Source URL: https://www.theregister.com/2024/11/05/cloud_migration_sap_oracle/
Source: The Register
Title: Users struggle with recipe when moving enterprise apps to the cloud
Feedly Summary: From meatballs and spaghetti to lasagna – same ingredients, different structure, says analyst
For the world’s two dominant ERP vendors, the cloud is their future infrastructure. For customers of Oracle and SAP, getting there can mean technology and business process upheaval, but the commercial relationship with the vendor is also transformed.…
AI Summary and Description: Yes
Summary: The text discusses the transition of major ERP vendors, Oracle and SAP, towards cloud-based consumption models and the associated complexities and commercial changes for customers. It highlights the challenges enterprises face with cost structures and risks during this transition, arguing for careful planning and risk management.
Detailed Description:
The content primarily addresses the future of cloud computing in relation to ERP vendors, focusing on the transformations in commercial relationships and the practical implications of moving to a cloud-based model. Key insights include:
– **Cloud Transition Challenges**:
– Transitioning from on-premise to cloud-based services involves significant changes in technology and business processes.
– Customers must adapt to new complexity in commercial relationships, shifting from capital expenditure (capex) models to operational expenditure (opex).
– **Market Dynamics**:
– Gartner’s analysis suggests that over 60% of enterprises will accelerate public cloud migrations, impacting server virtualization significantly.
– Different migration and modernization processes must be treated distinctly to ensure successful transitions.
– **Changing Commercial Models**:
– Vendors are shifting from traditional licensing models (perpetual client access) to consumption-based billing.
– The complexity increases as upfront implementation costs and other expenses impact the overall financial model during the migration.
– **Vendor Strategies**:
– Oracle and SAP adopt different approaches to cloud transitions. SAP utilizes its “RISE” model to facilitate migrations, while Oracle offers flexibility through its Cloud@Customer scheme, allowing on-premise infrastructure to run alongside cloud services.
– **Cost Implications**:
– Transitioning to cloud services can reduce customer discounts significantly, changing the cost dynamics for the end-user.
– Maintaining legacy systems on-premise may seem cost-effective initially but could lead to higher future costs associated with application modernization.
– **Advice for Successful Migration**:
– Enterprises should engage in thorough planning, robust testing, and proactive risk management to navigate the complexities of cloud migration successfully.
This analysis emphasizes the need for security, compliance, and careful transition strategies as organizations pivot towards cloud solutions, addressing the impact these shifts have on infrastructure, cost management, and operational resilience.