By Freya Purnell
Large enterprises plan to migrate 46 per cent of their existing SAP on-premise environments to the cloud in the next two years, representing $39 billion in license revenue, according to new research from HCL Technologies.
The global survey of 100 executives from large enterprises around the world around the world revealed that 45 per cent of organisations have increased their SAP cloud investments over the past year, and that they expect to nearly double these investments in the next 12 months.
These plans are not just motivated by potential cost savings, as the research highlights business agility and speed (59 per cent), access to new technologies (46 per cent), and improved customer satisfaction (43 per cent) as key drivers.
Steve Cardell, president of enterprise services and diversified industries, HCL Technologies, said the findings 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 per cent of organisations stated they expect to use SAP HANA Enterprise Cloud in the future,” said Cardell.
Among the reasons against moving more SAP applications and infrastructure to the cloud, 30 per cent of respondents cited integration challenges with existing systems, and 36 per cent said they were discouraged by security concerns. Integration into their existing landscape was also the biggest cloud implementation challenge to date for 45 per cent of respondents.
While only 18 per cent stated they have a comprehensive cloud strategy in place, there is certainly a place for both cloud and on-premise deployments for most organisations, with 88 per cent of organisations expected to adopt a hybrid model.
“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,” said Cardell.
“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.”
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 per cent) of organisations, with 30 per cent of organisations saying their existing investments in on-premise and legacy systems had been an inhibitor to moving more SAP applications and infrastructure to the cloud.
