back to article SAP: Come to the cloud with us, we promise there's total accountability and lower TCO with lift-and-shift ERP package

SAP has launched a lift-and-shift-to-the-cloud service for customers' on-premises ERP systems, taking accountability for performance and promising lower costs. The service is meant as a stepping stone for businesses onto more standardised processes, and, naturally, upgrading to SAP's S/4HANA ERP system. The move follows …

  1. AMBxx Silver badge

    Getting desperate

    Looks like they've got so much promo stuff left over that they're trying to raise a few €

    SAP Merchandise

  2. Korev Silver badge

    “Our data suggests that there is a very large level of inertia amongst SAP customers, far more than many other ERP products. They are happier, and satisfied with the current system,” he said.

    You mean they're scared about what will break with the upgrade or how much it'll cost?

  3. Pascal Monett Silver badge
    Facepalm

    "an attractive model for the customer to convert maintenance into the cloud subscription"

    An attractive model would be one where the customer's customizations, which they have already spent millions on, would work in The Cloud (TM).

    I hardly see anything attractive in moving to The Cloud (TM) just to shore up your revenue line when it will totally disrupt everything your customers have built their business on.

    Tell me, is this plan from the CEOs nephew who just got his MBA ?

    How can you be stupid enough to create a cloud platform that totally ignores your customers' needs, and then be surprised that it is not widely adopted ?

    1. Anonymous Coward
      Devil

      Re: "an attractive model for the customer to convert maintenance into the cloud subscription"

      "How can you be stupid enough to create a cloud platform that totally ignores your customers' needs, and then be surprised that it is not widely adopted ?"

      You forgot it's SAP we're talking about here.

  4. Denarius

    inertia ?

    s/inertia/despair/g

    Users long ago given up any hope of a usable interface, let alone concise information

  5. Freddellmeister

    "CFO Luka Mucic said at the time that the cloud model would increase customer lifetime revenue. "We are effectively expanding our share of the wallet," he told investors."

    ....

    Saueressig (Product Engineering) meanwhile "committed to the total cost of ownership being lower in the cloud than comparable current payments."

    CFO claims this will make SAP more money, Engineering, what wait a minute..

    game over.

    1. sgp

      You would think their existing customers would finally see through the nonsense of these clowns. However they'll probably just double down on their mistakes. See IBM still being around.

    2. Graham 32

      You can have both. SAP needs to provide more to the customer ("share of the wallet"), and undercut whatever the customer was previously using (lower TCO). If, big if, the SAP cloud servers are cheaper to run than whatever the customer had before then it could meet both those statements.

  6. steamnut

    Which is it?

    So, they say: " the cloud model would increase customer lifetime revenue. We are effectively expanding our share of the wallet" and then "the total cost of ownership being lower in the cloud than comparable current payments.". Which is it as is cannot be both?

    They also say "We want to give [customers] a helping hand now to move them to the cloud.." Sure they do.

    This all sounds like they have been reading from the Oracle book on how to make more money from your users. They are trying to get it's users to use standard products in their cloud and with no customisation. Some users have years of investment in making SAP work the way they want (or best possible) and will be very reluctant to use SAP's standard template offerings. If they believe that "the total cost of ownership being lower in the cloud than comparable current payments." then it sounds like a bait and switch operation.

  7. SecretSonOfHG

    Let me summarize this for you

    1- ERP market is close to saturation, hence SAP cannot grow profits by selling more licenses, and the annual license manteinance fees, while substantial, will remain essentially flat in the future.

    2- The capex cost of running SAP on premises is starting to look ridiculous in comparison with the cloud costs. Not to mention the lack of flexibilty, staff costs, etc. So much that more and more business are starting to devaluate the "single source of truth" idea as one that is either unattainable, extremely costly or just not valuable enough. Business agility requires processes to be resilient and adaptable, and a single monolithic solution is not. So SAP is not being considered for new deployments.

    3- Customers will not touch a single bit in their existing SAP installation if that means even the slightest change on their business processes or SAP customization, which are the result of years of costly, painstaking and complex compromises between the so called "SAP best practices" and the real world. In practice, nobody wants to hear anything about SAP version upgrades or migrations.

    With all the above considerations, the "lift and shift" to the cloud is their only option if SAP wants to keep growing profits. Make them move "as is" to the cloud and then force them to move to a higher SAP version (sorry, your "lift and shift" app will not be supported on....) and/or increase revenue by raising cloud fees (now that you've moved to the cloud, where will you run your SAP instances if not on our cloud?)

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