On-prem is dead, long live on-prem

The daily and business press has already announced it and SAP CFO Luka Mucic was very happy about it, the figures are almost sensational! Sales genius ex-CEO Bill McDermott seems to have really turned up the heat in the third quarter and Mucic has brought everything into an almost perfect balance sheet.

Thus, it was possible to concentrate on the quieter nuances at the Q3 financial press conference: Surprisingly often and contrary to McDermott's vision of "Cloud First", Christian Klein mentioned the desire and need of SAP's existing customers to also consider "on-prem".

The own data center is alive! Of course, the "Embrace" partner program presented at SAP Fkom in Barcelona at the beginning of this year was mentioned, and in particular the newly launched partnership with Microsoft, which is expected to generate sales of 70 million euros over the next three years.

But Morgan and Klein's "embrace" of the hyperscalers, Microsoft, Google, Amazon and Alibaba, was more of a marketing exercise. Much more exciting was the emphasis on "on-prem" and Christian Klein's statement that certain industries have no other chance than to maintain their own data center, see latency times in the manufacturing and logistics sector.

Ultimately, Christian Klein repeated this week at the annual press conference what he already said in the summer in the E-3 exclusive interview:

"In industries with high process complexity, such as manufacturing and automotive, where ERP customizations are required, it is not as easy to implement a public cloud solution.

The same is true for companies in countries with political instability, limited infrastructure, or heightened data security concerns. That's why we believe there will continue to be a very large on-premises market here.

We see the move to the cloud in other areas such as HR, procurement, front office and CRM. Here we want to support customers to go to the cloud in a modular way in the future, but with a strong integration into the ERP core."

SAP's existing customers will be pleased to hear that the fixation on cloud computing is now giving way to a pragmatic approach towards "on-prem" and hybrid cloud under Co-CEO Christian Klein. Thus, the good and old data center has been resurrected under Christian Klein and is getting the "on-prem" recognition it deserves.