SAP Hybrid Cloud and AI Strategy

E3 Magazine spoke to Hussein Keilani and Volker Sommer from Fsas Technologies and Jens Adam and Friedrich Krey from Suse about the "S/4 Conversion" development and roadmap. Both companies are long-standing SAP partners and are familiar with almost all developments, trends and innovations in the SAP community. The added value now lies in open and transparent consulting with the following starting point: The SAP landscape is divided into SAP S/4 Hana and SAP BTP. In the Hana and S/4 area, Suse provides the SLES for SAP applications as an optimized Linux platform. On the Business Technology Platform (BTP) side, the SAP Integration Suite is operated, which controls the Edge Integration Cell as an on-prem extension. This is where the Suse Kubernetes platform with Suse Rancher is used for SAP applications. The topics of high availability, automation and security are relevant for both SAP on Linux and SAP on Kubernetes. Suse thus provides the platforms for a hybrid ERP architecture.

DSAG Investment Report 2025

On the occasion of the current investment report, the German-speaking SAP user group (DSAG e. V.) has raised the question of how SAP's S/4 Hana cloud strategy should be assessed for companies and organizations. An empirical study shows that only 38% of SAP's existing customers have a positive attitude towards the company and its products and services. According to the results of the study, the attitude of 56 percent of study participants is neutral to very negative. Six percent of respondents did not provide any information. The results suggest an increased disposition among existing SAP customers to make significant future investments in pioneering technologies such as artificial intelligence and platforms, as well as in SAP solutions in some cases. The increasing relevance of artificial intelligence and cybersecurity illustrates the current challenges and opportunities that companies are facing. The increasing use of cloud services, the positive development of the S/4 cloud strategy and the growing importance of AI illustrate the urgency of driving forward technological development in order to remain competitive. At the same time, an increasingly differentiated picture is emerging in the use of on-prem solutions (ERP/ECC 6.0 and S/4 Hana), meaning that the SAP "cloud only" approach is no longer accepted. When it comes to using ERP systems, existing SAP customers show a clear preference for hybrid systems.

"A hybrid ERP architecture with Fsas Technologies and Suse can be an application-specific environment that supports applications and data either on-premise, in the cloud or in a privately managed cloud, or a combination of these," explains Hussein Keilani, SAP Solutions Business Manager at Fsas Technologies, at the start of the E3 discussion. "The concept of a hybrid environment is not new, but the data management and application-specific functions are unique and different. You can manage, control and assess a hybrid environment at the data and application level, not just at the virtual server level. The benefits of the hybrid solution are that it gives customers the ability to create a secure data-driven environment, comply with regulations and benefit from AI without full exposure to the public cloud, and the most important feature is the control of costs, especially ongoing costs."

Friedrich Krey, Director SAP Market EMEA Central at Suse, explains the advantages of a hybrid IT architecture in a similar way: "The cloud part of an ERP architecture provides a high level of standardization and automation, while the on-premises part of the architecture covers functions that have special requirements in terms of latency, high availability and security." And his colleague Jens Adam, Global Sales Director of the Fujitsu Alliance at Suse, adds: "The hybrid SAP ERP architecture utilizes the exact advantages of a cloud and on-premises architecture so that the ERP can be assembled from various components that make sense in the respective application scenario. Composable ERP is a modular, cloud-based ERP. The main difference between hybrid SAP ERP architecture and composable ERP lies in the modularity and flexibility: while a hybrid SAP ERP architecture is based on the existing SAP platform and gradually moves to the cloud, a composable ERP is an agile, cloud-based approach that thrives on modular, independent solutions."

Trend towards hybrid ERP

Returning to the latest DSAG investment report, in which a trend towards hybrid ERP systems can be seen based on multiple responses, Friedrich Krey provides an interpretation in the E3 discussion: "Hybrid architecture and cloud are not mutually exclusive. This can be seen in the example of the Edge Integration Cell, where cloud architecture is possible through containerized applications in a cloud environment and in an on-prem solution. Certain parts are provided in the standard SaaS architecture, an extension of this architecture is based on containers and can be continued in an on-prem implementation. It takes place where the application can be supplemented by the on-prem implementation." Open source platforms are characterized by the use of open standards and are therefore an integral part of cloud architectures such as Linux and Kubernetes. They have proven themselves as established standards in hybrid architectures. In a hybrid ERP architecture, the aim is to combine different technologies in order to unite the advantages of on-prem and cloud systems. Although open source is not necessarily a component of a hybrid ERP architecture, it can certainly play an important role, especially in conjunction with Linux and Kubernetes in SAP environments.

A legacy SAP customer may take a completely different approach to hybrid, "but our approach is an application-centric approach and we help the customer find the best solution for their performance, data and applications," says Volker Sommer, Head of SAP Business Europe at Fsas Technologies, in the E3 interview and he adds: "Remember that implementing all systems in one environment can sometimes be risky and costly. That's why we help improve processes, secure data and reduce costs through a hybrid environment." His colleague Hussein Keilani explains: "Our approach is simply to keep up with the cloud. Yes, we help our customers move to the cloud, but we want to move to the cloud intelligently through a hybrid environment - remember that Fsas Technologies offers Flexframe technology alongside the on-prem platform, which is also a privately managed cloud."

Private Managed Cloud

Hybrid can be on-premise or in the cloud, but the most interesting is the privately managed cloud, which can work seamlessly with the public cloud. "Our Private Managed Cloud Flexframe has powerful application-based features," Volker Sommer adds to E3 Magazine, "because cost is one thing, data security and data disclosure is another. The restrictions in the public cloud are also a problem. The lack of SAP systems also plays a major role here. It is evident that the commercial advantage of a suite, especially with SAP, becomes clear with a complete solution from a single source. Both technically and commercially - i.e. transparent cost structures and contract models. As an SAP Business Suite cannot cover all of today's use cases, long-term support for partner solutions is required as part of the SAP Clean Core strategy. This conclusion is based on SAP's S/4 maintenance commitment until 2040 and is in the common interest of partners, user companies and SAP itself.

Business Suite and BTP

In the announced business strategy, which was presented at the SAP Business Unleashed event in February of this year, SAP is focusing on the core elements of processes, data and AI with the aim of providing efficient process chains. In addition, end-to-end processes based on the Business Technology Platform and integrating different technology stacks and cloud services are increasingly being offered in the cloud. "Although SAP is undoubtedly working on harmonizing and integrating the solution portfolio, a consistent architecture is crucial for the success of the announced Business Suite. To ensure this, it is essential that SAP continuously harmonizes the product landscape and consistently implements uniform standards, for example in the area of data models and identity and security services. By definition, a suite therefore requires the seamless integration of the SAP solutions it contains, uniform operating models and clear migration and implementation strategies along the way," explained Sebastian Westphal, DSAG Board Member, at the Technology Days 2025 in Wiesbaden.

Friedrich Krey was also at the DSAG Technology Days in Wiesbaden and believes that an SAP Public Cloud is based on a predefined standard with fast innovation and update cycles: "The architecture is supplemented by the BTP approach in order to be able to make individual adjustments. The extension of SaaS components from the BTP to the on-prem system makes it possible to map additional application scenarios in the areas of latency, HA and security. This does not raise the question of whether one or the other, but rather: In which area do you rely on high standardization, where do you rely on individual adaptations and where do you use the advantages of the on-prem approach? An optimal hybrid architecture can be created with all approaches." Jens Adam explains: "SAP BTP is an essential component of a hybrid cloud architecture for an SAP landscape. It enables the individual adaptation of processes and connection of external systems to the SAP Core ERP in order to implement the 'Keep the Core Clean' approach. SAP BTP is the bridge to possible on-prem parts of the SAP application landscape, as can be seen in the example of the Edge Integration Cell."

"BTP has several tools that help build the enterprise architecture, the hybrid technology platform is one of the pillars," Hussein Keilani knows from his professional practice. "For example, SAP LeanIX helps with enterprise architecture and application flow to support the enterprise strategy on one platform, SAP Signavio helps the processing system for an enterprise. So the answer is yes, but it's much more than just evaluating the hybrid environment." His colleague Volker Sommer from Fsas Technologies explains: "SAP's strategy is a pure cloud strategy, but the concept of private managed cloud is on SAP's books.
also a cloud. SAP does not fully support on-prem solutions. To summarize, cloud encompasses several concepts. Please note that the SAP strategy is Rise with SAP and Grow with SAP."

The cloud operating model

The goal of a cloud ERP system as part of the "new" SAP Business Suite, whether as a public or private cloud edition, is to be achieved through a Rise or Grow for existing SAP customers. The problem is that the Rise product is not necessarily more cloud than an SAP system that is already running on a cloud infrastructure, as SAP itself admits. Consistent further development towards a uniform operating model for all SAP services used is therefore required. "The high level of integration into existing operating and service processes of user companies is therefore an important success factor," defined Sebastian Westphal as DSAG Technology Director in Wiesbaden this year. It is particularly relevant for medium-sized companies that their enterprise architectures can be operated in a comprehensive and uniform manner. From DSAG's perspective, it is positive to note that the Rise Migration and Modernization programme initiated last year is to be continued for customers in 2025 under a new name.

fsastech.com

To the partner entry: