Google And SAP: Two Very Different Cloud Strategies

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SAP and Google both launched significant new or expanded cloud products at their respective events this past week, but only one of these vendors seems to understand the power of cloud computing.

While both Google and SAP shared a 1980's music sensibility at their respective conferences this week - Billy Idol performed at Google I/O and U2's Bono walked the floor at SAPPHIRE - the two companies see the future of computing very differently. Even when the two companies agree on the importance of cloud computing, their strategies couldn't be more different.

For one thing, SAP's new cloud isn't even a cloud. But then, SAP's Bono wasn't really Bono, either, but merely an impersonator.

Forrester analyst Stefan Ried takes SAP to task for getting cloud wrong in its new HANA Enterprise Cloud:

"The Hana Cloud is a very careful move to a new business model. It is not disruptive and will NOT accelerate Hana usage to the many more customers who have been struggling with Hana on-premises because of its licensing.

"The announced Hana Enterprise Cloud follows the 'Bring Your Own License' paradigm. While this is great for customers that already have a Hana license and would like to relocate it into the cloud, it is useless for customers that might have largely fluctuating data volumes or user numbers and might specifically use a cloud because of its elastic business model."

In other words, it's not really a cloud.

Amazon, more than any other cloud vendor, has insisted that such "clouds" don't deserve the name, as they fail to live up to the very premise of cloud computing: truly elastic, on-demand software. But while Amazon normallyreserves its ire for private cloud vendors, SAP's HANA Cloud is even less of a cloud because it requires you to bring your own HANA license to the party.

Meanwhile, over at Google I/O, Google introduced improves to Google Cloud Platform and made Google Compute Engine available to all. Like Amazon, Google is making a powerful array of infrastructure technologies available on-demand, and totally elastic.

Google, like Amazon, realizes that the future of computing is not going to be won by the vendor with the prettiest device or even the best user interface: it will be won by the company with the best cloud services. As Redmonk analystStephen O'Grady pointed out, summarizing Google's first day announcements:

"[Google is clearly telegraphing that] the war for mobile will not be won with devices or operating systems. It will be won instead with services."

SAP must see this, too, but appears hamstrung by its past, in true "Innovator's Dilemma" fashion. It has so much revenue tied up in legacy deployments of legacy software that even releasing a kind-of, sort-of, not-really cloud offering is the best it can do.

This is not to suggest that HANA is bad technology. By most accounts, it's quite good. But as Ried argues, "The SAP Hana Enterprise Cloud is version 2 of the initial Hana in-memory database, but the cloud offering based on 'Bring Your Own License' is more version 0.1 of a cloud business model."

Which is to say, it's no cloud at all. While this may not seem like a big deal, enterprises are barreling into true clouds for a wide variety of needs, and no longer merely for development and test workloads. If SAP wants to participate in the future of enterprise computing, it should learn from the companies that are inventing that future: Google and Amazon.