No customer left behind, SAP's Klein tells users angered by cloud-only decision
(2023/09/25)
- Reference: 1695653108
- News link: https://www.theregister.co.uk/2023/09/25/no_customer_left_behind_saps/
- Source link:
Facing users angered by SAP's decision to introduce its "newest" innovations only in the cloud, the German software giant's CEO promised not to leave any customers behind in his mission to move them off-prem.
Christian Klein fielded questions from the German-speaking SAP user group DSAG at its 2023 Annual Congress in Bremen last week.
It follows a meeting in July when he told investment analysts that certain future innovations would only be available in the cloud on its terms, such as the [1]RISE with SAP lift-shift-and-transform program . Crucially, customers who made massive investments in migrating to the latest S/4HANA ERP platform on-prem would not see these newer features in upgrades.
[2]
"It's also very important to emphasize that SAP's newest innovations and capabilities will only be delivered in SAP public cloud and SAP private cloud using RISE with SAP as the enabler," Klein said at the time.
[3]
[4]
Facing down the user group in Bremen must have inspired some trepidation in the high-rising exec, who is still in his 40s. DSAG — which represents users in Germany, Switzerland and Austria — had said SAP's decision to only offer certain innovations in its cloud products, seemingly ignoring the majority of those remaining on-prem, so soon after committing to S/4HANA as the platform for the future for ERP, wherever it is hosted, [5]threatened to break users' trust in the vendor.
"To be very clear about that, we won't leave any customer behind. There may be others that have acted differently [but] SAP will continue to invest in functions and features for our on-premises customers. We will continue to hold more than 200 ERP versions in more than 130 countries. We will localize them and we will maintain them. For that, we will spend several billions of euros to take these customers along," a translation of his speech said.
[6]
However, Klein maintained that so-called "strategic" innovation, such as the introduction of generative AI into enterprise systems, could only be achieved in the cloud.
He argued that SAP could only produce generative AI tools from aggregated customer data in a standardized model, not from different versions of on-premises systems with siloed data.
"Many customers have got these data silos, connecting them to AI models can only be as good as the underlying data quality. SAP won't benefit and our customers won't benefit if we deliver something that has got no chance to reach a high performance," he said.
[7]
Klein also argued that it would be difficult for SAP — which builds the software on which some of the world's largest industrial companies run their business — to achieve the necessary pace of product development if it has to address a wide on-prem portfolio lacking standardization.
"SAP will only withstand the competition, if we no longer have customers on more than 200 ERP versions. It is our task, our duty to take [customers] along on this journey," he said.
Lastly though, there was a nod to how investors see the situation, which is arguably where the current trajectory began.
[8]SAP user group calls for support deadline reprieve amid hospital billing worries
[9]Gartner says hold onto your wallets as SAP's cloud pitch trades control for convenience
[10]S/4HANA was once the future for SAP – but now it's in the clouds
[11]Users slam SAP's public cloud and S/4HANA migration strategy
In October 2020, the company reset its earnings guidance — [12]causing a 23 percent share price crash — as it assured markets it was [13]going to use the time to become more like the high-growth SaaS companies they love.
Last week, Klein told German-speaking users: "I want to be very clear about one thing: as a CEO, I've got a responsibility that you in the future can act in a highly competitive way. And I also have the responsibility of giving a future to SAP. The future is in the cloud." ®
Get our [14]Tech Resources
[1] https://www.theregister.com/2021/01/29/rise_with_sap_presentation/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZRGuohMnL-Phmln0bZXqJQAAAMk&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZRGuohMnL-Phmln0bZXqJQAAAMk&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZRGuohMnL-Phmln0bZXqJQAAAMk&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://www.theregister.com/2023/08/03/sap_ceo_push_for_cloudonly/
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZRGuohMnL-Phmln0bZXqJQAAAMk&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZRGuohMnL-Phmln0bZXqJQAAAMk&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2023/09/06/sap_users_group_support_deadline_reprieve/
[9] https://www.theregister.com/2023/09/01/gartner_rise_with_sap/
[10] https://www.theregister.com/2023/08/08/s4hana_sap_cloud/
[11] https://www.theregister.com/2023/04/05/sap_s4_hana_cloud_strategy/
[12] https://www.theregister.com/2020/10/26/sap_covid_crash/
[13] https://www.theregister.com/2020/10/28/sap_new_strategy/
[14] https://whitepapers.theregister.com/
Christian Klein fielded questions from the German-speaking SAP user group DSAG at its 2023 Annual Congress in Bremen last week.
It follows a meeting in July when he told investment analysts that certain future innovations would only be available in the cloud on its terms, such as the [1]RISE with SAP lift-shift-and-transform program . Crucially, customers who made massive investments in migrating to the latest S/4HANA ERP platform on-prem would not see these newer features in upgrades.
[2]
"It's also very important to emphasize that SAP's newest innovations and capabilities will only be delivered in SAP public cloud and SAP private cloud using RISE with SAP as the enabler," Klein said at the time.
[3]
[4]
Facing down the user group in Bremen must have inspired some trepidation in the high-rising exec, who is still in his 40s. DSAG — which represents users in Germany, Switzerland and Austria — had said SAP's decision to only offer certain innovations in its cloud products, seemingly ignoring the majority of those remaining on-prem, so soon after committing to S/4HANA as the platform for the future for ERP, wherever it is hosted, [5]threatened to break users' trust in the vendor.
"To be very clear about that, we won't leave any customer behind. There may be others that have acted differently [but] SAP will continue to invest in functions and features for our on-premises customers. We will continue to hold more than 200 ERP versions in more than 130 countries. We will localize them and we will maintain them. For that, we will spend several billions of euros to take these customers along," a translation of his speech said.
[6]
However, Klein maintained that so-called "strategic" innovation, such as the introduction of generative AI into enterprise systems, could only be achieved in the cloud.
He argued that SAP could only produce generative AI tools from aggregated customer data in a standardized model, not from different versions of on-premises systems with siloed data.
"Many customers have got these data silos, connecting them to AI models can only be as good as the underlying data quality. SAP won't benefit and our customers won't benefit if we deliver something that has got no chance to reach a high performance," he said.
[7]
Klein also argued that it would be difficult for SAP — which builds the software on which some of the world's largest industrial companies run their business — to achieve the necessary pace of product development if it has to address a wide on-prem portfolio lacking standardization.
"SAP will only withstand the competition, if we no longer have customers on more than 200 ERP versions. It is our task, our duty to take [customers] along on this journey," he said.
Lastly though, there was a nod to how investors see the situation, which is arguably where the current trajectory began.
[8]SAP user group calls for support deadline reprieve amid hospital billing worries
[9]Gartner says hold onto your wallets as SAP's cloud pitch trades control for convenience
[10]S/4HANA was once the future for SAP – but now it's in the clouds
[11]Users slam SAP's public cloud and S/4HANA migration strategy
In October 2020, the company reset its earnings guidance — [12]causing a 23 percent share price crash — as it assured markets it was [13]going to use the time to become more like the high-growth SaaS companies they love.
Last week, Klein told German-speaking users: "I want to be very clear about one thing: as a CEO, I've got a responsibility that you in the future can act in a highly competitive way. And I also have the responsibility of giving a future to SAP. The future is in the cloud." ®
Get our [14]Tech Resources
[1] https://www.theregister.com/2021/01/29/rise_with_sap_presentation/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZRGuohMnL-Phmln0bZXqJQAAAMk&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZRGuohMnL-Phmln0bZXqJQAAAMk&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZRGuohMnL-Phmln0bZXqJQAAAMk&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://www.theregister.com/2023/08/03/sap_ceo_push_for_cloudonly/
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZRGuohMnL-Phmln0bZXqJQAAAMk&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZRGuohMnL-Phmln0bZXqJQAAAMk&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2023/09/06/sap_users_group_support_deadline_reprieve/
[9] https://www.theregister.com/2023/09/01/gartner_rise_with_sap/
[10] https://www.theregister.com/2023/08/08/s4hana_sap_cloud/
[11] https://www.theregister.com/2023/04/05/sap_s4_hana_cloud_strategy/
[12] https://www.theregister.com/2020/10/26/sap_covid_crash/
[13] https://www.theregister.com/2020/10/28/sap_new_strategy/
[14] https://whitepapers.theregister.com/
Doctor Syntax
Have I got this right?:
1. We're not going to leave you behind
2. We're going to leave you behind
3. If we leave you behind at least we're not going to slurp your data to feed the AI
4. If we don't leave you behind we're going to slurp your data to feed the AI
He won't leave customers behind...
msknight
...they'll leave.
If you are a SAP customer, you are already doomed in any case
Anonymous Coward
Not only do you get locked in (breaking up is hard to do), but you also get the benefit of some of the strictest licensing terms available (look up SAP v Diageo to learn about the concept of indirect software licensing).
So, little unimportant things like where your data is stored, service performance and security will always come second to feeding the beast through license fees.
Disclaimer - this is my personal opinion and I have no financial or other interest in SAP or any of its competitors.
AC, because...
Idea
elsergiovolador
Hey Jake, you there?
Martin! What's up?
Do you remember that software we sold you, that powers your business?
Yes, how could I not! It's brill!
Right, so we think that you should run it on our computer.
Why?
For your own good. We will make sure it is secure and runs well and charge you a monthly fee for the pleasure.
But it has been running just fine!
Well, about that. It would be a shame if it suddenly stopped (wink wink) or someone hacked it (triple wink).
If you put it that way, where do I sign up!? Oh and how much?
Give us all your data and we will tell you how much you can afford.
That's so brilliant, Martin! I always wanted you to f*ck me really hard.
Seems Somewhat Reasonable
So, whatever AI bullshit SAP is trying to peddle won't necessarily be as robust for on-prem users. I doubt that'll be any great loss, and some may see it as a feature because it means none of their data will be slurped up into this AI model, meaning no chance of it accidentally being leaked. It is at least possible that on-prem users could use their own data to train the AI. It may not be as "effective" given the smaller dataset, but it could be done.