Source URL: https://www.theregister.com/2024/08/28/sap_on_prem_cloud_split/
Source: The Register
Title: Enterprise SAP users split between on-prem and cloud as migration challenges loom
Feedly Summary: This is despite the German vendor’s preferred upgrade path
There is an even split for large enterprise customers of SAP ERP systems between on-prem and the public cloud – the German vendor’s preferred upgrade path – according to NTT Data, a major global SI and partner.…
AI Summary and Description: Yes
Summary: The text discusses the mixed preferences of large enterprises regarding their migration from SAP’s legacy ECC platform to the newer S/4HANA, highlighting issues of cloud versus on-premise adoption and the implications of SAP’s innovation strategy favoring the public cloud. It emphasizes the economic, quality, and risk factors influencing these decisions among large enterprises, while underscoring potential bottlenecks in talent availability as the migration deadline approaches.
Detailed Description: The text provides an analysis of the current state of SAP ERP system migrations among large enterprises, focusing on the balance between maintaining on-premise infrastructures versus transitioning to cloud solutions. Here are the major points outlined:
– **Enterprise Customer Preferences**: Large enterprise customers using SAP ERP systems are approximately evenly divided between on-premise and public cloud solutions, as reported by NTT Data.
– **SAP’s Cloud Strategy**: SAP is reportedly prioritizing innovation for its S/4HANA platform exclusively in the public cloud, meaning customers staying on the private cloud or on-premise systems may miss out on important updates and features.
– **Economic and Risk Factors**: According to NTT Data’s CEO, the decision-making process for customers hinges heavily on economic factors, quality, and the risk associated with their chosen architectural complexity and data management strategies.
– **Deadline for Migration**: SAP has set a firm deadline of 2027 for customers to transition from the legacy ECC system before mainstream support ends, with extended maintenance available until 2030 at a premium cost.
– **Gartner’s Findings**: Data from Gartner shows a reluctance or hesitation among users, with only a third of ECC customers having invested in transitioning to S/4HANA as of the previous October.
– **Talent Availability Challenges**: The growing demand for talents skilled in facilitating these migrations may lead to severe bottlenecks, potentially impacting project timelines and costs as less skilled labor may become an industry norm, particularly among smaller entities.
– **Competitive Landscape**: As large systems integrators, like NTT Data, vie for a limited talent pool capable of handling these migrations, there may be ramifications for smaller companies that also require such skills.
The implications of these findings are critical for security and compliance professionals. They highlight the need for robust planning and strategy in migration efforts that consider not only the technical aspects but also the human resource challenges that can impact successful transitions. Additionally, the trend toward prioritizing cloud-based solutions introduces considerations for cloud security and compliance, pushing organizations to evaluate their risk management and governance frameworks in light of SAP’s innovations and support timelines.