Why SAP will fail in the cloud business

SAP integrated SAP SI, but the consulting company's expertise went to T-Systems. To this day, SAP has not recovered from this loss, as the latest reports from the community show: Existing customers who opt for HEC, SAP's Hana hosting, have to cancel projects due to a lack of integration knowledge and project experience.

Just as SAP "rationalized away" its hosting expertise in 2004, some existing SAP customers have now also rationalized away their "IT expertise" because they want to move to the cloud anyway.

Now these users have decided against the "cheap" offerings from AWS, MS-Azure and Google and have ordered the expensive HEC (Hana Enterprise Cloud) - in the hope that the extra price will also bring more in terms of performance and knowledge.

However, existing customers have understood this in exactly the same way: For prices far above the market, SAP provides the expertise required for such an operation. A misjudgment!

There is now a lack of IT knowledge on both sides: on the part of the users, because cloud computing was planned, and on the part of SAP, because it was too late to start building up resources.

HEC projects were terminated and canceled! In a second wave that is currently intensifying, more and more existing SAP customers are now switching to local cloud providers that still have SAP expertise, or to Azure, because Microsoft has been active in the SAP business for many years, is aware of the ERP complexity and has provided the corresponding knowledge and experience.

SAP, on the other hand, will have to reduce its cloud prices or invest massively in consulting services - not good prospects for a satisfactory cloud return.