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KEY TOPICS DISCUSSED

 * RISE with SAP

   
 * RISE with SAP
 * Blogs


SAP’S NEWEST INNOVATIONS WILL BE CLOUD ONLY


ON-PREMISE AND HOSTED DEPLOYMENTS WILL NOT SEE ENHANCEMENTS

Reading time: 3 mins


MEET THE EXPERTS

   


 * ROBERT HOLLAND
   
   Vice President and Research Director, SAPinsider


KEY TAKEAWAYS

⇨ NEW INNOVATIONS IN AI AND SUSTAINABILITY WILL ONLY BE AVAILABLE TO RISE WITH
SAP AND GROW WITH SAP CUSTOMERS

⇨ BOTH ON-PREMISE AND HYPERSCALER HOSTED ENVIRONMENTS WILL NOT HAVE ACCESS TO
THESE INNOVATIONS

⇨ DETAILS ON HOW PREMIUM EDITIONS OF RISE WITH SAP AND GROW WITH SAP WILL BE
OFFERED ARE YET TO BE ANNOUNCED

SAP’s 2023 second-quarter earnings call on July 20, 2023, started with remarks
on the company’s strong financial performance. It was announced that the cloud
revenue increased by 19% to €3,316 million, while current cloud backlog
increased by 21% to €11,537 million. These numbers were driven by SAP S/4HANA
cloud revenue, increasing by 74% to €823 million, and SAP S/4HANA current cloud
backlog which increased by 65% to €3,717 million.

However, shortly into his prepared remarks, CEO Christian Klein explicitly
stated that SAP’s newest innovations would only be available with SAP S/4HANA
Cloud, public edition or SAP S/4HANA Cloud, private edition delivered by GROW
with SAP or RISE with SAP. In situations where an organization used a
hyperscaler hosted implementation outside of RISE with SAP, for example, an
infrastructure-as-a-service (IaaS) environment, the innovations that SAP is
planning will not be available. They will also not be available in on-premise
deployments of SAP S/4HANA.

This announcement highlights a significant shift as SAP had previously
maintained that it was not limiting enhancements to cloud-based offerings
despite a strong cloud ERP message. In fact, executives at the German-speaking
SAP user group DSAG called out the company earlier this year for overlooking the
on-premise customers and focusing more on cloud-based innovation.

During the call, Klein also highlighted that SAP will not be offering AI,
generative AI, and sustainability capabilities in on-premise releases. The
reason being the inability to put AI in a hugely customized application as it
requires a cloud environment. This emphasizes that only cloud-based environments
offer the processing power and data capacity required for technologies like
generative AI and for processing large data sets.

While no specifics were announced today, it appears that SAP is developing an
add-on solution package that integrates AI and sustainability capabilities with
an organization’s existing SAP S/4HANA Cloud environment. Organizations will
have the option to leverage this premium offering with generative AI
capabilities to improve their existing capabilities and leverage the data layer
they have already created in RISE with SAP.

Such features will be a part of new RISE with SAP and GROW with SAP deals. Also,
existing customers can add the premium version to their existing implementation
and consume the technologies “out of the box”. SAP expects that such packages
will have a potential 30% uplift potential in the cost of RISE with SAP and GROW
with SAP.


IMPACT ON SAPINSIDERS

Organizations who have been planning the move to SAP S/4HANA and use the
existing perpetual licenses to deploy either in their data centers, or in a
cloud-native manner using an IaaS environment hosted by a hyperscaler, should be
aware that they will be unable to leverage the new AI and sustainability
capabilities that are introduced in the future. While this does not restrict
organizations from using the existing contextual AI capabilities that exist in
many SAP solutions, it will curtail their ability to use generative AI, which
can integrate with the data layer created in a single SAP S/4HANA Cloud and SAP
BTP environment.

At present, organizations may choose to not leverage these capabilities and
remain with on-premise, private cloud, or hyperscaler-hosted environments, as
this may be the first of many such announcements. AI related innovations are
only available in the cloud today, but the same scenario may play out for other
innovations in the future.

SAPinsiders need to thoroughly evaluate their future ERP plans and what their
requirements will be. While this announcement may significantly affect
decision-making, SAP has already been dissuading organizations from moving
forward with SAP S/4HANA on-premise deployments by significantly increasing the
associated costs. SAP is now using new capabilities and innovations as the
carrot to encourage organizations to move away from traditional licensing and
deployments.




MORE RESOURCES

See All Related Content
 *  * SAP CIO
   
   
   LEADERSHIP PERSPECTIVES ON RISE WITH SAP, SAP S/4HANA AND THE FUTURE OF SAP
   INNOVATION
   
   October 12, 2023

 *  * RISE with SAP
   
   
   AN OVERVIEW OF SECURITY IN RISE WITH SAP
   
   August 08, 2023

 *  * RISE with SAP
   
   
   SAP DETAILS FIRST CLOUD-ONLY INNOVATIONS
   
   Reading time: 5 mins

 *  * SAP ERP
   
   
   INDUSTRY FOCUS ON RISE WITH SAP
   
   February 15, 2022




FEATURED INSIDERS


 * BISWARANJAN SENAPATI
   
   Capitol Technology University


 * SHASHIDHAR GARIMELLA
   
   SAP America Inc


 * HARI SONNENAHALLI
   
   Solution Architect, NIMBL




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