SAP – on-premise, or Cloud? Why not both?

10 April 2014

Tony Rosenthal

Tony Rosenthal


SAP is very vocal in its backing of cloud computing. This year, it has already announced a major shift to the cloud in its strategy and has certainly put its money where its mouth is by investing a vast amount of time, effort and thinking into this space.

But what does this mean for SAP's existing customer base? Whether a huge multinational with large-scale business processes to support, or an SME utilising best practice approaches, there are many organisations that have invested a considerable amount of cash into their SAP landscape. Have they just been forgotten? And what are they going to do with “SAP as a Service”

The bigger picture: what is driving the move to cloud?

There are a number of factors, but it basically comes down to one – money! The cost of running cloud applications is lower, maintenance costs become negligible, and development costs move to the provider, as do hardware and infrastructure costs. But maybe more importantly than that, the speed of innovation is so fast at the moment that it is becoming virtually impossible for on-premise solutions and in-house IT departments to keep up. If, however, you are buying a slice of another organisation's solution and hence innovation, this becomes easier. And if you can pick and choose a variety of class leaders to run specific functions, then what's not to like?

So what of SAP's customers?

One has to admit SAP is one of the most innovative organisations around and it is already offering slices of great functionality in the Cloud, including:

  • Social media monitoring tools via its partnership with NetBase
  • Field sales and customer service in SAP Cloud for Customer
  • Payroll, Workforce Planning and Analytics in a suite of applications inherited in the acquisition of SuccessFactors
  • Expenses and Invoicing applications developed as part of SAP Cloud for Financials.

This presents a huge opportunity for SAP customers as it enables them to pick and choose specific elements of functionality that they see as priorities. Choosing these SAP Cloud products then allows them to:

  • Integrate these into their current SAP landscape using built in integration scenarios
  • Utilise the functionality on mobile devices as part of the cloud licenses
  • Roll it out in a matter of weeks.

In addition SAP will release upgrades and new functionality on a quarterly basis.

So again, what's not to like?

As long as organisations can reconcile some of the concerns that linger over security and data privacy, as well as other inhibitors such as some of the lack of flexibility compared to on-premise solutions, then moving towards a hybrid cloud and on-premise architecture offers existing SAP customers a scalable, low cost and innovative suite of solutions that can integrate into their existing landscape and just might help to provide the competitive edge.

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