Is SAP shifting from a cloud-first to a cloud-only mentality?

SuccessFactors is only available as a cloud-based application and SAP HCM on premise will stop being supported in 2025. At that point, S/4 HANA will not include HCM and the only way to get HR functionality from SAP will be via SuccessFactors in the cloud.

This is in line with many other software companies  around the world, and Gartner predicted that “by 2019, more than 30 percent of the 100 largest vendors’ new software investments will have shifted from cloud-first to cloud-only.”

Changes are taking place in the hardware and data centre world too.  According to a study by Cisco, by 2018 “more than four-fifths of all data centre traffic, 83 percent, will be based in the cloud.”

In September 2016, Forrester increased their 2015 prediction for revenues from cloud by 23%.  “we project that revenue from public cloud platforms, business services, and software-as-a-service applications (SaaS) will grow at an overall CAGR of 22% between 2015 and 2020, reaching $236 billion.”

Likewise, Gartner states that “the infrastructure as a service (IaaS) market has been growing more than 40 percent in revenue per year since 2011, and it is projected to continue to grow more than 25 percent per year through 2019.”

They go on to say that “by 2019, the majority of virtual machines (VMs) will be delivered by IaaS providers. by 2020, the revenue for IaaS and platform as a service (PaaS) will exceed $55 billion — and likely pass the revenue for servers.”

In their heart of hearts, most people already know that a complete on premise strategy is simply unsustainable, and many have started to make the move by opting for cloud-based niche solutions where appropriate.

But one could argue that those who are moving “as and when needed” are missing the point.  

If the productivity and efficiency benefits promised by cloud-based apps all come to fruition, then surely those early adopters will gain competitive edge.

For those readers who are considering if/when/how to migrate SAP to the cloud, take a look at our eBook in which we explore the typical issues raised and alternative solutions.

We’ve been working with cloud hosting provider, T-Systems, and met many business leaders who are contemplating moving SAP to the cloud.  In their deliberations there are 8 common themes: cost justification, security, and more.  Find out about their concerns and our recommended solutions by reading our eBook “Cloud migration: 8 barriers to moving SAP to the cloud – and how to overcome them.”