On prem is alive and thriving! New co-CEO Christian Klein is going against the ‘Cloud First’ vision of his predecessor Bill McDermott. He’s making it a point to highlight the importance of on-prem systems.
Of course, there’s still the partner program Embrace, which was presented during SAP FKOM 2019 in Barcelona, and there’s also the new partnership with Microsoft which is supposed to generate 70 million euros in revenue for SAP. However, both Jennifer Morgan and Christian Klein have reiterated again and again that they are listening to customer wishes and needs, and a lot of them are wishing for on prem!
During the Q3 analyst call, Christian Klein even said himself that some industries have no other choice but to remain in their own datacenters, for example because of latency in manufacturing or logistics.
On prem or public cloud? Hybrid!
Additionally, during our E-3 interview with him, he said, “In industries with highly complex processes that require ERP customizing, like manufacturing and in the automobile industry, it’s not that easy to just implement public cloud solutions. The same goes for companies in countries that are politically unstable, have poor infrastructure, or stricter regulations regarding data protection. That’s why we think there will be a big market for on prem systems. We want to support customers going into the cloud, but a strong integration with the ERP core is still necessary.”
With Christian Klein promoting on prem and hybrid cloud deployments, SAP customers will be delighted to see the hyperfixation on ‘Cloud First’ slowly subside. On prem has been resurrected after so many proclaimed it dead, and it’s mostly thanks to Christian Klein.
If on prem will really take center stage under SAP’s new leadership duo remains to be seen, but chances are good that from now on, there will be a reasonable balance between cloud deployments and on-prem systems. Maybe hybrid cloud will be the new standard – as it always should have been.