scale easily as your business––and data––grow.

COST-EFFECTIVENESS

BEST PRACTICE: Calculate the true total cost of tape-based back up.

A 2019 Server OS Reliability Survey found that one hour of downtime costs at least $100K for 98% of companies to over $5 million for 34% of surveyed companies. When you do the math, the dollars make sense: Go with disk-to-disk. Unlike tape, there are close to zero handling costs—no rush deliveries, loading, accessing, locating, or repeated steps. And there’s one benefit you can’t factor directly: Reputation. Reliability and security can make an incalculable difference with just one avoided breach or failure.

COMPLIANCE. Most companies have problems satisfying privacy, security, and data retention regulations.

BEST PRACTICE: Choose a data protection partner who has deep know-how about compliance, and the technology to ensure it.

Disaster Recovery. Most companies lack a comprehensive, tested plan for disasters.

BEST PRACTICE: Find a vendor that delivers a complete DR solution.

You can’t say your data protection is complete until you have a disaster recovery plan that is itself complete and tested. Your backup vendor should have both the product mix and professional services team to help you prepare for a worst-case scenario. Make sure they can help configure your backups so you rebound quickly. Best bet: A vendor who can train you to deal with disasters confidently, based on your company’s actual configuration.

EASE OF USE. Some companies don’t —or can’t—manage their backups from one place.

BEST PRACTICE: Get control and reporting you can use anywhere, with ease. Managing your backup environment should be simple, and the software you use should eliminate any guesswork that could lead to lost data. You should know at all times if your data is protected across your entire network—including remote offices—by simply looking at a dashboard. The software should be simple to configure using wizards, yet powerful enough to meet your specific needs with customizable views, job propagation, and roles-based security.

OPERATING SYSTEM AND PLATFORM SUPPORT. Most backup vendors support a limited range of OS, server types, and applications.

BEST PRACTICE: Look for broad and deep technology that supports your complete environment. Your backup solution should accommodate your environment, not vice versa.

CUSTOMER SUPPORT. Backup vendors’ product support varies widely.

BEST PRACTICE: Find a vendor whose support is passionate, maybe even slightly obsessed. Customer support should be one of your vendor’s main selling points. You shouldn’t have to wonder if they’ll be there to help when you need them most. Do they offer phone support or email only, and who exactly are you talking to when you call that 800 number? Find a vendor that will treat your data as if it were their own.

REPUTATION. Does your backup vendor have a quality reputation and the financial resources to stay in business for the long haul?

BEST PRACTICE: Find a vendor with strong financial backing and customer references. There are a lot of vendors that have come and gone. When you consider a service provider, look for one that has strong financial backing, a solid business plan and the ability to be in business as long as your data needs to be stored. Ask for customer references and case studies as their customers are the best validation you can get.

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