SAP’s decision to limit innovations to its cloud models has been accused of breaching customer trust.
One user group believes on-premises and cloud-hosted software users are feeling marginalized by the ERP and CRM software stalwart as they will not have access to certain releases, including AI in S/4HANA, RISE with SAP, and GROW with SAP. They will continue to receive other updates, however.
This comes on top of a first wave of resistance by the German-speaking user group DSAG in August this year when SAP released a statement saying that its AI and sustainability capabilities would only be accessible via the S/4HANA public cloud.
The Chairman of the UK and Ireland User Group (UKISUG), Paul Cooper, expressed the discontent of affected customers:
On-prem and hosted customers are unhappy, to put it mildly, with the statement from [CEO] Christian Klein stating that SAP will only be releasing new innovations in the cloud.
A UKISUG survey revealed that 79 percent of users with an on-prem or hosted deployment have switched to S74HANA, and 70 percent of users planning to take up S/4HANA also want an on-prem or hosted version.
The DSAG and UKISUG are both concerned that SAP is breaking its 2020 commitment to give customers a choice between cloud and on-prem deployments.
Indeed, SAP’s CEO, Christian Klein, assured its German-speaking users in September that he would “spend billions of euros to take these [on-prem] customers along [with them].”
Yet, Cooper spoke out against SAP’s apparent flouting of such promises at a conference in Birmingham: “Mr. Saueressig [an executive SAP board member] didn’t once say that cloud deployments came with full innovation, while other flavors of S/4HANA didn’t. We were also told that S/4HANA would be supported until 2040.
“There were no caveats that major innovation would only be delivered to public and private cloud customers using RISE or GROW.
Why did SAP not tell us that new innovation was only going to be available to cloud customers? Did they not think it was important in our decision-making process? These are the questions our members are asking.
Klein argues, however, that innovations like adding generative AI to enterprise systems are not possible in on-premises setups.
In October, SAP embedded generative AI across its customer experience suite with new capabilities for service, sales, marketing, and commerce teams. It also recently launched the generative AI copilot “Joule” to provide contextualized insights across all SAP solutions and third-party sources.
SAP also provided a response to The Register: “Our partnership with each of our customers is built on trust, as many of them have made significant investments with us for decades.
“Therefore, we do not intend to discontinue our promise to serve on-premise customers that are either implementing, running, and building their future with SAP S/4HANA on-premise. SAP S/4HANA maintenance will continue to 2040.
“That means SAP will deliver continuous improvements, extensions, and innovations to these valued customers, inclusive of all required legal changes, as part of our maintenance commitment.
“Innovation roadmaps for SAP S/4HANA continue to be updated and published on sap.com.”
If these user groups are right, it would appear SAP’s approach stands in stark contrast to more flexible strategies, such as Verint’s “automate without disruption” campaign.
If striking a balance between cloud and on-prem investments is required, it will evidently need to tread carefully.