Bill McDermott has his head in the clouds. While talking left and right about Cloud First and Cloud Only, he is ignoring a better approach. [shutterstock: 536001130, frankie's]
Reasonable cloud concepts do exist. And it doesn’t matter where you get your appetite, as long as you eat at home.
Everyone knows those movies containing a scene that goes something like this: Half-naked women dance on poles in a gloomy pub, and a shady bouncer tells customers, “Just looking, no touching“.
As the best of all wives reads through this manuscript, she raises her eyebrows and asks suspiciously, “Where do you watch those movies?“ I blush, but try to look as languid as possible as I answer, “They always show them on my flights to Asia.“
My answer is, of course, not to be taken at face value about what movies Lufthansa offers customers in the business class. On top of that, it is also not very convincing – just like the statements “America First“ and “Cloud Only“ from Donald Trump and Bill McDermott in the U.S.
In fact, I have just returned from Atlanta, where we had a global CIO meeting with focus on cloud computing. I had the newest edition of German user group DSAG’s magazine with me. On the cover, there was a strong message for SAP: “Cloud only means a crisis for ERP!”
War declaration or justified concern?
This might feel similar to a declaration of war for many SAP executives, because Bill McDermott is not the only one to talk non-stop about Cloud only. CFO Luka Mucic is doing his best to make cloud computing look good on his balance sheet, and CTO Bernd Leukert apparently only knows the SAP Cloud Platform (SCP) by now. What happened to HEC and HCP?
I was very curious about the reactions of my American colleagues to the statement of DSAG: “Cloud only means a crisis for ERP”. To my surprise, a lot of them agreed with DSAG, even though it was not in the way that I had expected. Not only in North America and Canada, but also ever more often in South America, IT users are convinced by the business, organizational and technological benefits of cloud computing.
After the first wave of enthusiasm, however, users start to look at the economical aspects. It is here that I have noticed an ever-growing number of customers turning away from SAP and to more cost-efficient solutions from AWS and Azure.
Many of our subsidiaries in North America have been building up SAP know-how or are starting to do so – insourcing! What they need now is a very cost-efficient, very scalable cloud platform. SAP Cloud Platform is neither!
Turning away from SAP Cloud
SAP is charging way more than other cloud providers, but is unable to offer quality consulting. The result? Many customers turn away from SAP Cloud and consult with SAP partners to install a system based on AWS or Azure.
I have also been noticing this cloud trend in Europe – albeit there is a small difference. While North Americans are more prone to generalize, Europeans make a noticeable distinction between the various SAP applications.
In Europe, the SAP core system, especially accounting and controlling (for my generation: R/3 FI, AM and CO), typically remains in the data center of customers or of outsourcers. Users transfer analytics, Machine Learning, SCM, e-Commerce and so on into the cloud – either with internal know-how or with SAP partners.
Hybrid cloud computing is the way to go
SAP backed the wrong horse! For a year now, I have been hearing the buzzword multi-cloud, while the real technological advance has always been hybrid cloud computing. The reasonable combination of on-premise and on-demand solutions is the answer to “Cloud only means a crisis for ERP“.
However, for the hybrid cloud concept to work, Bill McDermott would have to stop his meaningless talks about “Cloud Only“ and “Cloud First“, and Bernd Leukert would have to restructure his whole technical team. One half of his employees would further develop ERP/ECC 6.0 with Abap (because even the core of S/4 contains Abap – I wonder if McDermott even knows this?). The other half would evaluate innovations in the cloud (cue Leonardo).
If CTO Leukert is up to the challenge, I have a little bonus task for him: Make the Hana Cloud Platform part of the SAP universe again – but this time without Indirect Access.