What’s Up With SAP’s Cloudification Strategy In Europe?
At the DSAG’s (the German-speaking SAP user group) Technology Days event in Mannheim, Germany, SAP customers discussed the new SAP Cloud Strategy. Many customers represented in the DSAG expressed a wish to see a return of the vendor’s strategy to a certain customer centricity, as opposed to being focused so much on its own internal strategic realignment toward the cloud business.
In Mannheim, the main focus area was the “anchor release” of S/4HANA due in October 2023. With the anchor release, SAP wants to close a functional gap between S/4 HANA (on-premises and private cloud edition) and ERP Central Component (ECC). In addition, the Walldorf-based company wants to lure new customers into its public cloud with the commercial bundle SAP GROW and thus accelerate the move toward the S/4HANA public cloud solution.
SAP To Strengthen Its Public Cloud Business
In 2027, SAP is going to terminate (or move to extended support) the mainstream maintenance of the Solution Manager and of SAP Process Integration/SAP Process Orchestration, which is still based on the old NetWeaver technology stack. The cloud-based Application Lifecycle Management will replace them, together with other solutions from the Signavio portfolio.
This means a cloudification of the SAP offering, implying a simplification and modularization of the SAP solutions landscape. SAP has indeed been focusing on so-called “modularization” since 2011. Nowadays, solutions are provided centrally on the Business Technology Platform and connected via an interface to S/4HANA on-premises, private cloud, or public cloud. The ERP monolith is breaking down as SAP is marketing separate solutions that it used to sell as part of the ERP Core offering. Due to the major changes in the SAP product portfolio, topics such as easy migration, integration capability, data protection, and IT security are getting more relevant than ever.
What SAP’s Cloudification Means For European Customers
The accelerated move of SAP to the public cloud within the S/4HANA strategy will leverage an enlarged set of functionalities in the SAP product portfolio that promises to equal those currently available in ECC. This opens more challenges for the German vendor, however, as the cloud business brings hardware, software, and data sovereignty constraints and an awful lot of cybersecurity-related hurdles.
European customers should keep in mind that great functionalities should be coupled with sovereignty compliance, which calls for a totally different approach to building solutions and deploying technologies for the European market. As we move forward into 2023, this might represent a more and more influencing factor as clients plan to move from ECC to SAP S/4HANA or start thinking about replacing their current vendor.