Why SAP HANA could not fail or the fundamental depravity of vertical integration
The lukewarm clumsiness of the Sly Plan (tm) of our international colleagues in the dangerous business (the first sighting shots of the Teutonic PR dreadnought) prompted us to disassemble the Khans case.
The prerequisites for the decision of sappers bosses to develop their own DBMS lie on the surface:
The plot of the plot is quite serial.
From the aggregate of these three points, the victorious strategy of Sapa for Oracle’s final contraction is quite obvious: make your own cool DBMS.
Due to which:
PROFIT! visible to the naked eye.
Plus, by indirect signs (intrusive pedaling of In-Memory in the promotion of Khana), it can be assumed that at the time of making the Structural Decision, the bosses of Sapa saw a real opportunity to make a really cool DBMS and technologically furnish Oracle: Orakla then was not.
However, it turned out smoothly only on paper.
')
Naturally, the unconditional technological leader of the database market to implement similar (and “better”) bells and whistles turned out to be faster and cheaper.
By the time the super-winning hano-wunder-wafara entered the market:
Suitcase without handle as is.
What should Sapu do? The most rational is to close the project and replace the top management. Vanguy: this will end. However, rather late than early.
The fundamental reason for the sapper feil is the temptation of vertical integration (to collect added value along the entire chain). Another name is insourcing. And if you look even deeper - the blue dream of monopoly.
We already wrote about the basic insanity crap. The logic outlined in that text is quite universal.
That is why, for example, Apple with Jobs refused PowerPC and switched to the Intel platform. And it does not even occur to Apple’s people to buy factories for the production of electronic components in order to curry the raspberry to Samsung, which is at the same time the largest supplier of chips and a competitor in the consumer market.
And Andy Grove, who passed away the other day, was the most important decision in his life, which saved Intel from bankruptcy in the early 80s, considered the refusal to manufacture memory chips.
The sad administrators of Sapa, instead of getting into an absolutely new for them industry, in which they had no ear for money, it was necessary to strengthen the market position of their basic product with all their might. Billions of dollars and years worthlessly wasted on Khan had to be spent on their total rebuild to the obscenity of obsolete trash .
We assume that in fifteen years in the business literature devoted to the SAP collapse case, the episode with Hanoi will be interpreted as the Fateful Decision - the Rubicon, on the contrary. Like a trip to Russia by Napoleon in 1812.
PS If suddenly someone tells us that there are, they say, positive examples of vertical integrations (such as VIOCs, for example), then we will answer: a hundred years ago, the Austrian school (in particular, Ludwig Mises) was scientifically proven that in the free market inefficient monopoly cannot exist . A textbook example is the inglorious history of US Steel.
Accordingly, purely mathematically, if a monopoly exists, then either a) it is currently effective (today's Google, or Standard Oil in the 19th century), or b) the market is NOT free - just a domestic vertically integrated oil oligopoly.
And far from only domestic.
The global market for ERP systems is relatively free (unlike many national ones - see the legendary successes of the same SAP AG in the same team with Russian officials ). The practical effectiveness of the products of the great Reichs, if it amazes the imagination, is by no means positive.
The prerequisites for the decision of sappers bosses to develop their own DBMS lie on the surface:
- SAP and Oracle are the main competitors in the global market of ERP systems (SAP R / 3 and Oracle e-Business Suite), but SAP firmly (so far) holds the first place
- The vast majority of operating SAP solutions are aggregated with Oracle Database DBMS. Which, in turn, is today the undisputed market leader in database management for industrial business applications.
- A very significant part of the profits of Oracle Corp. (too lazy to dig in the sources, about half of the memory) are revenues from sales of the Oracle Database complete with SAP solutions
The plot of the plot is quite serial.
From the aggregate of these three points, the victorious strategy of Sapa for Oracle’s final contraction is quite obvious: make your own cool DBMS.
Due to which:
- Oracle will lose half the profit. Minimum.
- which will naturally go into Sapa’s pockets - at the expense of selling his own cool DBMS to his clients who buy Sap’s business applications
PROFIT! visible to the naked eye.
Plus, by indirect signs (intrusive pedaling of In-Memory in the promotion of Khana), it can be assumed that at the time of making the Structural Decision, the bosses of Sapa saw a real opportunity to make a really cool DBMS and technologically furnish Oracle: Orakla then was not.
However, it turned out smoothly only on paper.
')
Naturally, the unconditional technological leader of the database market to implement similar (and “better”) bells and whistles turned out to be faster and cheaper.
By the time the super-winning hano-wunder-wafara entered the market:
- Sap has become by several billion dollars poorer (the cost of developing a modern database from scratch)
- vundervaflya turned out to be much more waffle than “wunder-” - another dozen added to the dozens of DBMS inferior to the Oracle Database
- from a marketing point of view, the sappers themselves dug themselves (according to Mikhalkov’s hero from “Blind Man’s Buff), a fucking pit of shit on a billiard table, having advertised in advance the super-defeat and hyperspatial nature of the product that turned out to be zilch.
Suitcase without handle as is.
What should Sapu do? The most rational is to close the project and replace the top management. Vanguy: this will end. However, rather late than early.
The fundamental reason for the sapper feil is the temptation of vertical integration (to collect added value along the entire chain). Another name is insourcing. And if you look even deeper - the blue dream of monopoly.
We already wrote about the basic insanity crap. The logic outlined in that text is quite universal.
That is why, for example, Apple with Jobs refused PowerPC and switched to the Intel platform. And it does not even occur to Apple’s people to buy factories for the production of electronic components in order to curry the raspberry to Samsung, which is at the same time the largest supplier of chips and a competitor in the consumer market.
And Andy Grove, who passed away the other day, was the most important decision in his life, which saved Intel from bankruptcy in the early 80s, considered the refusal to manufacture memory chips.
The sad administrators of Sapa, instead of getting into an absolutely new for them industry, in which they had no ear for money, it was necessary to strengthen the market position of their basic product with all their might. Billions of dollars and years worthlessly wasted on Khan had to be spent on their total rebuild to the obscenity of obsolete trash .
We assume that in fifteen years in the business literature devoted to the SAP collapse case, the episode with Hanoi will be interpreted as the Fateful Decision - the Rubicon, on the contrary. Like a trip to Russia by Napoleon in 1812.
PS If suddenly someone tells us that there are, they say, positive examples of vertical integrations (such as VIOCs, for example), then we will answer: a hundred years ago, the Austrian school (in particular, Ludwig Mises) was scientifically proven that in the free market inefficient monopoly cannot exist . A textbook example is the inglorious history of US Steel.
Accordingly, purely mathematically, if a monopoly exists, then either a) it is currently effective (today's Google, or Standard Oil in the 19th century), or b) the market is NOT free - just a domestic vertically integrated oil oligopoly.
And far from only domestic.
The global market for ERP systems is relatively free (unlike many national ones - see the legendary successes of the same SAP AG in the same team with Russian officials ). The practical effectiveness of the products of the great Reichs, if it amazes the imagination, is by no means positive.
Source: https://habr.com/ru/post/300384/
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