Business Cloud News

SAP sailingThe UK & Ireland SAP User Group has released findings from a survey which state only 58% of current SAP users are considering or using its cloud offerings, and 60% said the company were not good enough at communicating the benefits of their products.

The findings showed only 39% were using or planning to use SAP Cloud for Customer and only 23% planned to use S/4 HANA enterprise cloud edition. Just over a third confirmed they were currently or planning to use SAP’s HANA Cloud Platform (HCP), though 32% said they didn’t know what was, and 10% said they believed the company did an effective job of outlining the benefits and use case of the product itself. Overall, 60% of the user group said the company was not good enough at communicating benefits of the cloud suite to the users themselves.

“Over the last 18 months, we have seen more of our members looking to move elements of their SAP estate to the cloud. However, as the survey results show, users still face challenges when it comes adopting SAP’s cloud offerings,” said Paul Cooper, vice-chairman of the UK & Ireland SAP User Group. “For organisations that have heavily invested in on-premise applications in the past, there still needs to be an attractive business case for them to move to the cloud.

“If users are to fully realise the benefits of SAP cloud offerings, they need to understand the company’s roadmap and strategy. For instance, the survey highlighted that just over half (52%) of respondents were unsure that S/4HANA would make them more readily consider using cloud services from SAP in the future.”

While cloud computing as a concept could be perceived as penetrating the mainstream market, it is worth remembering there is a substantial proportion of organizations that are not in a position to make the transition currently. 58% of respondents said they were concerned the strong focus on cloud computing from SAP could result in installed on premise products being left being left behind, and the users of such products missing out on product updates.

Another area which may worry SAP is that of acquisitions, as 44% of respondents highlighted they were not sure as to where SuccessFactors, Ariba, Fieldglass and Concur would fit into future strategies of the business. Concur Technologies was acquired for $8.3 billion, Ariba for $4.3 billion, SuccessFactors for $3.4 billion and Fieldglass for $1.1 billion (estimated).

“SAP is committed to helping deliver business value to all its customers and we welcome the feedback from the UKI User Group,” said Kevin Kimber, Head of Cloud at SAP UK&I. “At SAP, all our solutions can be tailored to our customers’ individual needs – whether that involves on premise, cloud or hybrid models. By offering this flexibility we can support our customers on their individual cloud journey which varies across industry and user.

“We’re encouraged by the results of the survey that show that the majority of SAP users are either already using or planning to adopt our cloud offerings. We believe SAP provides the most complete end to end holistic cloud portfolio and we continue to strive to enhance our offerings through strategic acquisitions and sustained investment with the goal of providing best of breed cloud solutions. We’re committed to engaging in an active dialogue with our customers and the wider ecosystem to share our vision and roadmap for cloud solutions and will continue to promote this message publicly.”

SAP reported its quarterly earnings last month, in which it was highlighted cloud subscriptions and support revenues grew 33% year-on-year to €678 million, and new cloud bookings grew at 23% over the quarter to €145 million. The cloud business, as well as software support revenues, accounted for 69% of the quarter’s total revenues.

The cloud business unit within SAP has been prioritized as the growth engine, though it might be considering a worrying sign for SAP executives that the cloud offerings themselves are not being communicated to their current customer bases who are reportedly confused about the company’s future direction.