Large Cos To Move 46% of Their SAP Systems To Cloud

by CXOtoday News Desk    Jun 13, 2014

cloud growth

In the next two years  $39 billion of SAP landscape could move to the cloud, according to a research commissioned by HCL Technologies and conducted by Vanson Bourne. The global survey of 100 executives from large enterprises reveals that 46% of SAP customers are moving their applications and infrastructure in the cloud. The research also states that 45% of organizations have increased their SAP cloud investments over the past year and that they expect to nearly double these investments in the next 12 months.

The research notes that the migration is not just being motivated by potential cost savings, but also by business agility and speed (59%), access to new technologies (46%) and improved customer satisfaction (43%) - which are seen as big drivers.

“These findings clearly 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,” said Steve Cardell, President of Enterprise Services and Diversified Industries, HCL Technologies.

Cardell states that for those organizations looking to refresh their existing estates, reduce cost and access HANA-powered applications SAP’s cloud offerings are an attractive proposition. In fact, 56% of firms stated they expect to use SAP HANA Enterprise Cloud in the future, he said.

 When asked about the biggest inhibitors to moving more SAP applications and infrastructure to the cloud 30% of respondents noted integration challenges with existing systems, while 36% cited security concerns. This isn’t surprising considering 88% of organizations expected to adopt a hybrid model, while 45% stated that integration into their existing landscape had been their biggest cloud implementation challenge to date.

The survey also showed that organizations are in need of help when it comes to their cloud strategies, with only 18% stating they had a comprehensive cloud strategy.

“Cloud is undoubtedly disrupting traditional enterprise architectures. Organizations now have to contend with a multi-cloud environment in which they need to integrate SAP and non-SAP applications into their existing landscape. 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 organizations be able to overcome integration issues and truly realize business benefit,” added Cardell.

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 of organizations.