All of SAP Is Cloud Only

According to SAP CEO Christian Klein, all customers must move to the cloud and use the cloud-only operating model. While that is an interesting vision, it is unfortunately foundless. The real world is hybrid!

In Christian Klein's vision, the entire SAP community could and should live in the cloud. But that is simply not possible. There are areas that have not yet been developed for cloud computing and because of that users obviously operate an SAP on-prem system. The question here is not whether there are advantages or disadvantages to a digital transformation. It is simply not technically possible.

One area of SAP dominance is called BRIM, and it is currently resisting any cloud strategy. BRIM, Billing and Revenue Innovation Management, is a complex billing system for multiple services and payment methods. An example of a successful BRIM customer is Swiss Post. Nonetheless, there is no need to discuss cloud computing regarding BRIM as it is only available as an on-prem installation.

So far, so good? Unfortunately not! This summer, Christian Klein announced to financial analysts that AI and similar innovations would only be available to SAP cloud customers. Chatbots, assistants such as Joule, Copilots for Java and JavaScript, the Green Ledger and more to come will not be available to traditional on-prem customers.

Financial analysts were impressed with this cloud-only strategy, and SAP's share price hit a new high this fall. Once again, Christian Klein has gotten it right, and on-premises customers are losing out.

 Unruly or logically consistent? The SAP on-prem community is neither malicious nor recalcitrant, but consistently rational. How are SAP users supposed to move to the cloud when, eight years after the introduction of S/4, the cloud version offers only the same functionality as the on-premises offering, and nothing more? How can an SAP customer move to the cloud if there is no exit strategy? What should a user do if his SAP solutions are only available as an on-prem solution?

SAP S/4 was an on-prem system from the beginning, see the presentation by Professor Hasso Plattner and former SAP CEO Bill McDermott in New York in 2015. Much later, S/4 became a sufficiently usable cloud offering through a lift and shift strategy. It will take many years before SAP has conquered the last on-prem area, because cloud is merely a vision.