SAP users refuse to commit to cloud-based SAP S/4HANA - survey

SAP users happy with what they've got - and don't want the time, cost and aggravation of a painful upgrade

Just 14 per cent of SAP users have committed to upgrading to S/4HANA when it becomes available, according to a survey of 230 SAP licensees around the world.

The survey, commissioned by third-party support services supplier Rimini Street, suggested that a majority of SAP users didn't feel there was a strong business case for making the shift and that the return on investment was unclear. Others were worried about "high migration and implementation costs", according to the survey.

"SAP has yet to make a clear and definitive business case for why licensees should begin a long transition to unproven S/4HANA applications from their existing, stable and mature SAP platforms. Licensees are hesitant to commit to a disruptive early-stage product as part of their SAP application road map and strategies - especially since the proven releases and platforms they currently run work well and there are innovative "edge" solutions available from many vendors," claimed the survey.

"This survey confirms that SAP licensees are continuing to drive significant value out of their long-running, mature SAP apps rather than pursue HANA and S/4HANA strategies that are yet unproven and do not provide a clear and strong business case," claimed Rimini Street chief marketing officer David Rowe.

Indeed, many CIOs Computing speaks to are satisfied with their SAP applications suites, which in most cases help run unchanging business processes, such as HR and finance, perfectly adequately, and therefore do not require major changes.

The big concern with S/4HANA is that the new ERP suite represents a major shift in the way that SAP builds and delivers applications to customers, with more than 400 million lines of code being re-written to support the new cloud-friendly architecture, which is also intended to make it easier for SAP to sell its acquired cloud services to licensees.

"Supplanting major existing databases like Oracle [around 60 per cent of SAP applications and Business Warehouse instances run on Oracle databases] with SAP's new in-memory database platform, and convincing licensees to migrate off of their existing application platforms in favour of a cloud deployment model changes everything," argued the report.