Thursday, 12 June 2014 22:37

$39 billion SAP shift to the cloud predicted Featured


A global survey of SAP users has predicted that US$39 billion of SAP deployments could move to the cloud in the next two years, with large enterprises planning to migrate 46% of their existing SAP on-premise environment.

According to a survey of 100 executives from large enterprises conducted by Vanson Bourne for ICT services company HCL Technologies, 45% of organisations have increased their SAP cloud investments over the past year and expect to nearly double these investments in the next 12 months.

HCL President of Enterprise Services and Diversified Industries Steve Cardell says migration to the cloud isn’t just being motivated by potential cost savings, with the research highlighting business agility and speed (59%), access to new technologies (46%) and improved customer satisfaction (43%) as big drivers.

“These findings clearly demonstrate that there is a market shift towards moving a greater proportion of existing SAP environments to the cloud.

“Improved business agility and speed is undoubtedly a big driver, as is the growing maturity and availability of new cloud-based technologies.  For those organisations looking to refresh their existing estates, reduce cost and access HANA-powered applications SAP’s cloud offerings are an attractive proposition. In fact, 56% of organisations stated they expect to use SAP HANA Enterprise Cloud in the future.”

When asked about the biggest inhibitors to moving more SAP applications and infrastructure to the cloud, 30% of respondents noted integration challenges with existing systems, while 36% cited security concerns.  

Cardell says this isn’t surprising considering 88% of organisations expected to adopt a hybrid model, while 45% stated that integration into their existing landscape had been their biggest cloud implementation challenge to date.

And, Cardell said the survey also showed that organisations are in need of help when it comes to their cloud strategies, with only 18% stating they had a comprehensive cloud strategy.

“Cloud is undoubtedly disrupting traditional enterprise architectures. Organisations now have to contend with a multi-cloud environment in which they need to integrate SAP and non-SAP applications into their existing landscape.  This has ultimately made integration and cloud orchestration a key concern. Only by taking a lifecycle view of cloud enablement, from assessment right through to service delivery, will organisations be able to overcome integration issues and truly realise business benefit.”

Cardell says the survey also revealed that SAP’s Cloud Extension policy, which enables the partial termination of existing on-premise software licenses and associated maintenance costs, has made moving to the cloud “a more attractive prospect for nearly three-quarters (74%) of organisations.”

“These findings are perhaps unsurprising given that 30% of organisations said their existing investments in on-premise and legacy systems had been an inhibitor to moving more SAP applications and infrastructure to the cloud.”

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Peter Dinham

Peter Dinham - retired in 2020. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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