SOFTWARE GIANT SAYS CLOUD WILL RAKE IN MORE THAN ON-PREMISE BY 2018
Customers are flocking to S/4 HANA, SAP’s successor to Business Suite, according to figures showing that the number of users has doubled in just three months.
More than 2,700 organisations now use the enterprise software tool, up from 1,300 in October 2015, SAP revealed in results for its latest financial quarter.
Analyst house TechMarketView’s enterprise software research director, Angela Eager, told Cloud Pro that the uptake goes some way to giving confidence to customers in two minds over the tool.
She said: “It’s certainly scaling up and it’s looking quite good. There’s a lot of discussion within user groups about what the true value of the proposition is but looking at the numbers, some of that is being resolved.”
SAP did not reveal how many customers are using S/4 in the cloud, but admitted last October that the majority of customers had opted for an on-premise deployment, citing more functionality.
The growth in user numbers follows some controversy surrounding S/4 HANA, when SAP introduced an upgrade promotion that allowed existing Business Suite customers to shift to S/4 on-premise without incurring any upgrade fees.
But the UK & Ireland SAP User Group questioned the policy, saying that historically, customers who had paid maintenance fees on an on-premise product were always offered free upgrades.
The promotion expired at the end of 2015 and SAP is yet to announce a new pricing policy.
However, Eager told Cloud Pro that the promotion on its own was unlikely to have provoked the surge in customer adoption.
“You don’t just decide to make the decision to upgrade because you have that like for like offer,” she said. “If your organisation has a good relationship with SAP that would be part of the negotiations anyway.”
She added that moving to the HANA platform represented “a radical change” for businesses that would not be solved overnight.
“You need to do it on a step-by-step basis to see its impact on the rest of your IT estate – how it affects other applications and how the business operates” she said.
Cloud revenues continue climb
Elsewhere, SAP continued its upwards momentum in the cloud, seeing new bookings grow 103 per cent year-on-year to €344 million in the fourth quarter of 2015.
Cloud subscriptions and support revenue for the full year grew 109 per cent year-on-year to €2.30 billion.
Growth in SAP’s HCM cloud solutions helped it achieve this rise, with customer numbers for SuccessFactors Employee Central breaking the 1,000 mark.
Meanwhile, SAP’s core software license business for the quarter grew 13 per cent year-on-year to €4.7 billion.
Bill McDermott, CEO of SAP, said in a statement: “Our completeness of vision in the cloud has distinguished SAP from both legacy players and point solution providers.
“We beat on cloud and software, we beat on operating income and we are ever confident that SAP will remain a profitable growth business well into the future.”
SAP raised its 2017 outlook for cloud revenues as a result of the growth, and now expects to rake in between €3.8 billion and €4.0 billion that financial year.
Cloud will exceed on-premise revenue in 2018, the software giant also predicted.
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