SAP S/4HANA Cloud interest increasing

Nancy J. Delong

S/4HANA Cloud is SAP’s SaaS version of its upcoming-technology ERP system.

The mother nature of SaaS computer software allows it to be up to date frequently, and S/4HANA Cloud follows a quarterly launch routine, with new characteristics additional in just about every launch.

SAP does not provide certain quantities on how several buyers subscribe to S/4HANA Cloud, but it promises that the variety of customers is rising. The latest version — SAP S/4HANA Cloud 2008 — went live at the starting of August, with new characteristics for project-primarily based revenue recognition, offer chain demand from customers inventory management and billing for experienced providers.

In this Q&A, Jan Gilg, SAP president of S/4HANA, discusses the latest state of S/4HANA Cloud adoption. The COVID-19 disruption was a aspect in the latest launch, as enhancement teams experienced to negotiate the new truth of distant or house get the job done. This did not influence the launch roadmap, Gilg reported, and all the updates that were being promised were being included in the launch of S/4HANA Cloud 2008.

What is the latest position of S/4HANA Cloud adoption? Have there been substantial new purchaser wins?

Jan Gilg: Right after Q2, we are now at much more than 14,600 S/4HANA accredited buyers and 7,400 are live. Which is a blend among on premises and cloud. We do not split out the quantities, but we see substantial raise in the variety of cloud buyers, and I believe also in the course of COVID now, there is a apparent change towards private cloud, but also public cloud is rising.

Is there bigger interest in the SaaS S/4HANA Cloud due to the fact of COVID-19?

Jan Gilg, president of SAP S/4HANAJan Gilg

Gilg: A single appealing matter that we’ve seen is that usage essentially went up for existing buyers in the cloud in the course of COVID. We’re not positive why that was, but people are performing from house and logging in to the system much more than at any time. We’re observing a great deal of inquiries in cloud in common. Very first, from a industrial viewpoint, buyers are understandably shying absent from large upfront commitments right now and they are looking much more for a subscription design. So that is definitely the dominant design at the moment that we are observing.

On the complex aspect, the guarantee of rapid implementation and standardization is definitely captivating. It can be specially captivating for web-new buyers that are starting off from scratch and want to seem into a SaaS option. For the installed base, it can be nonetheless on the fence due to the fact of customizations that they have. Often, they never want to get started the total transformation however, but they want to standardize [on the cloud] at some point in time. There’s also a very little little bit of a divide listed here where by installed buyers are deciding on private cloud whereas web-new are likely public cloud.

How are installed buyers deploying S/4HANA? Are they totally changing on-premises devices or probably employing S/4HANA Cloud in hybrid environments?

Gilg: We see all different situations, frankly. We see a great deal of our larger sized buyers like Colgate and other individuals seem into all those sort of subsidiary or hybrid situations, where by you operate either a subsidiary or probably a certain M&A [acquired company] on the cloud. We see that quite a little bit, but we also see that mainly higher midmarket organizations go with the full system into SaaS. If you chat about the Fortune five hundred or Fortune 1000 organizations, most of them are nonetheless looking into private cloud and on-premises set ups.

What is the breakdown of deployments that are public cloud as opposed to private cloud?

Gilg: Primarily, the installed base is focusing on private clouds, and we never see as significantly web-new likely into private cloud. That essentially matches what we see from analysts that the marketplace is obviously likely into the SaaS cloud and that is what we see when we chat to new buyers and some of the rapid progress organizations. They are all looking into totally SaaS ERP remedies. In our installed base, there is quite some interest in the private cloud, but they usually also believe about carrying out this probably for a part of their business and consider the option to continue to keep a part public but continue to keep the core in a private cloud. At the finish of the working day, it can be all about the business benefit. The pure complex conversion is usually something that is not more than enough and then organizations are looking for the lower-hanging fruit and where by they can leverage and capture benefit right absent by carrying out this transfer, even although it could not be a total transfer into SaaS.

How is S/4HANA Cloud comparing with the competitiveness, like Oracle Cloud and other individuals?

Gilg: From my viewpoint, Oracle Cloud is genuinely the major competitor in phrases of the breadth of what it presents. We just saw the IDC MarketScape occur out and we’ve been really significantly head-to-head with them in the leader quadrant from a functionality viewpoint. It can be extremely near from my point of check out. I never know Oracle in detail, but from what I listen to conversing to buyers and so on, I believe it can be extremely similar. Then you have organizations like Workday that are extremely robust in HR. They are getting into finance, which is genuinely much more like what we connect with the admin ERP or fiscally driven ERP room. But I believe we have excellent performance in finance, and via the integration into SAP SuccessFactors, I believe we have a genuinely robust proposition now in combining all those. It can be nonetheless technically — and probably commercially — two different remedies, but they have been integrated finish to finish from the user expertise all the way down to the complex stage. We continue to get the job done on that, and in the cloud, I can see that this could be presented as one option at some point in time, especially combining HR with SuccessFactors and S/4HANA Cloud.

The final version of S/4HANA Cloud included the integration of Qualtrics. Will this continue now that SAP has made the decision to spin Qualtrics off?

Gilg: Certainly, it can be definitely likely to continue and especially for what it did in phrases of solution expertise for S/4HANA itself. We are accumulating opinions for S/4HANA Cloud from what our buyers and the implementation associates send out us. What we have finished internally is to mix that with usage information, which we are accumulating in any case from our cloud devices, and produced some really appealing correlations there. For instance, we can see the correlation among opinions that was sent in and combine sure occasions in the lifecycle, regardless of whether it can be an improve or regardless of whether it can be a variety of problems like a larger volume of tickets. We have started off to make some correlation listed here and solution management is actively looking into that. So, we are genuinely employing [Qualtrics] as a software and it can be undoubtedly something we want to also make readily available to buyers. On prime of that, we’ve produced a complete series of use scenarios that we want to embed in the solution itself and ship to the purchaser, not only for them to give opinions on S/4HANA Cloud, but also for them to leverage it in their business. That will continue despite the announcement. We have really significantly aligned our roadmaps with Qualtrics jointly, and we are likely to continue marching down this route, which is really promising.

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