Enterprise Cloud Deployment 2022

⇨ Learn about the major drivers for moving SAP workloads to the cloud.

⇨ Understand what is behind the choices that organizations are making.

⇨ Understand how organizations plan to measure the success of these moves.

Robert Holland (00:00:01):

Hello, and welcome to today’s webinar, enterprise Cloud Deployment, hosted by SAP Insider and presented by NetApp PricewaterhouseCoopers, red Hat, Susa, and Vertex. I’m Robert Holland from SAP Insider, and I’ll be your moderator today. We have just a few announcements before you begin. During the webinar, I’ll presenting the findings of the s a p Insider Enterprise Cloud Deployment Research report. Uh, unfortunately, the q a panel has not been enabled for this webinar. So if you have a question, please use the chat window. A copy of today’s presentation will be made available for you to download in an email after today’s session. Okay, let’s jump right into this.

(00:00:46):

So, um, this is research that we’ve done for the last, uh, three years now, I think. Uh, I think, uh, it goes actually back to 2019. So this is the fourth time we’ve done this research report, certainly the third time that I’ve written it. And what we’re really focusing on is members of IT and those involved with s SAP P systems and infrastructure and cloud deployment decisions at organizations that are part of the s a P Insider community. So, we surveyed organizations that are part of the S a P Insider community about their plans for moving their s a P workloads to the cloud, and what was sort of the reasons behind those. And what we were trying to determine is which S a P workloads they’re running, what plans they have to move those workloads to the cloud, the types of infrastructure that they plan on using, and how they’re gonna measure the success of those moves. So, as for any S a P Insider research, we look at the drivers actions requirements and technologies on which they’re focused as part of those steps towards their infrastructure and landscape.

(00:01:59):

Oh, I just said all that. So we conducted our research between August and September of 2022. Uh, 134. Um, members of our community responded to the research, and I talked to several of them, um, post, uh, post the post the interview being completed, um, before the publication of the research. So, um, the largest group of respondents for this particular research was from North America. 43% of those, uh, responding to this particular researcher from North America, 27% were from amea, 18% from a pj and 13% from Latin America. So a bit of, a bit of a higher proportion than this than we often see from Latin America, um, in terms of where they were in their organizations, um, 70% were from it. Uh, unfortunately, um, the particular survey that I ran did not break it down further, but, um, but a lot of the time we see for our research, they’re from it, um, administration, sorry, uh, IT management, um, as well as the s a P team and other groups within it.

(00:03:11):

Uh, in this particular survey, 6% came from finance, 6% from supply chain and logistics, uh, 5% from research and development, uh, 4% from manufacturing and production, 3% from business development and sales, uh, 3% from G R C A compliance. Uh, and then we had 3% from procurement. And, uh, just a, a few respondents from marketing in terms of what industry these respondents came from. The largest respondent group was the high-tech or software and technology, uh, market sector. Um, 29% of respondents identified as being in that particular market sector. Uh, 26% were from the industrial sector, which includes manufacturing, agriculture, energy, and natural resources. Uh, 11% identified themselves as being from the public sector, uh, 9% from healthcare and life sciences, uh, 9% from retail distribution and consumer package goods, 7% from hospitality, transportation, and travel. Uh, 6% from financial services and insurance, and 3% from media and entertainment.

(00:04:20):

Um, so let’s just sort of jump into the data that we saw. Um, one of the first questions that we asked respondents is, what s a p workloads is your organization currently running or implementing? Now, 50% of respondents said that they were running, or slightly over 50% said they were running S A P S for hana. Note that the question was about running or implementing. Um, so this includes organizations that, uh, might be in the process of either doing a proof of concept or in the process of deploying S A P S for hana. Uh, we’ve typically seen in the research that we’ve done across 2022, that somewhere around 29 to 30% of respondents to our research are already running. Um, S A P S for hana, sorry, are are running a S for hana. Uh, and another proportion maybe, uh, 15 to 16% are implementing S A P S for hana.

(00:05:20):

And then another chunk, 10 to 12% are, uh, do doing proof of concepts of pilots. So that kind of ties in with the proportion of respondents we see here saying that they’re either running or implementing S A P S for hana. Um, uh, that’s also followed immediately by those running S A P E C C or Business Suite. Um, and those probably are running those, running that solution in production. It’s not something that they’re, uh, IPL in the process of implementing necessarily. Um, you know, s a talks at the moment about how around 20,000 customers maybe be a little over now, uh, they didn’t report the number in their last quarterly numbers or a running S A P S for hana, uh, out of about 55,000 in their, um, uh, broader, um, enterprise E R p, uh, space, or the number of customers running an enterprise e R P solution at S a P from s a p.

(00:06:28):

Uh, so those numbers do kind of work out, work out about 30% of that 55,000 is somewhere in the 20,000 range. It might be a little less, but remember that not everyone who has licensed S A P S for HANA has necessarily started to run or implement it yet. Uh, they may have just done so. Um, other solutions that are quite popular. S A P hana, not really surprisingly, given the number of respondents who are running S A P S for hana, um, C R M solutions, traveling Expense Solutions Analytics, and BI Solutions. And you can see that there’s quite a list of different solution types that, uh, organizations are running, um, rise. But s a p at the bottom of the list, not really surprisingly, uh, given that it’s still relatively new, s a p is sort of said, there’s around two and a half, two and a half thousand organizations with licenses for rice with s a P.

(00:07:25):

So I would not necessarily have expected, um, many organizations to be running that. However, you’ll notice that things like sales solutions and e-commerce solutions really are not very far ahead of that. So it, it’s actually growing pretty quickly compared to some of the other solutions in the s A p, um, ecosystem now in terms of where are those solutions running. So we then asked the question, what infrastructure are you using for the s a p workloads identified in the previous question? Um, so as you can see, the solutions that are most likely to be running on some sort of internal infrastructure, and this was actually broken up a couple of ways, although in the chart here we are just showing internal infrastructure. Uh, we’re only actually throwing showing three particular choices here because, uh, otherwise the chart would be just a little bit too complicated to read.

(00:08:24):

Um, but, um, data warehousing solutions are the most likely to be running on either on, uh, on premise or on a managed environment on premise, uh, with about 50% of respondents that either them or E c C or Business Suite saying that they were running those solutions, um, on internal infrastructure and financial solutions. Might be simple finance, it could be other financial solutions, um, are very close behind that as our procurement solutions at 43%. Um, those solutions that are most likely to be running on the public cloud or, uh, yeah, uh, a hybrid public cloud environment or just a public cloud or hyperscaler environment are, um, as you can see, travel and expense solutions like SAP Concur. Uh, given that that is a software as a service solution, you know, there is no, um, you can’t install it, uh, in your environment. No real surprise that that solution is running in the cloud, um, and business technology platform.

(00:09:33):

Um, some of that is on private cloud, which, which might be an SAP cloud because a number of people might have been running, um, SAP Cloud platform before they were running SAP business Technology platform. Um, a small proportion is saying, you’ll notice is saying internal infrastructure, um, not only for that, but for, um, even Rise. But s a p at quarter of the respondents are saying that they’re running on internal infrastructure. The answer is the, the, the, to sort of clarify that, it’s not that they’re saying they’re running it on-premise, it’s that they’re saying they’re using a managed environment on-premise. So that could be something like an HPE GreenLake, a Lenovo True Scale, or a Dell Apex, um, that actually allows them to have a cloud-like environment in their internal infrastructure. Um, so, you know, that is something that, um, is managed then by s A P.

(00:10:32):

It’s not managed by the customer. Um, it’s managed by sap, uh, and it’s on, um, uh, infrastructure that they’re then, um, paying operational expenditure cost for. They don’t actually own the infrastructure. It might be in their data center, but they would pay and manage and lease that exactly the same way they would, uh, other cloud infrastructure. Um, so yeah, so that’s, um, so that’s where that sort of explains that little bit of a idiosyncrasy or a seeming idiosyncrasy in the data. Um, some that are most likely to be running in private cloud, for example, we see sales solutions. SAP HANA is more likely to be running on a private cloud environment or a hybrid private cloud environment. Um, you know, e-commerce solutions like Ariba, a real surprise then that there’s quite a lot of, uh, public cloud. But as you can see, that, that older solutions tend to be more likely to be running on premise, uh, or in a managed environment on premise. Um, newer, newer cloud-based solutions, uh, are more likely to be running in on hyperscalers in the private cloud, public cloud, um, and that kind of y you know, and given that not everyone has necessarily moved to Concur as a travel and expense system or even, um, success factors for their HR systems, um, although hr, you know, it’s HR solutions are more likely to be in the cloud than anything else, but there are still some organizations running the non-software as a service, um, versions of those products as well.

(00:12:17):

So, of those people who said they were running their environments on-premise, so not managed environment on-premise necessarily, but just on-premise, uh, we asked them what their plans are for moving any of those s SAP on-premise workloads to the cloud. Um, it’s always interesting that the, that s SAP S for HANA is sort of at the top of the list here in terms of it’s the least likely to be moving to the cloud, um, excuse me. Um, but that can sort of be explained by the fact that people who are running S A P S for HANA in on-premise environments are likely to have just invested in new infrastructure, and they’re unlikely to be, um, they’re unlikely to be looking to replace that infrastructure in the short term. Uh, and that’s why you can sort of see, you know, 40% say they have no plans to move it to the cloud.

(00:13:19):

They’re not, they’re, they’re not planning on replacing that infrastructure. Um, another 40% say, yeah, but it’s in the next couple of years, and another 20% say it’ll be beyond two years. And that sort of makes sense given their probably recent investment in new internal infrastructure. Um, things like traveling expense solutions, yet eventually everyone is probably gonna move to Concur. It’s gonna be in the cloud e-commerce solutions, a REBA similarly, um, or, or no, that’s not a reba, um, but, uh, other, you know, other e-commerce solutions like e-commerce cloud or Commerce Cloud that s a P sells, um, eventually people are going to transition to those environments in the future. Um, yeah, so those are the, the most likely to be, um, you know, moving to the cloud, uh, procurement solutions. That’s where Areba is. Um, you know, probably only 25% say they, they don’t have any plans to move that, the cloud, um, quite a significant proportion of planning to move into the cloud, 75% basically over the next two or more years. So it makes a lot of sense that some of these older transition, older, older solutions are transitioning to the cloud.

(00:14:38):

Um, something that we did wanna sort of follow up on and ask an additional question is many, uh, many SAP workloads that organizations run have partner solutions that are integrated with them. So what we did is we asked organizations for the SAP workloads that you’re moving to the cloud, what plans do you have for the partner solutions that are connected to or integrated with them? Um, and for the most part, those are moving to the cloud. Um, although as you can see, not necessarily the majority are moving at the same time as their s a P workload. It might be that they move the s a P workload and then move their partner solution to the cloud in the future. Um, about 30% are moving at the same time, but another, you know, 50 odd 51, 50 2% are likely to be moving to the cloud, uh, at some point in the future, uh, while only 20% say they, they have no plans to move that solution to the cloud.

(00:15:43):

So maybe they’re replacing it, maybe they’re doing something different with that solution. But that is something important to bear in mind when talking about a c workloads and using s SAP workloads in the cloud, that you do have partner solutions and partner, uh, that are integrated with or connected to them, and you need to bear in mind what you’re planning to do with those. Um, now for those who said they’re running on the public cloud, uh, we asked which, which cloud providers are you using for your, the s a p workloads that you identified? Um, as you can see, the numbers are pretty similar to last year, with the one exception that s a P has jumped, uh, quite significantly. 25% of responders last year said that they were using s a P as their cloud provider, whereas nearly 40% this year said they were using s a P as their cloud provider.

(00:16:39):

And I think that sort of speaks to where, um, other cloud providers have potentially dropped a little bit, um, because people are, are, are using s a P. Now what does that mean? Uh, some of those people might be using, or we have s a p heck listed separately, but they could be switching to solutions like SAP P success factors where you’re, you’re runnings a p you don’t necessarily get a choice of the cloud provider you’re using in the background. Um, same for Concur, same for a reba, um, the glass, all of these s SAP software as a service solutions that you’re not necessarily getting a choice of cloud provider in the background. Um, but I think rise with s a P is also, uh, having an impact on that number because quite a few people who are using RISE with a p say they’re using s a P as they’re hosting company, um, even though really they’re, you know, they’re potentially making a decision with another cloud provider on the backend.

(00:17:38):

But I mean, what you can also see from this is that there aren’t probably many companies who are using just one cloud provider. Um, most of the provider, most of the, obviously the numbers, the percentages for 2022 add up to far more than a hundred percent, which indicates that a lot of organizations are running more than one cloud provider. In fact, I think, uh, 50% of people, for example, running Microsoft Azure, were also running, uh, another public cloud provider for some of their workloads. Now, this isn’t, you know, it could be that, uh, I don’t know that they’re necessarily splitting their solutions across cloud providers, um, so that they might have one instance of, for example, S A P S for HA on Microsoft and another one on a W s I don’t think that’s the case. It could be they have different workloads on different providers. Um, so their E C C system might be on, um, Google Cloud. They might be running, uh, an S four HA system on heck or something like that. So there is a, um, but there, they’re definitely, people do definitely use multiple cloud providers. And some of the reason for that, uh, is, uh, some people will, will definitely do that as a form of resilience. So if one cloud or provider goes down, the other one is up. Um, but others don’t necessarily like to be tied in to just one cloud provider.

(00:19:11):

Um, so in terms of what are the most important criteria, uh, for organizations when selecting a cloud service provider, um, the big change this in this year’s data is that security has gone from one of the most important factors because last year, um, I think it was third behind customer service or s l a and data center locations, local DA having local data center locations, um, to being the most important factor, uh, by a significant margin, um, nearly 20% higher than the next most important factor for, uh, selecting a cloud service provider. And I think that sort of really speaks to the prevalence of security in many people’s infrastructure and organizational decisions at the moment. Um, ransomware and malware attack attacks continue to increase, and not only to continue with to increase in, in, in volume and a number, um, but how often they’re being reported on in the press.

(00:20:19):

I mean, it’s, you literally can’t go a week these days without some organization talking about being breached, having data leaks, having something going on in their organization. Uh, sometimes very significantly. Um, there have been some, um, customers in the, a PJ region, uh, sorry, the companies in the, a pj, a PJ region, um, that have had some very significant data breaches recently that I’ve read about in the news. But I mean, it doesn’t matter where you are in the world, this is happening, and I think security is thus becoming an even more important factor for organizations. Um, apart from that, numbers were largely similar to last year. I think price was a little more important this year than it was last year. Um, what was sort of interesting as the huge drop in SLAs and local data center locations for some of these providers. Um, I’m not sure sort of what largely drove the drop in, why SLAs?

(00:21:18):

I, I know that organizations that continues to be important for organizations, so I’m not quite sure why that changed. Um, as a criteria for selecting a cloud service provider, it’s possible that I think possible that that simply relates to the fact that, um, most cloud service providers are offering a pretty high level of service level, a pretty high, pretty good service level agreement these days. And it’s, it’s largely the same across providers, which is why organizations are, are not necessarily saying that’s it’s as important as it used to be. Uh, but that’s just an assumption on my part. Um, local dentist data center locations, um, I definitely think that’s important. Uh, data residency continues to be very important for organizations operating in amea particularly, um, because depending on the country you’re in, in amea, there are not only certain types of data that must reside in the country, um, that you are, you do business or that it was collected from.

(00:22:26):

Um, but it also must reside on providers potentially that are majority owned inside the country. Uh, and France has definitely passed laws, uh, about that. Um, so I’m sort of a little surprised that local data center locations aren’t as important as they used to be, although maybe, uh, if you’re in France, you’re having to now choose a provider that only has, uh, local data center locations. Um, but I know for many, given that the respondent groups for this survey are largely, um, US and then even a pj uh, and Latin America, many respondents in those regions aren’t necessarily running their systems in local data centers. Um, while that may be a, a major factor for those in Europe, um, in a p j if you’re running a multinational company, oftentimes the locations you’re choosing for your data centers are either something like Singapore, um, or potentially the west coast of the us.

(00:23:29):

And that’s simply to provide, um, a low latency for respondents that are in other parts. Uh, so not respondents other users that are in other parts of the world. So, um, you know, while having a local data center location, for example, if you’re in, um, Australia might be fast for people in Australia, it’s then very slow for users that are in other parts of the world. So companies, global companies that are out of based in those regions, often off for data centers like Singapore, um, west coast of US, or even Europe, um, in order to, uh, ensure that users in all parts of the globe have a similar latency when connecting to those systems in, in terms of what are the factors that are part of their decision to move SAP workloads to the cloud. Um, as you can see, you know, the highest, the most important factor last year was, uh, the greater flexibility that the cloud offers.

(00:24:33):

That continues to be, um, the most important factor. Um, more security we added as an option this year to the question. Um, and it immediately jumped to the second most important factor as a, as I sort of explained in what I was talking about just now. Um, cloud native architecture, cloud data repository, deployment model, distributed data scenarios, those all dropped at importance or the importance of how that factor. And, and I think to a certain extent that’s because, uh, people sort of understand if you’re moving to the cloud, you’re gonna get cloud native a architecture, you’re not necessarily doing anything different to get that, um, cloud data repository, uh, li bit, little bit less of a drop, but still people are still sort of centralizing their data repositories in the cloud. Um, cloud deployment model, distributed data scenarios, I think are with people centralizing more than they used to. Perhaps distributed data isn’t as big a deal as it used to be.

(00:25:36):

Um, in terms of how do you plan to measure the success of your cloud initiatives? Um, no huge changes from last year. Um, as you can see, reduced operational costs is still, uh, the highest, um, well, the biggest, the most likely way that organizations plan to measure the success of their cloud initiatives. Um, flexibility and scalability about the same as last year, proof security a little higher than last year. Um, but where we see a big jump, 15% or so, uh, is the integration of existing applications with the cloud. And as organizations start to move their workloads to the cloud, um, this is becoming more and more important because you still may have some workloads running on premise. They might be SAP workloads, they might be other workloads, but you need to get them into the cloud, uh, and you need to connect them with what you’re running in the cloud.

(00:26:38):

So if you move an SAP workload of the cloud, or if you move a partner workload or workload of the cloud, and you still have your s a p workload on premise, you’ve gotta connect the two. Um, and that sort of is where that, um, importance of that particular measurement of success is, uh, has increased. Um, faster deployment of applications, dropped a little bit from last year. Um, consolidated infrastructure also dropped a little bit from last year as well. But otherwise, these, uh, these, um, measurements of success are largely similar to what we’ve seen in the past. Um, we’ve talked about a couple of these factors already. Um, yeah, we’ve talked about all of these already.

(00:27:30):

So what do we re sort of recommend? Um, you know, the first thing that I think I, I reco, we reco I recommend when planning to go to the cloud, is to start planning for your as future SAP usage and landscape. Today. SAP solutions are moving to the cloud. They’re not all there today. And some of those that, uh, are don’t necessarily have feature parody where they’re on-premise counterparts. S a P is getting there, um, but it’s not necessarily there in all cases. You know, there may, for example, be, um, industry specific versions of either, uh, S A P S for HANA or E C C that are not yet available in S A P S for HANA Cloud or even private cloud, uh, private edition. Um, but in the next few years, I think that most s a P offerings, uh, uh, uh, will only provide enhancements and new features in their cloud versions.

(00:28:21):

It’s not necessarily completely there yet, but at some point that’s gonna be the case and it’s critical you’re ready for that change, uh, and your planning should already be underway for that eventuality. Um, understand how you’re gonna measure the success of your cloud initiatives at the start of your planning. Is infrastructure flexibility and scalability the most important goal? Are you looking to implement an environment with more security? Do you want more sustainability in your cloud environment? Is it a combination? Uh, you know, of all those things? Um, are you looking to just reduce cost and replace a bunch of legacy infrastructure before you make any decisions about what and which SAP workloads you’re gonna move to the cloud? Ensure that you understand how you’re gonna measure the success of that move, create key performance indicators that will help you measure and track that success, that will help you much better determine the true r ROI and success of your move, rather than if you start to track them at the end.

(00:29:24):

Uh, align the movement of your partner solutions and those integrated with your SAP workloads, with your move to the cloud. Every solution you have in your landscape relies on integration points or data from other systems. Even the most comprehensive e r P system has touchpoints with other, other solutions in the enterprise. And many of those are partner or third party solutions. You might have a third party solution for tax. You might have a third party solution for, um, OCR and billing. Those are gonna be connected to your E R C system. As you move e r P system, as you plan your to move your s SAP P workloads to the cloud, it is vital that you consider the impact on those partner solutions, whether you still be able to integrate with them from a new s a P version that’s in the cloud. That’s one of the challenges they know many organizations have run into.

(00:30:14):

Whether you need a new version of the partner solution to make that work, ensure that you prepare for the requirements for these solutions as much as for your SAP workloads. Uh, and lastly, take the, whoops, didn’t do that. Jumped ahead several slides there. Um, educate your s your team so that they can evaluate which cloud options will make the most sense for your organization. There are a lot of options available today from a cloud infrastructure perspective. Some choices around provider or type of deployment can be driven by broader corporate infrastructure plans, but for other situations, your internal teams need to be able to evaluate and determine which cloud options will work the best for you. So to do this effectively requires you spend time training your teams so that they have the appropriate knowledge and skills. Many organizations have built strong internal SAP teams and educating those teams about the cloud will be core to your future cloud success.

(00:31:16):

So we’re gonna move on to the, the dart. Um, those of you who are familiar with SAP Insider of research will be familiar with looking at the, the looking at evaluat in the dart big picture drivers, macro level events driving the organization’s strategy actions are the, the strategies that organizations are implementing to sort of address those drivers requirements of the business and process level requirements to support the strategies. And then technologies are the technology and systems related requirements that enable the business requirements and support the overall strategies the company is taking. So we can see all of those for, um, for our particular research. Now, when we, for drivers, we ask organizations or ask respondents to select their top two drivers. So what are the two factors that are most impacting their decisions to move s a p workloads to the cloud? Um, actions. Uh, we ask people to select their top three. What are the top three actions you’re taking in sort of response to the drivers that you saw? Uh, with requirements, we, uh, give people a list of requirements and ask them to rate them on a five point scale from, excuse me, not important to very important.

(00:32:38):

And then with technologies, we ask people to say, are you using that technology today? Uh, are you implementing that technology either today or within the next 12 to 24 months? Are you evaluating the technology or do you have no plans for the technology? So we’re gonna run through each of these in turn. Um, so, you know, although the digital focus for bi digital, uh, sorry, the business focus on digital transformation remains a top choice for respondents when it comes to their reasons from moving to the cloud as it has for the last couple of years, slightly fewer respondents selected than in 2021, um, which sort of significant drop from 2020, I think largely due to the introduction, uh, for an answer choice about needing a more secure and resilient infrastructure to support a changing business landscape, because that wasn’t, uh, an answer choice in 2020.

(00:33:35):

And you can see that it jumped significantly, um, uh, or immediately came into the top four, I think, uh, once it was an answer choice in, uh, last in 2021. And now is, is even more important in 2022. Um, but even with the slight reduction in those selecting, and it’s still remained the most important factor driving organizations move to the cloud, um, right behind that is the pressure to modernize infrastructures a lower cost and simplify it. Um, it also saw a slightly lower proportion of respondents than last year, um, but it remained the second most important factor behind respondent’s cloud deployment strategy. Um, moving up from the fourth most important strategy, uh, last, uh, last year is the pressure to deploy more flexible and readily accessible solutions to the support, a more distributed usage. That was sixth in 2020, moved to fourth last year, and up to third this year.

(00:34:38):

Despite seeing no real increase in the number of respondents last year, um, did see a, a jump this year. Um, I think it’s important because as, as global organizations are working, um, you know, they want to have systems that are more readily accessible to dis a distributed user base. And with they’re distributed b user base with people still largely continuing to work out of the office, um, I think that’s, that’s sort of more important than ever. Um, sorry. And then lastly, um, also seeing a jump from 2021. In fact, um, a significant jump from 20 to 25% is the need for a more secure and resilient infrastructure to support a changing business landscape. Um, so it’s nearly a, a, a 25% jump, um, from last year. So given that organizations are focused on security and keeping systems available 24 by seven, it’s really not a surprise that this driver has moved to the six most important factor driving cloud deployment strategy last year to, to equal third this year.

(00:35:49):

So what actions are organizations taking in response to those strategies while remain in the most important strategy that organizations are using to support the enterprise cloud deployment? Is that of redesigning IT platform and architectures to lower cost and increase flexibility. Um, is there a bit of a drop last year from, from 68 to 52? It still remained the most popular strategy or the most likely strategy organizations were taking, but it’s gone back up again this year. Um, so it’s, and I think it’s, it makes sense that organizations need to reduce the cost of their infrastructure. They have legacy systems. Some of ’em are very expensive to maintain now, and they’re looking to increase the flexibility of their landscape. I mean, you can do that to a certain extent by, um, implementing virtualization. I mean, if you virtualize many of your systems together, I mean, you can run workloads across multiple systems and you can better utilize the existing systems that you have, um, and, you know, with allow you to do more with your existing systems.

(00:36:56):

But, and that sort of makes the most of your cost, but it doesn’t necessarily reduce the cost of those systems. Um, something that did see a big jump this year, um, excuse me, is the strategy of investigating cloud-based solutions or provide functionality that on-premise systems lack. I talked about this a little bit more a little bit earlier, but more vendors and s a p in particular are prioritizing enhancements and new features in cloud-based solutions. Um, and only providing limited updates, maybe just security fixes to traditional on-premise solutions that are still being supported. Um, I mean, if you’re a user of an enterprise ER p system from a p, you know, that since SAP P s for HANA was released in, what was it, 2015, um, s SAP P hasn’t provided enhancement pack for E C C or Business Suite. Um, they’ve certainly provided patches, but they’re not providing new functionality there.

(00:38:04):

Um, and although initially s SAP s for HANA Cloud didn’t have the same functionality as SAP S for a hana, theirs, SAP is now, I think, going to start emphasizing. I mean, if you’re in the cloud, you get updates every six months and those are automatically deployed to your environment. I mean, you do get a bit of a choice, um, particular if you’re using private cloud exactly when those that deployed. Um, but enhancements are coming there faster than they’re coming to on-premise releases. And I think the jump in the number of respondents pursuing this as a strategy reflects that there’s a greater emphasis in only enhancing cloud-based solutions from many vendors. Um, yeah, dropping slightly from last year is the need to create an r ROI cost and risk model for the cloud. Um, cost focus strategies make up two of the top three strategies being pursued by respondents, and it shows just how important cost is to moving to the cloud.

(00:39:01):

Um, you know, there may be a greater flexibility in an operational model, but that doesn’t necessarily mean that organizations are willing to make decisions around cloud moves without evaluating and understanding the cost of doing so. Uh, and then lastly, prioritizing business and IT workloads in the cloud. Um, it’s continued to to, to sort of trend down over the last two years. Um, and I think, you know, and I think that sort of re reflects the fact that as vendors are prioritizing cloud-based solutions from a functionality standpoint, customers are needing to prioritize cloud-based solutions. I mean, organizations in the past were sort of just prioritizing putting their workloads in the cloud. Now they, they don’t really have a choice. It’s, it’s sort of like, although it’s a strategy they’re pursuing, they’re really looking at the cloud for other reasons than simply they want to put workloads in the cloud.

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In terms of some of the, some recommendations here, um, explore your cloud options that are gonna provide bene benefits beyond updating infrastructure. Um, organizations are under pressure to modernize infrastructure to lower costs, right? They also want more flexibility while moving to the cloud can support those needs. The top factor impacting cloud decisions is that if a business focus on digital transformation is that, yeah. Um, so ensure that as you make decisions around cloud options, they’re not only meeting your immediate needs of reducing cost and providing greater flexibility, but they’re also pull up providing a platform for future innovation. This is certainly something we’re gonna be talking about more in research over the next, um, next couple of months. Um, so this will allow you to do more than just move workloads, but modernize processes and truly leverage the environment into which you are investing. Um, dedicate time to a thorough analysis of the cost risks involved in moving to the cloud to ensure you can meet your cost reduction goals.

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So moving to the cloud provides an environment that is based on operational expenditure rather than capital expenditure. However, while there may be reduced initial investment in local infrastructure, as would be the case with the new on-premise environment, is important to pay attention to the other costs associated with the cloud. When defining your model for R roi, how much do you need to pay an ingress and egress fees from moving data in and out of your cloud environments? What will the cost add up to over the next five years? Would a software as a service environment be cheaper or more expensive over the next five years? Um, every organization is unique. You all have a, a unique landscape that is not only, um, unique to, in terms of the systems that you have, everyone has a different combination, but in terms of the way that you do business.

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So it’s important that your analysis include your specifics is they may not be the same as general guidelines or comparisons with standard environments. Um, and identify when cloud-based solutions will provide feature parody with your on-premise solutions so that you can time your move appropriately unless they were developed as cloud first applications. And, and some were, uh, like success factors solutions that vendors like s A P are moving to the cloud typically originated with on-premise versions. Over time, cloud versions have reached feature parody with their on-premise versions, but this is not necessarily the case in every situation. Even S A P S for HANA has only recently reached feature parody with some of the industry industry specific modules that have been available in E C C for many years despite being launched in 2015. So as you start to move workloads to the cloud, particularly because organizations that are looking to invest in cloud-based solutions that provide functionality that on-premise systems lack, ensure that you time any move so that the features you need will be available when you get there.

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Now, some of the different requirements when it comes to requirements for the cloud, having strong SLAs with cloud partners has been one of the top four requirements for respondents since 2021. Um, interestingly, it became less important as a factor for organizations selecting a cloud service provider, I think because there’s a lot of parity in the SLA that these providers offer. Um, but with more organizations moving workloads of the cloud, that’s now the top requirement for organizations. They want strong SLAs, but I think because they’re now being offered across the board, um, it’s, it’s a less important specific factor for organizations choosing which cloud provider they’re going to use. Oops, shouldn’t do that. Um, having a cloud base for data encryption and protection is important. Uh, it jumped to the top of requirements last year, um, had slightly fewer respondents selected this year, but it’s still very important for organizations.

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Um, given that the driving factor for organizations moving to the cloud was the need for a more secure and resilient infrastructure, it sort of makes sense that encrypting and protecting that data is one of the top two requirements for respondents. Um, slipping very slightly is a need for data storage and protection requirements, uh, just as important as security features. Um, a security feature is data encryption and protection. Data storage and protection requirements, uh, can cross both cloud and on-premise deployments. But it’s obviously a critical requirement for organizations putting data in the cloud. You wanna make sure that it is stored and protected in the cloud. It’s not necessarily gonna be readily exfiltrated. Um, um, but I think it’s, it’s very relevant or continues to be very relevant that two of the top three, um, requirements for organizations moving to the cloud are security focused. Um, data encryption, protection, data storage and protection requirements.

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It’s, it’s very important for organizations that their data in the cloud is just as secure or more secure than it would be anywhere else. Um, CLEs and harmonized data is important. We’re moving to the cloud because I think many organizations are utilizing cloud databases and data services as one of their main, excuse me, main reasons for moving to the cloud. Um, given that there is often a desire to combine the data in these databases with data from other sources, it’s important that data be harmonized before moving to the cloud. Um, without this is, it is difficult to derive as much value from what is moved and given that the price is based on usage in the cloud, the more data that’s moved, the greater the cost. Um, it’s also a factor in a desire to clean and harmonize data moves to the cloud, you clean and harmonize your data, you move it to the cloud.

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Not only are you moving less data, less redundant data, the data that you then have in the cloud is more accessible for things like machine learning and artificial intelligence, which are often cloud-based tools. Um, and then maintaining about the same level of importance as last year is the ability to scale flexibly and quickly. This is one of the main reasons for organizations leveraging cloud-based solutions in infrastructure, the ability to increase and decrease resource re resources very easily. Now, this is something that on-premise infrastructure can’t provide, uh, due to the high initial cost. Um, so, but it’s always been a reason for, uh, a requirement for organizations moving to the cloud.

(00:46:56):

Okay. What are some of the technologies that are fulfilling for requirements? Well, like I said, when we ask organizations to rate the technologies, they’re to, to sort of talk about the technologies they’re using. Um, first we have those that are currently in use. Then we have those that are being either implemented today or implemented in the next 12 to 24 months, and then we have those that are being evaluated. Um, we start off, uh, this particular view by looking at what is currently in use. So as you can see, encrypted and secure connectivity, this is something that 30% of respondents are already using. Um, you know, I think it makes a lot of sense. Uh, I, I’ve recently talked with, um, you know, some, some, um, some organizations are simply putting in place secure connectivity, um, from their end users, maybe a VPN or something like that, although it only offers a certain amount of, um, protection, uh, other organizations are actually putting in place systems where everyone connects to, um, you know, a company like, uh, you know, uh, Palo Alto Networks or something like that.

(00:48:09):

Um, and then their data is encrypted across that to where they, across their network to where the cloud service provider is. So they’re not necessarily running a VPN n to the office and then connecting, which would, you know, many organizations do, uh, and made sort of sense when, um, systems are primarily running in on-premise environments with the cloud, that perhaps is now being taken a step further so that organizations are connecting to a, um, to someone that will actually accelerate their, uh, data across, uh, in its journey across the internet, right? They’re not necessarily relying on the internet backbone to get to wherever the data is stored, but they’re relying on, um, a network provider that that’s running all on their internal networks. Um, cloud backup and recovery is also important. Uh, cloud database and data services, dedicated connections to cloud providers. Um, virtualization and infrastructure.

(00:49:16):

I, I think this is relevant. Um, many organizations are look at hyperconverged infrastructure as something that is an advantage to them because it’s possible for them to sort of switch out the provider on the back end without that necessarily needing to change anything on the front end. It’s sort of invisible to administrators, it’s invisible to, um, users, and it can be invisible to systems when that, when that happens. Um, cloud development tools, particularly if you’re looking to sort of extend your systems based on what you have in the cloud and data encryption tools, very important for, um, securing data once it is in the cloud. So what are the, what are the technologies that are being implemented? Now, this is where we sort of start to see some differences. Obviously, encrypted in secure connectivity was the most likely technology to be used by respondents today, but 40% are implementing it, but it’s not one of the technologies that are most being implemented over the next two years.

(00:50:21):

That’s cloud database and data services. And this is where I think organizations moving workloads into the cloud is important because, you know, we talked about, um, cleansing data before going to the cloud because you’re gonna put it in a cloud database, you’re gonna put it in a cloud data services, and then you’re gonna leverage that to run things like analytics and planning, machine learning, um, artificial intelligence on that data, on that pool of data, which is gives you more insight to what’s happening within your organization. Um, cloud development tools more likely to be implemented, uh, over the next couple of years than other, some of the other, the other technologies. Um, go moving to, for example, s sap business technology platform. You need to have development tools. If you’re gonna use that, you need to have development experience so that you can build on top of that to better leverage your cloud investment.

(00:51:22):

Uh, data encryption tools the same way, um, make sense that you’re protecting your data that’s in the cloud. Cloud a cloud AI and machine learning, I think that very much ties into cloud database data services because these are technologies that can potentially leverage that, um, encrypted or secure connectivity, um, dedicated connections to cloud providers. I think these, uh, uh, still important, and this is particularly where, you know, having a company, um, you know, that, that actually you can connect to, to, to streamline your data connection to the cloud is important. Uh, and then cloud backup recovery, these are these. So these are the technologies that organizations are most likely to be implement or are gonna be implementing over the next 12 to 24 months. Um, technologies that’re evaluating. Um, quite a lot of companies are evaluating cloud iron, Mach, ai, machine learning. I think some companies that have already moved to the cloud are looking to implement it.

(00:52:19):

Those that are perhaps not running as many workloads in the cloud are evaluating those technologies. Um, virtualization and hyper-converged infrastructure. Uh, cloud development tools, cloud data lakes, uh, data encryption tools, learning services. I think the only one we haven’t really seen before, we, we hadn’t seen cloud data lakes show up in terms of either currently news today or in being implemented. But I think creating these data lakes and the, the way that they’re different from cloud databases is that a data lake can include both structured and unstructured data, and it can be a repository for everything that’s happening across your organization. Um, cloud learning services are also valuable for organizations. This is the way that you can train people, uh, across the organization. And then cloud backup and recovery is being evaluated. So what are some recommendations we can make, um, around, uh, requirements and technologies?

(00:53:17):

Firstly, prepare your data so it can be effectively utilized as soon as you get to the cloud. Um, cloud environments offer greater flexibility and scalability as well as making it possible to deploy solutions more rapidly. But they’re also price based on processing power and storage. So while many organizations look at the cloud as a means to create data O’Lakes and integrate data with external sources to provide a greater depth of insight, your data has to be cleansed and harmonized for that to provide the most value and be relatively economical in your use of space, ensure that you dedicate time to preparing data for the moves of the cloud and the inclusion in, in any cloud data stores or data lakes. Now that’s gonna ensure that it can be the foundation of the insights that you need. Um, secondly, explore cloud service that was a help services that will help provide additional benefits and drive innovation beyond your initial move.

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So cloud AI and machine learning is one of the least used technologies by respondents today, but 41% plan on Im implementing it over the next two years, and an additional 32% are evaluating it now. That’s because it’s, those are technologies that will help provide future value to data and solutions that you’re already running in the cloud. Taking the time to explore those services and others that are like them that are gonna help you increase the R ROI on your cloud investments and leverage the data and solutions you already have in the cloud are very important to the organization. And then lastly, educate your teams to utilize cloud development tools so that they can extend your cloud deployments. Most s SAP organizations have teams of our developers who’ve helped put, who helped them build the environment they’re using today. Um, development of cloud-based solutions requires a very different set of skills.

(00:55:07):

Building services based on the business technology platform does not use a up, up as will extensions that use third party services or technologies. Educating your teams is a starting point for this, but some organizations have decided that recruiting resources with the experience they need will provide better success than trying to retrain up up developers, for example. Um, either way, it’s important that you prepare your teams to leverage cloud specific development tools so that they can innovate on your cloud deployments. Okay, just a couple of additional insights that we saw, um, from respondents. Uh, what types of implementation partner are you using to support your cloud deployments? Um, you know, not really surprisingly, nearly half the respondents said that they’re, you know, using an implementation partner who specializes in cloud deployments. Uh, a GSI 44%, uh, 42% said they’re using their usual implementation partner. And as you can see, these numbers, you know, potentially add up to more than a hundred.

(00:56:13):

So people may be using more than one implementation partner to support their cloud deployments. Um, data integration solution providers shows the importance of data analytics solution providers, 33%, uh, a regional si, uh, or I think only 3% said they weren’t using any sort of implementation partner to help them with moving to the cloud. So the overall recommendations that we have for the reporter includes security choice and requirements from the outset of your plans regarding the cloud. We’ve seen it across the research. Security is an absolute necessity in today’s s SAP landscape. Having the appropriate security in place in ensuring that systems are protected is a constant task for IT and security teams within every organization. The way to guarantee that you’re moved to the cloud provide the level of security you need is to include it from the very beginning of the planning process. Not only does this allow security teams, uh, to integrate new systems into existing plans, it can also prevent later delays that might eventuate from trying to retrofit security that’s appropriate to systems that may already be running.

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Balance your goals of reducing cost with the goals you need to achieve for a cloud transition to be successful. While the biggest measurements for success of cloud initiatives is that have reduced costs almost as important to topics like increased flexibility, improved security integration of existing applications, and reduced operational inefficiencies. But no matter what your success criteria are from an IT perspective, there must be a measurement of success from the business side. If cloud systems save money in increasing, increasing flex, increase flexibility, but but at the same time reduce user satisfaction and capabilities, your investment isn’t gonna provide the r o ROI you require. So in planning for the cloud, ensure that your fiscal and IT goals are balanced against other success metrics align with your cloud providers, software vendors, and infrastructure and operating system vendors about high availability and resilience plans. Um, most organizations that are moving more closely to the cloud are aligning with software vendors to ensure that their environment provides the availability, disaster recovery and resilience they need.

(00:58:28):

This alignment also happens with cloud providers through contract and SLA discussions, but often the vendors, the organizations do not align with are the infrastructure and operating system vendors due to the thousands of systems that are running on their environments. These vendors can be critical in ensuring that high availability is set up correctly for your s a P workloads that you’re moving, and that everything is configured for a successful failover should the need arise. Don’t overlook speaking with these experts to help avoid potential configuration challenges that they may already have experience in handling. And lastly, invest in training and education for your internal teams as much as in the infrastructure and platforms that you’ll run in the cloud. Organizations that s SAP Insider have spoken with have been able to drive success in moving to the cloud primarily by having their internal teams ready and prepared for the new environment and technology. By having a well prepared internal team, there’s already up to speed on the environments you’ll be using. You are able to more rapidly diagnose and correct problems that occur and more capable of working with vendors to troubleshoot problems that you cannot fix internally. While experienced team members can come up to speed as they work on a project, there is no substitute for ensuring your team is fully prepared before starting any project.

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Uh, thank you for attending today’s webinar. Um, shortly after the event, you’ll receive an email reminder to access the presentation on demand along with today’s slideshow. Uh, so on behalf of SAP Insider and our sponsors from NetApp, pwc, red Hat, Susa, and Vertex, thank you for your time and have a great day.