German-speaking SAP users have put out a strongly worded statement calling on the European enterprise software giant to commit to introducing new features in its flagship ERP system on-prem as well as in the cloud.
DSAG, the user group which represents SAP users in its German, Austrian and Swiss heartlands, called for a “binding commitment” to offer innovation and enhancements of S/4HANA, the in-memory ERP system, on premises as well as in the cloud.
SAP, Europe’s largest software vendor, has come under pressure from investors in recent years to up its game in the cloud and the high-growth software-as-a-service market. It has responded with the cloud lift-shift-and-transform offer under the banner of RISE with SAP, an offer launched in partnership with consultancies, system integrators and cloud hyperscalers.
DSAG argued that the anchor release of SAP S/4HANA — set to arrive in October of this year — forms the basis for next-generation technology and compatibility with legacy software. Since SAP launched S/4HANA in 2015, users have made significant investments and in some cases were still seeking to match the functionality they saw in the earlier ECC system.
In a statement released this week, Sebastian Westphal, a DSAG board member, said: “With investments already made in S/4HANA transformations, which quickly resulted in single, double, or even triple-digit million budgets, the anchor release 2023 must above all not mean that innovations and enhancements will only take place in the public cloud.”
An SAP spokesperson said the company wanted to work with users, and be transparent about its plans, but stopped short of committing to the same innovation on-premises as it does in the cloud.
“Our customers can be sure that we take their needs into account when making strategic decisions and want to ensure planning security. For this reason, close exchange with DSAG and its members is a particular concern for us,” the spokesperson said.
“We want to be a transparent and trustworthy partner for our customers, both in terms of our strategy, product roadmaps, and maintenance commitments. At the DSAG Annual Congress, for example, SAP made a clear commitment to hybrid architectures and thus also to SAP S/4HANA On Premise. This product has a maintenance commitment until 2040, which is unique in the IT industry in terms of investment security. This should give our customers investment security and the ability to plan,” the spokesperson added.
In a 2022 survey, DSAG found only 2 percent of German-speaking SAP customers were running S/4HANA in the public cloud, while 6 percent host it in a private cloud. Thirty-two percent of customers run the software on-premises while 75 percent remain on SAP Business Suite – a sign of how far SAP has to go in its objectives.
In its financial results for 2022, SAP said cloud revenue was up 33 percent on the previous year. CEO Christian Klein said: “SAP is more resilient than ever. We end 2022 with continued strong cloud momentum and a return to operating profit growth in the fourth quarter, marking an important inflection point.”
While DSAG praised SAP’s recent Datasphere offering, which addresses DSAG’s long-standing demand for the consolidation of SAP and non-SAP data, it also raised concern about licensing.
DSAG complained there was no official distinction as to whether a service is used productively or only for test purposes. “SAP must address the cost and licensing situation,” said Thomas Henzler, DSAG board member for licenses, service and support. ®