SAP goes all in with the cloud

May 8, 2013: 10:26 AM ET

The German software giant is betting on cloud-based technology and services.

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FORTUNE -- In case you haven't heard, SAP is serious about the cloud. On Tuesday the enterprise software giant announced it will offer HANA, its in-memory database, as a monthly subscription service, delivered via the cloud.

A limited cloud-based version of HANA was already available through Amazon (AMZN) Web Services. But SAP (SAP) says customers will now be able to access applications powered by HANA -- think enterprise resource planning and customer relationship management tools -- via SAP's own cloud, which consists of seven data centers around the globe. Next week, the Germany-based company is expected to unveil more cloud-related announcements and share additional details on this new flavor of HANA at its annual customer conference in Florida.

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Last month, in its lastest reported earnings announcement, SAP said HANA software revenue tripled year-on-year, contributing 86 million euros in the most recent quarter. Along with mobile and web-based software, HANA represents new revenue opportunities for the company, whose bread and butter is selling large, on-premise software installations -- and charging costly fees to support and maintain them.

Of course, SAP's not the only traditional software company trying to branch out and prove it's "all in" on the cloud. Late last year rival Oracle (ORCL) unveiled its ambitious goal of owning the entire cloud computing "stack" -- from the underlying infrastructure to the apps. And earlier this week Adobe Systems (ADBE) announced it is getting rid of packaged software; from now on, creatives will have to buy their digital tools via a cloud-based, subscription model only.

SAP says its new offering aims to enable faster deployments and lower, more flexible pricing.

"Customers want more and more options in how they take advantage of the value SAP HANA brings," Vishal Sikka, SAP's head of technology and innovation, said in a release issued Tuesday. "With the SAP HANA Enterprise Cloud, we are delivering HANA at scale with instant value and no compromise. We are simplifying customers' experience and expanding their choice in how they want to adopt SAP HANA, now bringing it to a massive scale for enterprise mission critical applications -- and we are doing this without disruption through the cloud."

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But SAP has yet to announce pricing for the new delivery method for HANA. And while getting up and running will be easier without having to invest in (and wait for) a dedicated, on-premise appliance, it isn't as quite as quick and painless as ordering a book on Amazon. In order to use HANA, customers first need to obtain licenses for HANA and applications that run on top of it. They then need to consult with SAP services workers, to help determine which applications are best moved to the HANA cloud, and to assist in "onboarding and migration."

And just because HANA is now available as a subscription, cloud-based service doesn't necessarily make it easier or cheaper to use. It's still the same product, just delivered via a different mechanism. The proof, as they say, will be in the pudding. For now, stay tuned to next week, when SAP unveils more details on the new, cloud-based HANA.

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About This Author
Michal Lev-Ram
Michal Lev-Ram
Writer, Fortune

Based in Silicon Valley, Michal Lev-Ram covers enterprise and mobile technologies for FORTUNE. Prior to joining FORTUNE, she wrote for CNNMoney, Fast Company, Popular Science and other business and technology publications. She was also a staff writer at Business 2.0 and holds a B.A. in journalism from San Francisco State University.

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