SAP dangles juicy carrot to pull users on board with cloud-first vision

Limited-time offer may reduce cost of migration by up to 50%

SAP is rolling out an incentive package to encourage users to adopt its cloud transformation programs, RISE with SAP and GROW with SAP.

The ERP giant – which boasts customers including Walmart, Disney, and AirBus – is offering "financial incentives" to help every customer move to the cloud and "maintain the pace and level of innovation that cloud enables."

In a statement, the €31.2 billion revenue company said it planned to help customers offset migration and transformation costs of moving on-prem and legacy applications to the cloud.

"To recognize the investment made by SAP customers and to help offset the cost of migration and transformation, SAP is announcing a limited-time offer that may reduce the cost of migration up to 50 percent and shorten the time to value," the company said in a statement.

Until the end of the year, customers adopting the RISE with SAP or GROW with SAP lift-shift-and-transform packages would have access to credits that they can use to offset the cost of maintenance, cloud services, or cloud subscriptions.

The deal will apply to S/4HANA and ECC customers, the two most recent iterations of the core ERP software, while the credits could be used to buy SAP S/4HANA Cloud and line-of-business solutions such as supply chain, human resources, spend management, CRM, business transformation tools, and the Business Technology Platform (BTP) for extensibility.

Last year, SAP received a volley of criticism from users in the UK and its German-speaking heartlands after CEO Christian Klein doubled down on his cloud-only innovation message for future development.

"Our new innovations will not be available for on-premise [sic] or hosted on-premise ERP customers on hyperscalers," he told investors.

The move angered users, who saw it as reneging on a promise from product engineering lead Thomas Saueressig, who said in 2020 that the S/4HANA platform was "the architecture and platform of the future for our customers" without detailing caveats about whether the software runs on-prem or in the cloud.

Users have struggled to warm to the RISE with SAP concept, which offers SI services, cloud infrastructure, and business transformation in a single package signed with SAP, yet the company sees it as a vital program in getting investors to see it as a cloud-first business.

The Register has asked the German software firm for more details of the incentive deal and why the company wants to introduce it now.

Paul Cooper, chair of the UK and Ireland SAP User Group, said he was pleased to see SAP had listened to the concerns of users. "The RISE with SAP Migration and Modernisation Programme is a welcome first step and the financial incentives will help current ECC customers make the business case for moving to the cloud. We will be canvassing the opinion of members who made the move to S/4HANA on-premise, to see if the financial incentives offset the additional costs they will incur from moving to the cloud in order to access the latest innovations. We look forward to understanding the details, but this is definitely a move in the right direction."

Cooper said that due to the complexity and criticality of user implementations, there will still be "a significant number of on-premises customers who won't be moving their core SAP system to RISE."

"For those organizations, being able to access the latest innovations through BTP will be important if they are not to be left behind. This is an area we will continue to push SAP on, as we are led to believe that there is no technical reason why this isn't possible," he said.

In a statement published with the SAP announcement, DSAG, the German-speaking user group, said SAP recognized the complexity of the challenges that customers face when transitioning to the cloud.

DSAG executive board member Christine Grimm said: "SAP is reaffirming its promise to actively support customers on their journey to the cloud and thus make the transition easier. At DSAG, we appreciate this initiative and the willingness shown by SAP. The aim must be to further improve and expand this offering in collaboration with SAP in order to take into account the complex requirements and challenges of our members who are deciding in favor of a transformation process to the cloud. In doing so, we want to ensure that they benefit fully from the extended possibilities and innovations of the RISE with SAP offering." ®

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