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SAP 2014 Reaching for the Cloud Case Solution
SAP had established itself as a leader in the marketplace as it continued to enter into new areas of business expertise by developing new applications. The company management had devised a strategy of doubling the sales of the company which is why it added new technology categories in its core categories. Further, it introduced SAP HANA which was in-memory computing technology, and which replaced the traditional database management system by empowering its users to conduct real-time data modelling through its user functionality features. To support ts technology, the company also made aggressive acquisitions of businesses specializing in the field of mobile technology to provide its users with an improved experience. The company was then faced with a decision of housing the SAP HANA in its own data center or partnering with a third party. It partnered with IBM given the growth phase of SAP HANA and the huge associated capital costs of building a new data center. The SAP HANA is expected to see further growth in its market share as businesses will let go of their old database system and adopt SAP HANA, which is more efficient, has quick data processing time, and is cost-effective.
Following questions are answered in this case study solution
What is the business environment that SAP finds itself in at the beginning of the case? What changes must it make to its business model? Why must it make those changes?
What efficiencies for SAP are offered by the transition to cloud/network computing? How might those efficiencies inform your management decisions?
As SAP reconceptualized its core business model, it acquired companies. How does acquiring companies strengthen an evolving company's business model? What management cautions should be observed?
What were the roles of the Communities of Innovation? How might that approach provide you with a particular perspective on management opportunities?
What financial (profit) challenges are faced by the new cloud computing/subscription model? How is SAP addressing those challenges?
Case Analysis for SAP 2014 Reaching for the Cloud
1. What is the business environment that SAP finds itself in at the beginning of the case? What changes must it make to its business model? Why must it make those changes?
SAP is highly dependent on its technology to develop new business processes for new applications that played a huge role in establishing the company as a leader in the Enterprise Resource Planning field. It is essential for the company to sustain its leadership status given the constantly evolving market trends. Hence, the company had to adopt continuous innovation so that it stays competitive in the computer technology business. The latest technology that SAP came up with was by growing its core marketing categories pertaining to enterprise applications and the analytics function by including three new categories focused on mobility for businesses, in-memory computing, and cloud computing, The innovation strategy was a success as SAP recorded an increase in revenue in each of the three categories. Further, the company was able to develop SAP HANA which is an in-memory cloud computing platform that empowered the users to make use of data with real-time functionality for data modelling. This made the company even more competitive as through its platform it was enabled to transition all its existing product offerings into its cloud-based servers. This resulted in SAP competing directly with major players like Amazon, Microsoft, and IBM. SAP would have to make changes to its business model as it would be a different business environment as compared to the traditional software platform which is why it would have to change the business model to develop a strong presence in the new market and come up with off the shelf applications that are even cheaper to use so that it can compete against the big companies in the industry and continue to record a growth in its revenue.
2. What efficiencies for SAP are offered by the transition to cloud/network computing? How might those efficiencies inform your management decisions?
SAP was able to record significant improvement as it transitioned to cloud network as its product quality improved as a result of quicker implementation. The platform resulted in such a high level of efficiency that it posed a huge threat to other vendors offering traditional database platforms. The efficiency of SAP HANA is based on its capability of combining databases and applications into one robust platform. It provided the users with an opportunity to conduct real-time data analytics and data modelling using advanced computer technology that allows for quicker data processing as compared to traditional database applications and management systems. The new system enables the organizations to analyze large amounts of data on disparate or completely integrated systems to make informed business decisions. Under the traditional system, relational table indices are used that would increase the speed of data retrieval operations but again this would require temporarily copying selected columns into the page memory. Hence, this means additional processing time and storage space which translates into higher costs. Through SAP HANA, this additional cost element was eliminated as t would make use of high processing power for retrieving data as well as the real time processing of the structured as well as unstructured data that is something not offered by the traditional database management systems.
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