Transforming into a world market leader in cloud ERP seems nearly impossible for SAP. At the dawn of the cloud era, SAP had to choose between retrofitting R/3 for the cloud or starting out with a completely new technology. For SAP customers, the former would definitely have been easier and more cost-efficient, since they wouldn’t have to bother with a technical migration. However, this strategy wouldn’t have worked with new customers, which would have hit SAP’s software revenue quite hard. So, S/4 was born, and with it came the inherent complexity of the next-gen ERP system. For SAP, S/4 has definitely been beneficial: The idea is to only develop the software once for all platforms and sell S/4 licenses to both new and existing customers.
The biggest improvements that S/4 enables are due to more performant in-memory database Hana and improved hardware. In the areas of user interface, functions and processes, and integration, the success varies.
The hardest part for SAP always seems to be the software interface. Instead of opting for a clear cut, SAP chose a more gradual approach. Many customizations of SAP GUI combine with Fiori in core systems, which can only really be seen as a partial success. Enforcing Fiori has also been a point of contention for some customers.
Functions and processes differ based on the module. Some areas lack innovation, some modules have been developed for hybrid or cloud deployment. Concerning roadmaps, the release dates of cloud and on-prem solutions vary widely.
Integration of all of SAP’s cloud acquisitions continues to be a big topic for customers, since cloud applications can only be successfully operated if full software integration of all core applications can be guaranteed.
One more word on cloud in general: Customers should definitely do their research concerning costs and risks when defining the pros and cons of cloud use. The periodical payments can be more expensive in the long term than buying a license. While cloud providers are definitely enjoying the steady revenue streams stemming from customers’ dependency, the benefits for customers lie in calculable costs and flexibility.