Two years later, SAP's making ‘progress’ on clearing up S/4HANA ball of confusion

As German ERP biz cozies up to Microsoft in the cloud

By Rebecca Hill

Posted in Software, 29th November 2017 09:06 GMT

SAP is “getting there” with its efforts to address concerns around deployment of the latest version of its ERP business suite, according to S/4HANA COO Sal Laher.

S/4HANA was plagued by confusion over pricing, licensing, migration and deployment when it was first launched in 2015, and this has had an impact on both awareness and adoption of the suite.

The company’s struggles were demonstrated at last year’s UK and Ireland SAP User Group conference, when it was revealed that 12 per cent of organisations surveyed were unaware of the product, and only 37 per cent had plans to use it.

This year’s survey indicated a slight shift, with just 5 per cent unaware and 53 per cent indicated "plans" to use the product. Actual use, though, remained the same, at 5 per cent in both years.

Sitting down to talk to The Reg at this year's conference, in Birmingham yesterday, Laher said the company had been making a concerted effort to promote and explain the offering, noting big pushes at SAP’s Capital Markets Day and Sapphire conference in May.

On whether the firm had done enough to tackle confusion in the customer base, he said: “I think the answer is, we’re getting there. We’re making significant progress now.”

He pointed to the move to bring all ERP cloud products under one president, Darren Roos, and said that the confusion about different deployments had also been addressed.

“It was always the same product, it was just deployed on-prem, in private or public cloud,” Laher said.

But, he added, "it was confusing messaging, and we’re sorting that out. Our go to market next year will be absolutely 100 per cent clear on what we’re leading on, and we’ll be leading on cloud first, because that’s the marketplace.”

Laher also said that more large enterprises were now choosing S/4HANA - pointing to Shell, which has chosen SAP for its carbon business - and noted a 286 per cent growth in S/4HANA cloud in the latest quarter’s results.

However, overall, there was just a 19 per cent year-on-year increase in cloud bookings in the quarter ended September 30, which was markedly lower than the 33 per cent and 49 per cent growth for Q2 and Q1, respectively.

At the time, SAP execs argued that customers with large-scale transformations tend to close in Q4, and said were confident Q4 would see a return to increases “in the 30s”.

Laher was equally positive about the future for the cloud biz, saying that some customers were only just addressing their digital transformation strategies and starting “dipping their toes” in the cloud.

He added that SAP would “leapfrog” competition and win market share in the ERP marketplace, where he said “there’s only really a couple of large players”.

Meanwhile, SAP has announced an expanded partnership with Microsoft, which focuses on helping customers with their roadmap to cloud.

The deal will see the firms deploy each other’s cloud solutions internally, with Microsoft deploy S/4HANA on Azure for its internal finance processes and SAP moving its key internal business critical systems to Azure.

In addition, customers will be able to run S/4HANA in the Azure environment, and will gain access to documentation on the processes the firms themselves use for deployment.

“This is an arrangement to make sure S/4HANA cloud and products can be hosted on Azure, so we can deal with and continue to support customers who’ve already chosen Azure,” said Laher.

“But also, in countries with sovereignty or data privacy issues, we don’t have to have our own data centres - because we’re not in the data centre business - we can use Azure.” ®

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