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SAP is anticipating huge need for 'in-Canada' service, sees customers switching from Oracle to HANA

SAP is anticipating huge need for ‘in-Canada’ service, sees customers switching from Oracle to HANA

German software giant SAP announced plans to open its first Canadian datacentre, which is being built in Toronto, one of Canada’s largest cities. SAP Canada’s managing director Bob Elliot said the move will help the company accommodate Canadian customers looking for in-country SAP cloud solutions.

“We’re seeing a growing demand for cloud based solutions from our Canadian customers. They want to take a step into the cloud, but they’re still nervous about this new way of doing things,” Elliot said.

“Our customers here range from government agencies to healthcare and financial services companies and almost all of them have strict data security requirements. They want the data housed on Canadian soil, because of confidentially issues.”

“We needed to accommodate that to grow the SAP business here,” he added.

The logic seems to be reflected in third party research, to some extent. According to IDC, 60 per cent of those buying cloud service prefer them to be delivered within Canada.

But the firm’s research also suggests buying in-Canada solutions ranked unusually low among a list of factors weighed up in the decision making process around cloud services.

“IDC believes that while the stated preference for in-Canada solutions is important in terms of relationship management, it is also a convenient excuse for other factors that revolve around knowledge and comfort with nontraditional vendors as well as inexperience in managing the reputational risk of outsourcing,” said Mark Schrutt, a Canadian outsourcing expert at IDC Canada.

The datacentre, SAP’s first in Canada, is scheduled to go live by the end of 2014, and according to Elliot will run will run a number of cloud solutions including SuccessFactors, and SAP HANA.

He explained the while cloud is still just a quarter of the size of its on premise software business, the company wants to grow the cloud segment five times as quickly. Part of that growth, he said would come from customers that want to switch away from Oracle’s relational databases and adopt solutions based on SAP HANA.

This is SAP’s latest effort to bolster its cloud services by building out its own datacentres. Earlier this year the company announced it would invest €20m in two new Russian cloud datacentres, and in June struck a deal with LG to set up an enterprise cloud computing centre in South Korea.

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