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What is SAP Cloud Strategy?
SAP has both financial and software targets behind their medium and long-term cloud strategy. Their financial target, as initially announced during their Q3 earnings presentation in 2020, involves achieving €22 billion in cloud revenue by 2025. From a software and technology standpoint, SAP is looking for customers to adopt cloud-based solutions for all their SAP applications. This may simply involve using cloud-based infrastructure such as that available through SAP HANA Enterprise Cloud or with the hosting capabilities of RISE with SAP, or could involve using an entirely cloud-based application such as SAP S/4HANA Cloud.
What is SAP Cloud Strategy?
SAP has both financial and software targets behind their medium and long-term cloud strategy. Their financial target, as initially announced during their Q3 earnings presentation in 2020, involves achieving €22 billion in cloud revenue by 2025. From a software and technology standpoint, SAP is looking for customers to adopt cloud-based solutions for all their SAP applications. This may simply involve using cloud-based infrastructure such as that available through SAP HANA Enterprise Cloud or with the hosting capabilities of RISE with SAP, or could involve using an entirely cloud-based application such as SAP S/4HANA Cloud.
SAP Cloud Strategy is focused on allowing customers to choose their provider while SAP offers and manages the cloud services. This is particularly true with their RISE with SAP offering where there is a single contract with SAP for the services and their management, but organizations choose who their hosting and implementation partner will be. SAP has close relationships with all of the major public cloud providers, typically referred to as hyperscalers, but there are many other hosting partners and cloud providers who are SAP partners and offer cloud services.
Further Resources for SAPinsdiers
SAP’s 2022 Strategy Focuses on Cloud ERP and RISE with SAP. Although SAP has had cloud targets in place as their 2025 objectives and has been reinventing itself as a cloud company since the late 2010s, their focus has shifted towards moving customers towards cloud ERP—software-as-a-service solutions like SAP S/4HANA Cloud—and RISE with SAP. This article explores what SAP has announced and their 2022 strategy focus.
Enterprise Cloud Deployment 2021 Benchmark Report. More and more organizations are moving SAP workloads to the cloud, with 88% of respondents running at least one workload in the cloud. Many of these workloads are solutions like SAP Success Factors, SAP Concur, or SAP Ariba which are entirely cloud-based, but there is also an acceleration in moving workloads like ERP systems to cloud infrastructure.
Cloud Success Requires a Clear Vision. The primary focus of organizations moving to the cloud is around reducing costs, increasing flexibility and scalability, and deploying applications more quickly. However, taking the time to understand what you are trying to achieve with your move to the cloud is an important step that organizations don’t always complete. This article talks about the steps that you can take to ensure that you’re having the right conversations ahead of your move to the cloud.
Moving to the Cloud is About More Than Infrastructure. Although initial cloud deployments focused on infrastructure, there has been a shift in the business case behind why organizations are moving to the cloud. Effectively utilizing data should be a key consideration when moving to the cloud as this is the most valuable asset your company has. This article discusses how business cases are changing, and how you should be looking at your cloud provider as an innovation partner in addition to the other services they provide.
Vendors offering cloud services for SAP include: Atos, AWS, Dell Technologies, Google Cloud, HPE, IBM, Lenovo, Microsoft, Navisite, NTT Data, Nutanix, Rackspace Technology, Virtustream, and VMware.
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Strong Cloud Revenue Propels SAP in Q1Apr 24, 2024 — SAP 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.
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Journey to a Clean Core with SAP Cloud ERP Part 2May 2, 2024 — Unlock 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.
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Building your Roadmap to Cloud ERP with a Clean Core Powered by SAP Signavio – Part 1Apr 24, 2024 — Unlock 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.
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The Reality of SAP in the Multi CloudJun 27, 2023 — For many organizations today the journey to the cloud has spiraled into cloud chaos which has resulted in a mixture of highly fragmented cloud strategies and silos that have a significant impact on strategic systems like SAP. This webinar explores how that cloud chaos can be addressed and how to embark on the next phase of the journey—becoming cloud smart with a focus on better managing SAP systems and workloads throughout the journey. We will discuss how to create optimal deployment strategies and how to architect tools and processes that will enable the creation of a more comprehensive cloud strategy that spans the multi-cloud.
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Why Cloud? Why Now?Jun 20, 2023 — 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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Video: Moving to the Cloud is About More Than InfrastructureDec 5, 2022 — Organizations are moving their SAP workloads to the cloud, either by replacing legacy hardware with flexible and scalable cloud infrastructure or with the adoption of cloud-based applications. But today’s cloud investments must provide more than just new and faster infrastructure, as organizations look to make those investments the basis for broader innovation.
In this video interview with Mike Harding, Google Cloud Partner Manager for SAP at Google Cloud, and Dinesh Vandayar, Go-to-Market Lead for RISE with SAP at Google Cloud, we discuss how organizations are looking beyond infrastructure to how their cloud investments can provide a platform for innovation.
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Video: Leveraging Edge Computing to Simplify and ScaleNov 21, 2022 — While centralizing systems to create a single source of business and financial truth within the organization is a key driver for moving to solutions like SAP S/4HANA, there are potential downsides to having every transaction relying on one central system. Part of that issue can be the lag involved with accessing a central system, while another may be the increased load that occurs on that central instance. So, while centralization is occurring, other technologies like edge computing can also be leveraged to deliver high performance while managing complexity.
In this video interview with Matt Thoman, Product Manager and Retail Solution Owner at Vertex, and Eric Christian, Principal Architect of Edge Solutions at Vertex, we discuss the value that edge computing can bring to SAP environments, and how it can help make a centralized system feasible.
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What has RISE with SAP taught us about optimizing your SAP journey to the cloud?Sep 22, 2022 — Many SAP customers are still considering their roadmap for SAP S/4HANA while at the same time planning for their next infrastructure refresh. But these decisions involve choices about the licensing model for SAP S/4HANA (perpetual vs. SaaS), what sort of deployment model is best (brownfield, greenfield, or something in between), whether to link the move to SAP S/4HANA with a move to the cloud, and what sort of cloud infrastructure to use.
In this webinar, we will share what we have learned from assisting and advising our customers about the options available. We will discuss observations, recommendations, and key takeaways from experience gained over the last 18 months engaging with customers from the early stages of their journey with RISE with SAP and SAP S/4HANA, through implementation and managed services, and their migration to the cloud.
Attend this webinar to:
• Learn about RISE with SAP and its pros and cons compared to a native cloud option
• Understand how to prepare for a RISE with SAP project
• Identify and apply key considerations when comparing the different options for moving to the cloud and SAP S/4HANA
• Hear about the experiences of other customers who have evaluated and used RISE with SAP
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SAP Sees Strong Cloud Growth in 2022 Q2Jul 26, 2022 — In SAP’s second quarter earnings call for 2022, the organization announced a 34% jump in cloud revenue, 24% at constant currencies, making it SAP’s largest revenue stream. Current cloud backlog, contractually committed revenue that SAP expects to recognize over the coming 12 months, also exceeded €10 billion for the first time ever. Much of this […]
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