Lift and Shift and SAP
Former SAP CFO Luka Mucic has always been open and clear about why the public cloud is the best business model for SAP: it brings SAP better and higher revenues in the medium term. A subscription that is hard to get out of provides the ERP vendor with a regular, secure, and predictable revenue stream. Luka Mucic is all about stability and predictability.
For SAP, the public cloud is not about innovative technology, more efficient operations, better customer service, or faster support, but simply about the predictability of the future. A subscription model or cloud subscription without an exit option is like an annuity for life. As long as the technology works reasonably well, the money keeps coming in.
But there has to be so much technology that the complexity of the ERP offering means that users rarely get a chance to leave the system. Once users are lured into the cloud labyrinth, it seems almost impossible to escape, because who would think of Ariadne's thread out of the labyrinth in time?
SAP customers would need the genius and courage of Daedalus to escape their fate. In the face of Greek mythology and tragedy, the cloud term "lift and shift" surprisingly takes on a whole new meaning. Lift and shift—i.e. to rise and disappear—is probably what many SAP cloud users wish for after the first increase in cloud subscription fees.
Escaping from the labyrinth, as Daedalus and his son Icarus once did, remains wishful thinking and, in the case of Icarus, not worth emulating. Poor Icarus was so happy about the freedom he’d regained (exit strategy) that he flew too close to the sun with his wings made of feathers and wax. The wax melted in the heat, the feathers lost their grip, and Icarus fell into the sea and drowned.
SAP's customers are unlikely to play the role of Theseus. The brave Athenian hero was advised by Daedalus to follow Ariadne’s string and entered the labyrinth—where he had to fight the Minotaur, a bull-like monster similar to SAP. He killed the Minotaur, found his way out of the labyrinth with Ariadne's string, and sailed from Crete back to Athens. Less heroically, he left his Ariadne in Naxos on the return journey. The opera Ariadne auf Naxos by Richard Strauss was written from this, but that is another story.
What remained was Daedalus, who was indirectly responsible for the death of the Minotaur, and who in a more modern historiography might be equated with a Gartner analyst. This analyst never had Ariadne's string for SAP customers, nor an exit strategy in the sense of lift and shift, but he did have some good advice.
Many years ago, when the cloud labyrinth was still small and manageable, he advised his audience in Barcelona to never voluntarily give up their own SAP license. Having your own software license is an insurance policy that gives you the freedom to choose between on-premises, private cloud, or public cloud.
In Greek mythology, those seeking advice made a pilgrimage to the Oracle of Apollo in Delphi. The modern equivalent is SAP customers travelling to the annual Gartner Symposium in Barcelona. The ancient Greek word symposium can also be translated as a drinking party, which of course does not correspond to the Gartner analyst event. This side note just takes us back to Ariadne on Naxos, where she enjoyed herself with the god of wine, Dionysus.
SAP became large and successful because it did not focus on operating systems, middleware, and databases, but instead focused uniquely and consistently on business and organizational processes. This founding virtue was lost with lift and shift. The focus is now on cloud computing as the optimal economic revenue model.
With cloud computing, SAP has found a system for maximizing profits. Every technical or organizational argument is a pretext. Luka Mucic has always been transparent about the fact that this is all about better predictable revenue—an exit strategy would only be disruptive and counterproductive. SAP customers need one of Ariadne's strings for their own personal lift-and-shift concept.
