Tuesday, 05 May 2015 14:11

85% of SAP licensees uncommitted to new cloud-based S/4HANA

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Global research released at the Sapphire Now 2015 conference shows the new SAP S/4HANA product is a major stumbling block to existing customers.

SAP touts S/4HANA as "the next generation business suite designed to help you run simple in the digital economy." Yet, customers aren't believing the rhetoric.

The research was conducted by Rimini Street to help SAP licensees benefit from peer insights in how other customers and responding the challenges and questions posed by SAP's newly announced S/4HANA product with mandatory re-platforming to HANA.

The research found 85% of respondents are not committed to SAP's new S/4HANA at all.

68% of these cited lack of business case as well as unclear return on investment (ROI).

Rimini Streets research found the new S/4HANA release will require more than 400 million lines of existing SAP code to be re-written, and for the project labour to be on par with a complete re-implementation and migration as if these businesses were installing SAP for the first time.

72% of respondents have made the choice to remain on their existing SAP platform, stating it is stable and mature. Only 3% are presently using HANA today.

The survey found 75% of respondents running SAP ECC 6.0 are not yet using Enhancement Pack 7, still running Enhancement Pack 6 or earlier.

Rimini Street's David Rowe, Senior CVP and Chief Marketing Officer, stated "A clear theme has emerged - survey respondents cited HANA and S/4HANA as unproven, speculative products with little or no compelling business case in return for the cost and risk of implementation."

The logical consequence for business is that SAP's HANA and S/4HANA products are a risky direction which will incur costs, require comprehensive projects, and yet deliver no clear improvements, increased revenue or decreased costs.

This finding is undoubtedly bad news for SAP who previously struggled with making themselves relevant to small and medium enterprises, and who now faces increasing competition in the enterprise ERP space.

In related findings, 46% of SAP licensees also reported that SAP support and maintenance is too expensive for support calls and 37% stated it is too expensive for the functionality delivered.

Rowe stated, "As SAP scrambles to try and show it is a relevant player in the cloud market with its S/4HANA product direction, this survey confirms that SAP licensees plan to continue driving significant value out of their long-running, stable and mature SAP applications that power the mission-critical business operations for tens of thousands of organisations around the world."

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David M Williams

David has been computing since 1984 where he instantly gravitated to the family Commodore 64. He completed a Bachelor of Computer Science degree from 1990 to 1992, commencing full-time employment as a systems analyst at the end of that year. David subsequently worked as a UNIX Systems Manager, Asia-Pacific technical specialist for an international software company, Business Analyst, IT Manager, and other roles. David has been the Chief Information Officer for national public companies since 2007, delivering IT knowledge and business acumen, seeking to transform the industries within which he works. David is also involved in the user group community, the Australian Computer Society technical advisory boards, and education.

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