In recent weeks, SAP has intro­duced a series of impor­tant announce­ments regard­ing pric­ing and strat­e­gy for future inno­va­tions. We first heard about some of these updates dur­ing this year’s SAP Sap­phire and ASUG Annu­al Con­fer­ence, and oth­ers were dis­cussed in part late last month, dur­ing SAP’s Q2 earn­ings call with invest­ment analysts. 

We have since received ques­tions from ASUG Mem­bers, ana­lysts, and jour­nal­ists, and seen sev­er­al arti­cles pub­lished in response to these announce­ments. Our mem­bers make up the world’s largest net­work of SAP cus­tomers, and as your trust­ed com­mu­ni­ty, it is our respon­si­bil­i­ty to seek fur­ther clar­i­fi­ca­tion on these announce­ments on your behalf and pro­vide our guid­ance once we ful­ly under­stand the intent and poten­tial impact of these updates for our members. 

We will con­tin­ue to keep you updat­ed as our under­stand­ing evolves through con­ver­sa­tions with SAP, fel­low com­mu­ni­ty mem­bers, and var­i­ous part­ners that are cur­rent­ly under­way. At this time, here is what we can share:

Insights into SAP Cloud Solu­tions and Strategy

SAP Cloud Strategy 

• SAP’s direc­tion is the Cloud, offer­ing SAP cloud solu­tions as a part of its busi­ness trans­for­ma­tion as a ser­vice (BTaaS) and SaaS solu­tions, and its intent is for all cus­tomers to come on this jour­ney as well. This is not news, but we under­stand the impor­tance of con­tin­u­ing to dis­cuss new devel­op­ments in this strat­e­gy with mem­bers of our cus­tomer com­mu­ni­ty who have yet to upgrade from SAP ERP Cen­tral Com­po­nent (ECC) or cur­rent­ly oper­ate in on-premis­es environments.

• RISE with SAP is SAP’s busi­ness trans­for­ma­tion pro­gram for exist­ing cus­tomers migrat­ing to the Cloud; it offers both pri­vate and pub­lic cloud options for SAP S/4HANA. The pub­lic cloud option, GROW with SAP, is designed to accel­er­ate adop­tion of SAP’s Cloud ERP for net-new cus­tomers and small-to-mid­size com­pa­nies; it is built on SAP S/4HANA Cloud, pub­lic edition.

• SAP is active­ly work­ing to move non-RISE cus­tomers to RISE. SAP plans to deliv­er future new solu­tions, like Green Ledger, to RISE and GROW cus­tomers, and non-RISE or GROW cus­tomers look­ing to adopt future SAP inno­va­tions should under­stand that SAP sees these pro­grams as key enablers for quick­ly deliv­er­ing new inno­va­tions and capa­bil­i­ties. ASUG­’s cur­rent view is this may be a soft line from SAP, giv­en suf­fi­cient cus­tomer demand for spe­cif­ic innovations.
  

• Future arti­fi­cial intel­li­gence (AI) and gen­er­a­tive AI inno­va­tions will be embed­ded with­in ​“pre­mi­um” edi­tions of SAP solu­tions and priced accord­ing­ly. ASUG does not have any fur­ther infor­ma­tion at this stage as to the specifics of these inno­va­tions, and gen­er­a­tive AI is an espe­cial­ly flu­id space at the moment. More infor­ma­tion and dis­cus­sion will be forth­com­ing on this front, but we ulti­mate­ly believe that your deci­sion around adopt­ing these pre­mi­um offer­ings will be based on the busi­ness val­ue you will derive from such SAP SaaS innovations.

Based on SAP’s cloud strat­e­gy, what might these announce­ments mean for our cus­tomer com­mu­ni­ty? Here is one way to break this down:

How SAP Cloud Strat­e­gy Should Impact Your Busi­ness Transformation

Con­sid­er Adopt­ing RISE with SAP

• If you are an SAP ECC cus­tomer, you should be active­ly con­sid­er­ing RISE with SAP, which was launched to enable your migra­tion to (first and fore­most) the pub­lic edi­tion of SAP S/4HANA Cloud, fol­lowed by SAP S/4HANA Cloud, pri­vate edition. 

• If you are an SAP S/4HANA cus­tomer not on RISE, you should under­stand RISE’s role as the future enabler for lever­ag­ing all SAP inno­va­tions. For SAP S/4HANA on-premis­es cus­tomers, SAP will still devel­op inno­va­tions and patch­es, but must deliv­er more recent inno­va­tions, such as those relat­ed to gen­er­a­tive AI, in the cloud, where its ​“clean core” ERP strat­e­gy — keep­ing sys­tems man­age­able, exten­si­ble, and easy to upgrade — will enable main­te­nance, process stan­dard­iza­tion, busi­ness net­work inte­gra­tion, and secu­ri­ty while ensur­ing such inno­va­tions remain rel­e­vant, respon­si­ble, and results-driven.

• If a cus­tomer is con­sid­er­ing a green­field deploy­ment of SAP S/4HANA Cloud as part of the move to RISE, SAP S/4HANA Cloud, pub­lic edi­tion, should be con­sid­ered first due to its low­er total cost of own­er­ship (TCO) and speed of new inno­va­tion deliv­ery. Depend­ing upon fac­tors such as indus­try, busi­ness process require­ments, or reg­u­la­to­ry restric­tions, cus­tomers can alter­nate­ly select SAP S/4HANA Cloud, the pri­vate edition.

• The ease of adopt­ing future inno­va­tions from SAP will be high­ly depen­dent on the lev­el of cus­tomiza­tion in a customer’s tech­nol­o­gy land­scape, and this will espe­cial­ly hold true for those in on-premis­es environments. 

• If you are a brand-new SAP cus­tomer, rather than part of its installed base, we view GROW with SAP as the best entry point into the SAP prod­uct ecosystem.

• It’s impor­tant to sep­a­rate main­te­nance from inno­va­tion. ASUG’s inter­pre­ta­tion is that large inno­va­tions such as Green Ledger (and oth­ers that fol­low) will only be avail­able for cus­tomers on RISE and GROW. Main­te­nance updates and patch­es con­tin­ue for­ward as they always have.

Ulti­mate­ly, all of these announce­ments and your respons­es to them will come down to busi­ness out­comes, val­ue, cost, tim­ing, and nego­ti­a­tions. The price you are will­ing to pay for SAP cloud solu­tions is mea­sured by your abil­i­ty, as a cus­tomer, to real­ize val­ue from them. At ASUG, our objec­tive is to help you get the most val­ue out of your exist­ing SAP invest­ments by reg­u­lar­ly com­mu­ni­cat­ing and con­tin­u­ous­ly clar­i­fy­ing the details of these announce­ments as they emerge. We will con­tin­ue to keep you updat­ed as we learn more in the weeks and months ahead. 

If you have ques­tions or com­ments, we are here to lis­ten and respond for your ben­e­fit. Please get in touch through news@​asug.​com. 

Geoff Scott is CEO and Chief Com­mu­ni­ty Cham­pi­on at ASUG, the world’s largest SAP user group.