Cloud versus ERP

ERP is the supreme discipline

There are many excellent outsourcers, hosters, cloud providers, and hyperscalers, but there is only one SAP with a specific business knowledge like no other IT company. SAP is the epitome of ERP and, in this area of expertise, SAP is the sole global market leader. The wide scope of business and organizational knowledge needed to manage a company's organizational structure and processes is something only SAP possesses.

Cloud company

SAP CEO Christian Klein is currently attempting with all his might to transform the ERP company into a cloud company. However, anyone familiar with SAP's history knows full well that SAP has never been very good with infrastructure issues. In this case, it’s worth mentioning Dresden-based SAP SI (System Integration). This SAP subsidiary wanted to offer hosting services to the community, among other things. However, it turned out to be a disaster and large parts of SAP SI were passed on to the German Telekom.

I’ve heard that cloud and infrastructure services carrying SAP's seal of approval are being carried out by third-party providers. SAP's official partnerships with hyperscalers are well known, but apparently history is doomed to repeat itself because SAP has no specific expertise in operating an infrastructure like cloud computing.

Cloud only

While SAP CEO Christian Klein was still talking about cloud first and hybrid cloud at the DSAG’s (German-speaking SAP User Group) Annual Congress 2022 in Leipzig, a year later in Bremen “cloud only” seemed to be the only option. He did not disclose the reason for his change of heart. The fact is that the entire SAP corporate structure is being converted to a cloud-only strategy. There is little room for compromise here. Many customers are horrified because there are many alternative options, such as on-prem, private cloud in a private data center, and hybrid cloud scenarios, as well as good reasons for said alternatives.

From an information technology perspective, there is not a single argument against mixed operation. Cloud computing boasts major advantages in some use cases. However, the same is true for on-prem operating models and ultimately SAP still has very successful solutions that are only available as on-prem offerings, see BRIM (Billing and Revenue Innovation Management). So what comes next? Obviously, cloud computing is a significant trend, but the true value for SAP customers is found in SAP's tried-and-tested ERP.