The user group conducted an online survey of its members in late March through mid-April to assess their thoughts on SAP’s cloud applications. The research drew responses from 100 SAP user organizations across the UK and Ireland, including a mix of public and private companies and a range of roles such as heads of information systems, lines of business and technologists.
“We are seeing a gradual adoption and reflection on [SAP’s] cloud solutions and platform among our members,” Paul Cooper, UKISUG vice chairman, tells ASUGNews. “We are not seeing massive shifts—we’re seeing an evolution—that’s been underlined by the [research] data.”
The Road to Cloud and S/4HANA
Digging into that data, 58 percent of those polled said they are currently using or planning to use SAP’s cloud offerings. Of those respondents, 39 percent have deployed or intend to deploy SAP’s Cloud for Customer software, the vendor’s take on cloud CRM.
Turning to the HANA-centric version of Business Suite, S/4HANA, 23 percent of those polled say they plan to use S/4HANA enterprise cloud edition. As we’ve previously reported, the numbers of companies investing in S/4HANA are expanding steadily (latest figures at 3,200+ customers), while the number of live deployments are growing slower (latest figures at 146 customers).
As for why SAP customers are moving to the cloud, Cooper hears UKISUG members share a variety of reasons. “For some people, they’ve come to a point where they’re looking at a refresh cycle and where they go over the next five years,” he says. “For others, they have a need for something particular, for instance, Concur.”
While the decision to adopt Concur may be a rapid one, Cooper stresses that investing in S/4HANA is much more involved. “People need time to reflect on what S/4HANA might mean for their business, where they might see the benefits,” he says. Companies are thinking through how the in-memory business suite might filter into their road maps in one to two to three years’ time, Cooper adds.
“It goes back to where you are in the lifecycle of products or infrastructure,” he says. “As soon as you’ve got used to something, the next thing comes along. There’s a lag time to gather intelligence. With S/4HANA, there was finance, then logistics, and there’s going to be a [customer] journey around it.”
Need for More S/4HANA User Stories
According to the survey, 52 percent of those polled were unsure that S/4HANA would make them more readily consider using cloud services from SAP in the future.
While SAP’s presentations on S/4HANA are increasing customer understanding of the new suite, what’s needed are more highlighting of early adopter success stories. “The thing our members thirst for is their peers talking about their experiences,” Cooper says. “SAP needs to be encouraging early adopters to talk about the positives of these solutions.”
Generally speaking, the survey found that 60 percent of respondents didn’t think that SAP has so far done a good job in communicating the user benefits of its cloud offerings. “They need to incentivize early [cloud apps] adopters and ramp up customers to start talking about the benefits to amplify what SAP is saying,” Cooper adds.
Cloud Benefits vs. Cloud Obstacles
According to the survey, the greatest benefit those polled see from migrating to SAP’s cloud offerings is a reduction in costs/capital expenditure, cited by 64 percent of respondents. “That’s not surprising; IT budgets are always under pressure,” Cooper says, and organizations like the flexibility they gain in the cloud to scale up or scale down their apps usage and hence their IT costs. The other top benefits were quicker deployment times (46 percent) and having greater mobile access to information (42 percent).
Turning to obstacles to cloud adoption, 57 percent of respondents pointed to their existing investments in on-premise applications and a lack of clarity around SAP’s product roadmap (52 percent).
The survey also revealed a lack of clarity around SAP’s cloud acquisitions, with 44 percent of those polled saying they do not understand where the acquisitions of Ariba, Concur, Fieldglass and SuccessFactors fit into SAP’s overall strategy. As an aside, Cooper notes that when UKISUG asked a similar question about SAP acquisitions and strategic fit back in 2012, the percentage of respondents saying they didn’t understand the benefits of those purchases was a good deal higher.
Another key customer concern voiced by 58 percent of respondents is that SAP’s emphasis on cloud will have a detrimental impact on on-premise users should future product innovations only take place in the cloud.
HCP Interest on the Rise?
The survey also asked respondents a number of questions about SAP’s HANA Cloud Platform (HCP), its in-memory platform-as-a-service. SAP has done a lot of work to interest developers in the PaaS, but more recently is positioning HCP as the extension and integration platform which will be common to all SAP solutions, whether on-premise or cloud.
As we found out in our December 2015 HANA adoption survey, customers have yet to embrace HCP. Of the 886 ASUG respondents answering the question whether they had tried HCP yet, only 14 percent said yes.
The UKISUG research revealed some user confusion over HCP. While 34 percent of respondents said they were currently using or planning to use HCP, in response to a question asking if they knew what HCP is, 32 percent said they didn’t know. Only 10 percent of those polled believe that SAP has done a good job in communicating the benefits and use cases of HCP.