Is SAP Abandoning On-Premise?

A Tale of Two Platforms

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Key Takeaways

⇨ There has recently been much discussion about SAP moving away from on-premise solutions

⇨ The confusing nature of the SAP S/4HANA landscape, and changing product names, complicates understanding of the situation

⇨ Organizations must be prepared and fully understand their needs and requirements before commencing discussions with SAP

There has been significant discussion surrounding SAP’s stance on cloud versus on-premise. The recent statement by DSAG board member Sebastian Westphal implies that SAP is focusing enhancements on the public cloud version of SAP S/4HANA in a push to accelerate cloud adoption. But beyond these statements, there also seems to be a growing concern among SAP customers about SAP increasingly deemphasizing its on-premise software solutions despite thousands of enterprise customers still using them.

Part of the concern stems from the different deployment options for SAP S/4HANA. While there are at least four different options for SAP S/4HANA deployment, these options may not be clearly understood by the broader SAP community.

There are also concerns that new enhancements and processes will only be launched in cloud-based solutions. However, according to SAPinsider research, as more than three-quarters of those planning a RISE with SAP S/4HANA Cloud deployment intend to use SAP S/4HANA Cloud, private edition, it does not make sense for SAP to only enhance SAP S/4HANA Cloud, public edition. But since SAP frequently only says SAP S/4HANA Cloud, there is often additional confusion among customers about whether that means SAP S/4HANA Cloud, public edition, or SAP S/4HANA Cloud, private edition.

SAP’s focus on the cloud is not going to change. Cloud has been the strategic objective since Bill McDermott was the CEO, and increasing cloud revenue is what investors and analysts expect in quarterly earnings. Any organization working with SAP must understand this will impact every interaction.

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