Posted On: November 7, 2019
Where SAP customers are spending their cloud dollars
It should come as no surprise that SAP users are, by and large, steadily increasing their cloud spend. In fact, 75% of organizations plan to increase their cloud investments an average 16% by July 2020.
What may surprise companies is the way enterprises are distributing that spend. In their latest report, “Constructing Your Road to the Cloud: Where SAP Customers are Accelerating Their Transformations,” Syntax and ASUG explored the nuances of SAP customers’ cloud technology expectations and usage. The findings show the ways experience and new technology are guiding SAP users in adjusting their short- and long-term cloud strategies.
“Constructing Your Road to the Cloud:” is the culmination of three years of investigation into SAP customers’ cloud processes:
- In 2017, ASUG and Syntax invalidated cloud misconceptions, including ideas around internal IT burdens and unplanned downtime.
- In 2018, ASUG and Syntax dove into common cloud challenges and identified the key barrier to adoption.
- In 2019, ASUG and Syntax investigated the shift in cloud spending among current SAP customers.
Why is this information important? It helps SAP users of all sizes avoid potential pitfalls and architect their own cloud strategies going forward. It also underlines the importance of developing a consistent internal strategy around cloud technologies — both for the present and future.
SAP customers should keep these findings in mind when planning their cloud investments:
SAP customers are serious about their cloud investments
In 2019, it’s extremely unlikely to find an SAP user that isn’t increasing their spend on cloud; just 13% of companies say they aren’t planning to do so. Meanwhile, those who are increasing their investments are making big moves. In 2018, 52% of organizations were spending up to $250,000 on the cloud annually, compared with 64% of those organizations spending $250,000 to $1 million in 2019.
So which SAP users are spending the most?
- Organizations that are diversifying their cloud portfolio among multiple providers were most likely to spend more than $500,000 annually on cloud services. Overall, the share of SAP customers in this spending group has increased 17 percentage points from 2018 to 2019.
- Nearly two-thirds (64%) of SAP customers can be defined as continuous cloud spenders — they have increased spending in the past 12 months and will continue to spend in the next 12 months.
SAP users are gaining confidence in the public cloud
Those organizations who are continuously spending on cloud also have the most applications in a public cloud. That’s a new trend among SAP customers; in Syntax and ASUG’s 2018 research, private clouds were most popular among organizations with one to five years of cloud usage.
The shift in spend is likely due to increased confidence in the security, speed, cost and maintenance efficiencies that public clouds offer. In the past, SAP customers may have been hesitant to trust a large, external organization with their data, but the benefits of moving to a multi-cloud environment, along with security and tech improvements, have changed that attitude.
- An average SAP organization runs three to four applications in the cloud—of those, two to three are in the public cloud. Only one or two applications are housed within a private cloud environment.
- Organizations with the most applications in the private cloud are past spenders — in other words, the users least likely to keep up with the latest technology.
SAP users without a consistent cloud strategy are struggling
Whether or not an SAP organization decides to follow the trend and move to a public, multi-cloud model, they will need a comprehensive strategy that accounts for budget, milestones and scheduling. But nearly one-third (30%) of SAP customers overall, and nearly half (47%) of future spenders, told ASUG and Syntax that a lack of a detailed cloud strategy was a pain point — a new finding in the 2019 survey. Additionally, these organizations were less likely to be satisfied with their cloud solutions overall.
So what should an effective cloud strategy include, and how can an SAP organization develop one? Companies must prepare for the differences between public and private clouds, including compliance, support and integrations. And no matter how experienced an SAP customer is at managing its cloud, everyone can benefit from the right partner to help build a long-term road to success.
You may also be interested on reading our whitepaper “Constructing Your Road to the Cloud: Where SAP Users Are Accelerating Their Transformations”. DOWNLOAD IT HERE