Cloud or not cloud - that is not the question

E-3 spoke with Roger Illing, Vice President Enterprise Sales EMEA at OpenText, about SAP's cloud strategy. As a specialist for Enterprise Information Management (EIM), OpenText is one of the first SAP partners to have formulated its own SAP cloud strategy and is already delivering solutions for the SAP cloud.

E-3: Many existing SAP customers are still unsure about the cloud. What do you tell them?

Roger Illing: I can understand these concerns, but only if you look at the cloud in isolation. If, on the other hand, you discuss digitization with companies, in which the cloud can play an important role, you very quickly see a change in thinking.

Because that has arrived in the companies: Digitization cannot be stopped (editor's note: see interview with Hans-Gerd Schaal starting on page 48).

E-3: And what about security and privacy?

Illing: You are right, security and data protection are the basic prerequisites for the new digital business models. But we are seeing the trend toward vendor clouds. These are private clouds that involve end customers, but also retailers.

E-3: Doesn't that get in the way of SAP's goal of having its own business cloud?

Illing: Not at all. You're alluding here to multi-tenant applications and infrastructures that are shared by multiple customers. Salesforce has proven that there is very strong demand for this model.

And that's how it will be for numerous SAP applications. But the truth is: the future will be hybrid.

Intellectual property and data requiring special protection remain in the private cloud - whether in the company's own data center or with an external provider such as OpenText - while companies can increasingly access the offerings of large cloud providers for the rest.

E-3: A private cloud, but not in your own data center?

Illing: Yes, of course. This has many advantages for the companies. They can get started much faster than if they were doing the implementation themselves. They don't have to worry about operations, but they also don't have to worry about security and compliance.

Thirdly, they can adjust their capacity requirements more quickly and flexibly and transfer responsibility for this to the cloud service provider. Finally, they do not need to build up internal expertise to operate the applications and the matching infrastructure.

Overall, a private cloud frees up resources for users, which are then available for the core business.

E-3: These sound like sales arguments for the OpenText Cloud.

Illing: In principle, these arguments apply to all cloud providers, but to us in particular. First, we are software manufacturers, so we know our own solutions perfectly, which has a positive impact on security and operational reliability for customers.

Furthermore, few companies can offer a worldwide network of data centers; after all, with GXS we operate the largest global network for business transactions. Our customers are free to choose in which country and in which data center which of their data should be located.

And then perhaps the most important thing from a European perspective: As a Canadian company, we are not subject to the US Patriot Act, which is now called the Freedom Act.

E-3: Is not only SAP but also OpenText now pushing customers into the cloud?

Illing: There is no either-or here. Basically, it's about offering our customers the full range of options. As I said, the future will be hybrid.

The question is not, everything in the cloud or nothing. It will be a combination of all options. But by offering these choices and providing the necessary infrastructure, we can guide customers on their individual paths to the cloud.

In addition to infrastructure, we will provide more and more solutions for both our own and the SAP cloud. However, these can also continue to be implemented on premise. I think SAP is thinking along similar lines on this point.

E-3: In addition to the security issues, many existing SAP customers are put off by the costs.

Illing: All new SAP offerings are knitted around Hana. And those who don't want to or can't move to the S/4 Hana Cloud will have to make hardware investments. That's right.

But we can help here, too. With our archive solution, customers can store and retain legacy data together with their business logic cost-effectively and for the long term.

At the same time, this allows them to successively switch off legacy systems. These cost savings help with the transition to the cloud and Hana world.

E-3: You make the cloud dependent on digitization - doesn't that just shift the question marks?

Illing: Of course, no one has yet come up with the ultimate answer or solution for every company. After all, digitization does not simply mean the electrification of the existing business model.

Just as e-locomotives have enabled many new and faster train connections over the years, digitization will enable companies to open up new business areas, modify the existing business model and ultimately develop a new business model.

E-3: Is the cloud the solution for this as well?

Illing: In part, yes. But the cloud will not be able to solve everything. Companies will gradually switch to cloud infrastructures. I emphasize once again: the future will be hybrid.

But when it comes to introducing new services quickly and flexibly, the cloud is certainly an option. Against this background, however, another topic is almost more important, one that has lost some of its attention in recent years: integration.

E-3: What do you mean?

Illing: Even existing SAP customers know: Not all business processes are fully covered by SAP. One example of this is design data and documents, so-called engineering documents.

They flow into the documentation, must be linked to documents from quality assurance and testing, and are handed over, at least in part, together with the finished product to the customer or to leasing companies, which then also pass the documents on to the actual operators of the plants. Maintenance teams must be able to access them from outside.

This also applies to colleagues from the claims department, in order to be able to check complaints claims, and last but not least to the legal department, which is likely to use SAP in very few cases.

E-3: And you offer solutions for all that?

Illing: Information management is OpenText's core competence. The content and the links between it and the corresponding SAP data are stored in our Extended ECM solution, and can be managed and accessed directly in SAP.

They can be personalized via output management and forwarded to partners or customers via all possible output channels - e-mail, fax, paper, web, for example. They can also be forwarded ad hoc via secure file exchange services and are always evidence-proof because they are archived in an audit-proof manner.

If information is still stored in legacy systems, we use our Infofusion integration platform so that other data pots can be accessed via our enterprise-wide search.

E-3: Are there already examples of a successful digitization strategy?

Illing: Our customer T-Mobile in the USA has gone from being a problem child to the fastest-growing mobile provider. Why?

Because it has removed the contract commitment of two years, which is annoying from the customer's point of view, a complete novelty in the mobile communications market. After all, customer needs change faster than every two years.

E-3: And the customers don't migrate?

Illing: On the contrary. The notice period is only one or two days. During this time, T-Mobile sends them a tailored new offer based on an analysis of their previous usage data.

Of course, they receive the offer on their preferred channel, by e-mail or directly on their smartphone, for example. And these new offers are apparently so good that the churn rate is less than two percent!

E-3: How is that possible?

Illing: The keys are flexibility and speed through fully digitized and integrated processes to the end customer and a high rate of automation.

As a result, T-Mobile is just as fast and flexible as end customers expect and appreciate. The growth rates are the best proof of this.

E-3: Nevertheless: Possibilities are not yet a must.

Illing: Digitization opens the door to a killer competition. Start-ups are beginning on a greenfield site, using the cloud and have no integration problem.

If their ideas catch fire, they can overtake established providers of whatever size and ultimately knock them out of the field. Experience has taught us that many times.

Is it any wonder that automotive manufacturers from Germany are now among the pioneers of digitization? Is it surprising that banks are increasingly buying start-ups from the FinTech sector?

Companies don't have to solve everything right away, but they do have to start digitizing now and need concepts and solutions for process-oriented information management to do so. They have no other choice.

E-3: Mr. Illing, thank you very much for the interview.