SAP customers making the jump to cloud will have to adopt standardised processes and drop customisations, according to a senior veep.
The German software business has already made the brave move of telling investors it was slashing revenue expectations to buy itself time to "accelerate the technical migration of our customers' most important business applications to the cloud," as CEO Christian Klein put it.
But for many customers, it will be anything but a simple technical migration. Those who have made modifications to the software to fit their business will be in for a rude awakening as they consider the leap to the cloud, where standard – if configurable – systems are the name of the game.
Speaking to a UK and Ireland SAP User Group (UKISUG) webinar last week, Oliver Betz, SVP head of product management for SAP S/4HANA, said: "I'm a true believer in the cloud as the future state-of-the-art model. However, that requires standardisation which needs to happen on the customer side: they have to agree on standardised processes. You cannot have these modifications that you had in the on-premises world, that's not how the cloud works. You will go in a direction where you have quarterly or at least twice per year releases, which you have to absorb and agree to."
He likened these updates to the ones dished out to Microsoft Office customers, which users cannot realistically avoid.
While adopting standardised processes may make sense on a whiteboard, few envy the CIO who has to tell business units to change the way they work because a software upgrade says so.
But SAP is also promising to make its upgrades easier to consume, avoiding the daunting mega-projects with a more modular approach to new solutions to give customers flexibility in how they adopt the software.
And in the medium term, the enterprise software giant says it will give customers choice over remaining on-premises, lifting to the cloud only as an infrastructure choice, or moving to a cloud subscription model.
Clarifying questions over whether customers could continue to be able to use on-premises licences in the cloud, a SAP spokesman said customers could retain licences and continue to pay maintenance, transferring the software to a managed service (IaaS) that customers purchase separately, a so-called "Bring Your Own License" to a partner-hosted service.
Alternatively, the user could terminate licence and maintenance for existing on-premises software and follow SAP's "Cloud Extension Policy", purchasing cloud software subscriptions instead. That option also terminates use rights of the on-premises licence contract and reduces the maintenance base and fees, the spokesman said.
While cloud is the undeniable direction of travel, SAP customers were also wary of avoiding lock-in with their cloud provider, said R "Ray" Wang, principal analyst and founder of Constellation Research, who was also on the UKISUG call.
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"We're starting to see a fear of vendor lock-in in the cloud because you don't own the software so you can't say 'I'm not going to pay for maintenance' and keep holding on to the software for as long as you own that product. Once you move to the cloud, you lose that option. I never thought I'd hear that from customers. But some of the early cloud adopters for some types of software are saying to themselves, 'maybe we should own this and ride it out to the very end'."
However, customers will have to bite the bullet one way or the other as SAP sees its future in cloud/subscription software.
On-premises is "not sustainable in the long run unless you're going to build your own ERP system as Tesla did. Not every company is going to be a Tesla," Wang said. ®