Something is wrong here

Plato's Allegory of the Cave describes the liberation from the shackles of a two-dimensional life and the striving for something higher, for the light, for the illuminating of a longingly desired enlightenment. But Plato also recognizes that the light of enlightenment is blinding and hurts the eyes adapted to the darkness of the cave. And it comes to the dramatic climax of the narrative: Will the protagonists, freed from the shackles, retreat again into the darkness of the cave or get used to the glaring light of enlightenment and gain illuminating new knowledge?

If this introduction seems inappropriate, please equate the dark cave with your own data center and the dazzling illumination with cloud computing. With Plato, the narrative has a clear outcome, but in the SAP community, the answer is still open. There are too many advantages to having your own data center over cloud computing if you're a long-standing SAP customer. The enthusiasm of the young SAP CEO Christian Klein is thus also a generational conflict.

The advantages of cloud computing result from the economic crisis and other system disruptions as well as the start-up economy. Those without capital rent and lease. Those who want to implement an idea quickly rent and lease. So there are numerous circumstances and situations where cloud computing is the only sensible answer. If you want to revolutionize the used car market tomorrow, you can't block yourself today by building a data center.

Those who can plan for the long term and have the necessary basic capital and knowledge are often better off with an on-prem model. This is true not only for SAP software, but also for the IT scene in general. But how should existing SAP customers plan for the long term? There are still no answers from SAP CEO Jürgen Müller as to what should happen to the IBM DB2, Oracle and MS SQL licenses during the forced switch to Hana. Even the best AnyDB server will not be able to cope with the memory-hungry Hana. If the server is depreciated, so be it - it will still be a waste of resources. Employee knowledge and infrastructure investments of the past years are destroyed by the commanded use of Hana - something is wrong here!

The paper on which my words are printed may be patient. Reality, on the other hand, proves me right: While Christian Klein wants to see his SAP as a cloud company and praises Qualtrics to the skies to fuel or at least brighten up the price fireworks for the planned IPO, the DSAG association has presented an investment survey that reveals the exact opposite: Cloud computing is not a strategic goal of SAP's existing customers. According to DSAG, no one in Austria is committed to this operating model. Just two percent of DSAG members surveyed will invest in the Qualtrics cloud - if that's what investors on the stock exchange in New York City find out, what then? Something is not right here.

The challenging situation puts a strain on nerves. Just don't throw the baby out with the bathwater now. Proof of concept, data consolidation and S/4 project plans remain valid. Breaks and home offices do not mean standstill. Anyone who stops S/4 projects now, puts the brakes on digitization and considers the cloud to be a passing fad is destroying value. For many years, SAP's existing customers have been working to improve and optimize their ERP systems and to meet the challenges of digital transformation. Work on on-prem and cloud models should continue, and the DSAG investment report shows that many SAP legacy customers have similar or even higher IT and SAP budgets for 2021. Read our new column by Johann Szalachy on page 12.

Nevertheless, caution is advised for the new year, because not everything adds up yet, and some things may not be right: The continuously high planning figures of the DSAG members, who have wanted to customize S/4 for years, should mathematically result in a significantly higher market share.

But the number of productive S/4 users is still very manageable. As long as the full S/4 potential is not available in the cloud either, this operating model will also merely have high growth rates, but will not achieve any significance in absolute terms. Christian Klein should therefore be cautious about concentrating fully on cloud computing after studying the DSAG figures.

Maybe your own data center isn't ideal, but you can be sure that you have control over it: When Heise-Verlag in Hanover was attacked, the users reacted with lightning speed. All systems were shut down, disconnected from the network and restarted separately - try that with a cloud. If you have data center experience, a capable team and a CFO who knows how to finance, you should think twice about trading in your on-prem licenses for cloud computing with SAP, Microsoft and others. Short-term cost advantages should not obscure the view of a long SAP life.