Increasing cloud acceptance
Only 40 percent of ASUG-DSAG members are already productive with SAP S/4 or have started corresponding projects, meaning that half of the committed and active SAP existing customers have still not reached where SAP originally wanted to be in 2025. The market as a whole seems to be lagging behind these figures: analysts and market experts estimate S/4 conversion at just one-third. These are sobering figures for SAP.
No long-term strategy
The reasons for SAP's weak performance in this year's summer survey by the two user associations ASUG and DSAG can also be found in a recent study conducted in Switzerland among around 100 CIOs with SAP responsibilities: SAP strategy and the expectations of existing SAP customers diverge, writes study author Peter Hartmann. Although the proportion of S/4 users has increased slightly, much remains unclear for existing customers. The main points are: Products and roadmaps are missing, lack of integration and consistency of S/4 products are insufficient, poor price-performance ratio in maintenance models and especially deficiencies in service quality, SAP licensing is non-transparent and too complex, PKL is incomprehensible. Similarly, there is a lack of clarity regarding the integration between cloud and on-prem, notes Peter Hartmann in the management summary.
ASUG-DSAG also conducted a detailed survey of the relationship of existing SAP customers to cloud computing and, of course, their attitude to on-prem. The general attitude of DSAG members towards the cloud only tends to be positive, with positive experiences, however, especially in the non-SAP area.
Slow S/4 growth
According to an evaluation of a joint survey conducted by the Americas SAP Users' Group (ASUG) and the German-speaking SAP Users' Group (DSAG) in April and May of this year, the spread of S/4 and Hana continues to increase among members of both associations. In a direct comparison, the S/4 on-prem approach clearly dominates among DSAG members. There is unanimity on the subject of licensing models and costs, which all respondents see as the greatest challenge in the use of cloud services.
The general attitude toward cloud computing is somewhat to very positive among 74 percent of ASUG members. Among DSAG members, the figure was only 46 percent. "Approval for cloud solutions continues to grow in the DACH region, although not at the same rate as the U.S. SAP Users' Group"comments Jens Hungershausen, Chairman of the Board of DSAG. "This could be related to the reservations of many companies in the DACH region about placing sensitive company data in the cloud. Viable concepts and persuasion are still needed here."
This finding is also consistent with the results of Peter Hartmann: "Of course, we have a commitment from core customers in favor of SAP, but little enthusiasm for cloud-only. We see a clear preference for on-prem systems and continued dissatisfaction with pricing and licensing policies, as well as quality deficiencies in maintenance and services."
In terms of experience with SAP cloud solutions, 57 percent of ASUG members are rather to very satisfied, but only 30 percent of DSAG members. A rather or very negative attitude is held by 21 percent of DSAG members and five percent of ASUG members. The picture is different in the non-SAP area. Here, on the other hand, 65 percent (ASUG) and 60 percent (DSAG) are rather or very satisfied with the cloud solutions used. And only two percent (ASUG) and seven percent (DSAG) have a negative or rather negative attitude. "The fact that only around a third of DSAG members are satisfied with cloud solutions in the SAP area, but 60 percent are satisfied with cloud solutions in the non-SAP area, surprised us. It shows that SAP has obviously not yet satisfactorily solved important issues such as integration, licenses and security. The providers in the non-SAP area are probably much further ahead in this respect."explains Jens Hungershausen.
Skepticism about cloud
Both user groups (DSAG: 72 percent, ASUG: 41 percent) see the biggest challenge in using cloud services in the issue of licensing models and costs - followed by data protection and information security (DSAG: 53, ASUG: 25 percent) and the lack of integration (DSAG: 41, ASUG: 15 percent). "The result shows how important easy access to cloud services and their price and service descriptions are when it comes to licensing. This importance will continue to grow due to the many different metrics in the products and the interdependencies of cloud services."Thomas Henzler, DSAG Board Member for Licenses and Maintenance, summarizes.
The SAP licensing model FUE, Full Use Equivalent, hangs over existing SAP customers like a sword of Damocles. It's one thing for customers and suppliers to have different views on product pricing, says Peter Hartmann, summarizing the opinion of Swiss CIOs - but the fact that SAP deployment becomes more expensive with each new product for the same benefit is not satisfactory from the customer's point of view.
Cloud license solutions (FUE) make SAP operations unnecessarily expensive. Thus, existing customers demand more security in TCO and more flexibility for license and maintenance costs. Perennial issues such as indirect use and too little flexibility in the event of business changes remain the main concerns of SAP's existing customers. And Peter Hartmann was able to find out something else: Product maintenance for ECC 6.0 is constantly being phased out and products that were licensed in ECC 6.0 have to be re-licensed for S/4 or the same function is not yet available.
On-prem very popular
Both among the Swiss CIOs and in the ASUG and DSAG survey, the topic of cloud computing versus on-prem was a central theme: Of those who made an indication here, more than twice as many DSAG members (57 percent) as ASUG members (27 percent) use S/4 on-premises or plan to do so. When it comes to cloud environments, the private cloud approach is almost identical at 23 percent (DSAG) and 24 percent (ASUG). Twelve percent (DSAG) and 19 percent (ASUG) rely on a managed cloud. S/4 in the public cloud, on the other hand, still plays a rather minor role.
The majority of DSAG members will continue to rely on S/4 on-prem in the future. Only just under half of those surveyed have a positive attitude towards the cloud, and a further quarter are neutral. The greatest challenges currently arise in the licensing models and costs. There is still room for improvement in knowledge about Rise with SAP. Only 33 percent of DSAG members are already familiar with it and only ten percent currently consider it likely that Rise will be considered for them. A lot of educational work is still needed here, both on the part of SAP and DSAG. Survey basis: 271 participants were registered in the survey in North America, 172 in the DACH region.
All questions open
There is still a lot to be done. Peter Hartmann has compiled the comments, questions and wishes of Swiss CIOs: SAP products are too expensive; cloud solutions are more expensive than on-prem installations; cloud exit has not been solved; there is overlicensing that cannot be removed; a non-transparent licensing model and thus unpredictability of future costs; subscription fees can increase massively in the cloud; and license management with SAP on-board resources remains impossible. The confidence of SAP's existing customers that these questions will be answered and the suggestions implemented is still there.
