6 minute read
Meet the Experts
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Eric Pawlowski
Expert since 2023 -
Key Takeaways
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Business drivers for adopting public cloud, especially for SAP S/4HANA
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Selecting the right cloud for their business
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Ensuring agility and security with a TCO advantage
In this session, The Tile Shop Director of Infrastructure, Eric Pawlowski, is joined by Protera to discuss their accelerated migration timeline and provide insights on their move to the cloud. Attendees will be able to leverage these insights to better understand and review options for modernization using the cloud within their own organizations.
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Cloud Revenue and AI Powers SAP to Strong Q2SAP continued their strong performance in the first quarter with an equally robust performance in the second quarter of 2024. The current cloud backlog increased by 28% to €14.8 billion at constant currencies. Currently cloud backlog is defined as the contractually committed cloud revenue that SAP expects to recognize over the upcoming 12 months based on existing cloud subscription contracts. Cloud revenue was up 25% to €4.1 billion, and Cloud ERP Suite revenue increased 33% to €3.4 billion, making up the bulk of cloud revenue.
Considering SAP’s efforts to restructure and integrate business AI across its entire suite of solutions, it is no surprise that CEO Christian Klein emphasized this during his opening remarks on the earnings call. A significant point for Klein was that AI strategy played a key role across the company, and that almost 20% of all deals in the second quarter included premium AI use cases. While Klein was unclear on the methodology for measuring premium AI use cases, or the associated product portfolio components that benefited from this impact, he highlighted that SAP’s AI investments are already helping drive revenue.
The earning call did not mention either SAP S/4HANA or RISE with SAP adoption numbers. At Sapphire, SAP’s Chief Revenue Office, Scott Russell, indicated that there were 6,000 customers running RISE with SAP. Neither Klein nor Asam provided an updated figure although Klein highlighted that almost 1,500 customers were now running GROW with SAP, an offering targeted at small or medium-sized enterprises or those not already running an SAP ERP solution. GROW with SAP is tied exclusively to SAP S/4HANA Cloud Public Edition, but the contracts and bundling are mostly identical to RISE with SAP.
While organizations are increasingly using GROW with SAP, 60% of the customers licensing the solution this quarter were net new. This is understandable considering that GROW with SAP is designed for customers who are not using an SAP ERP or want to use a new implementation in a multi-tenant public cloud environment. In fact, Klein highlighted that GROW with SAP is ideally suited for greenfield deployments, net new customers, or subsidiaries of organizations already using SAP S/4HANA or RISE with SAP.
SAPinsiders must be prepared for a cloud-based future if they want to continue using SAP solutions. While not all organizations have moved their SAP workloads to the cloud, SAP’s ongoing improvements and functionalities are centered here. Failing to prepare for this shift, whether it involves moving to a different ERP provider or a third-party support service, could result in significant cost and complexity.
Julia White Appointed CMO at AWSLess than three months after her exit from SAP, Amazon has appointed Julia White as its new Chief Marketing Officer and Vice President of Amazon Web Services (AWS).
Prior to her role as the Chief Marketing and Solutions Officer at SAP, White spent nearly 20 years at Microsoft, with her last role as Corporate Vice President responsible for product marketing for Microsoft Azure, Developer Tools, and Platforms. Combined with her three-year stint at SAP in which she focused on cloud and AI messaging, White brings significant experience and expertise to her new role at AWS, also highlighted by AWS CEO Matt Garman who emphasized White’s “extensive experience with cloud, AI, and product messaging and positioning” in a memo to AWS employees. Garman also indicated that White would be joining his leadership team and will succeed Raejeanne Skillern, CMO since July 2023 and whose departure was announced in the same memo.
Although White secured this new role not long after leaving SAP, NICE had announced that they had appointed White’s colleague and executive board member Scott Russell to replace retiring CEO Barak Eilam even before he left SAP. Russell will take over as the chief executive officer of NICE on January 1st, 2025.
3 minute read
Journey to a Clean Core with SAP Cloud ERP Part 2Unlock the full potential of your organization's transition to cloud ERP with SAP Signavio. Seamlessly align processes with current operational demands, driving agility and ensuring a successful business metamorphosis. Our intuitive platform identifies areas ripe for enhancement, streamlining operations while eliminating redundant processes. Join our session to discover actionable insights on maximizing value through process optimization, leveraging SAP Signavio Process Insights for superior business outcomes. Gain expert guidance on fostering continuous process improvements and enhancing collaboration between business and IT stakeholders. Bridge the gap between vision and execution with SAP Signavio & LeanIX, empowering your team to achieve operational excellence. Elevate your business to new heights – register now.
1 minute read
Strong Cloud Revenue Propels SAP in Q1SAP opened 2024 with a strong start, the first quarter results laying a solid foundation for the remainder of the year. The strongest growth area was the current cloud backlog (CCB), which grew 28% at constant currencies to €14.2 billion. This was followed by cloud revenue with a 25% increase at constant currencies to €4 billion. SAP also saw strong growth in Cloud ERP Suite revenue that increased 32% at constant currencies to €3.2 billion. With this performance SAP has confirmed guidance for the full year as well as 2025 financial ambitions.
Cloud ERP Suite revenue, a new metric SAP started reporting this quarter, refers to the portfolio of software-as-a-service (SaaS) and platform-as-a-service (PaaS) solutions tightly integrated with core ERP solutions, included in packages like RISE with SAP. The following offerings contribute to Cloud ERP Suite revenue: SAP S/4HANA Cloud, SAP Business Technology Platform (BTP), core solutions for HR and payroll, spend management, commerce, customer data solutions, business process transformation, and working capital management. SAP earlier reported separately on SAP S/4HANA Cloud revenue, but it made up only a portion of what is now the broader Cloud ERP Suite reporting number. SAP will also report a Cloud Extension Suite number including the remaining SaaS and PaaS solutions that supplement and extend Cloud ERP Suite.
While there are no specific numbers in the quarterly report, Klein emphasized that business AI influenced many first quarter deals. This was also underscored by both Klein and SAP’s Chief Revenue Officer, Scott Russell, who highlighted that AI is a topic of discussion in all C-level conversations occurring today. But Klein also emphasized that there are now 27,000 customers using business AI although most of these are likely to be using the embedded AI scenarios within solutions like SAP S/4HANA where there are over 200 AI use cases available today.
For customers that have remained on the fence about cloud ERP adoption, the window is rapidly closing on moving to SAP S/4HANA outside a cloud environment, if it has not already closed completely. Cloud ERP Suite is now the sole focus of the SAP customer success team and CRO, Scott Russell. Organizations running any on-premise ERP systems are being considered as potential opportunities to increase cloud revenue at a multiple of the existing on-premise maintenance value. SAP is also exploring selling additional services up to seven times the value of the initial investment as these customers transition to the cloud.
SAPinsiders must be prepared for the future as SAP will continue to focus on cloud ERP and business AI use cases connected to the broader suite of cloud solutions. This is where executives have stated that development investments will focus, and updates and announcements only reinforce these statements. This means customers must start preparing for the future, today.
5 minute read