July 25, 2012 // By: Andreas Schmitz
SAP’s cloud business accounts for less than 5% of revenue, noted Gartner analyst Thomas Otter just over half a year ago. Since then, the acquisition of SuccessFactors and its planned acquisition of Ariba have brought SAP more than just new customers. Even the analysts now see SAP as a force to be reckoned with in the cloud business. The latest figures from Q2 2012 show that SAP earned 69 million euros in revenue from cloud software. The share of business from the cloud division is now at 6.5%.
SAP hopes to gain some wins by offering corporate groups and large enterprises ERP solutions and cloud solutions for specific departments and processes. SAP Business One, SAP Business ByDesign, and Dynamics NAV from rival Microsoft still dominate ERP in the cloud, with ERP solutions for corporate groups yet to make it in to the cloud. This is set to change. Sven Denecken, one of SAP’s thought leaders, says that in the future SAP will be focusing on the core modules customers, employees, finance, and suppliers. With SuccessFactors, a specialist in human capital management (HCM) solutions, SAP acquired 17,000 cloud customers and invested in the employee core module. Ariba covers the supply chain, and makes it possible to use the cloud to get the most out of the networks that exist not just within companies, but between companies.
The rationale for these activities is clear: In an online survey conducted by TNS Infratest with over 600 larger companies in Brazil, Germany, the United Kingdom, and the United States, one in five companies said that over the next year and a half they would be investing half of their IT budget in cloud solutions. Of those companies surveyed, four out of five saw cloud computing as important to their business. According to a Saugatuck survey from February this year, three out of every four euros invested in new IT solutions are spent on cloud or hybrid solutions. As the TNS Infratest survey confirmed, companies still have the familiar concerns about unsatisfactory data security (44%), compliance issues (38%), and the risk of losing control (38%) – concerns which are at most low-level background noise accompanying the inevitable shift to cloud computing.
On the following pages, Denecken explains the next three steps SAP will take on its cloud roadmap.