SAP Shifts Into The Cloud To Reverberate Across Channel

Very few applications have generated more profits and revenues for solution providers than the portfolio of offerings created by SAP. But with the launch today of SAP Business Suite 4 for HANA (SAP S/4HANA) in the cloud, solution providers might want to take stock of how the application delivery and customization is rapidly evolving around them. Instead of always having to deploy highly customized versions of its software running on premise, SAP envisions moving large portions of its customer base to upgrade to a cloud application hosted by SAP.

Naturally, for a whole range of security and compliance concerns there will still be instances of SAP S/4HANA that run on premise. But even then, the technical resources required to install it will be a whole lot less than they are today, especially in those cases where the on premise installation is essentially a managed service provided by SAP.

Technical integration services don’t add much business value from a customer’s perspective, so SAP is moving to simplify its entire stack of applications in the hopes that such an effort will dramatically increase the number of users of its software. The challenge that creates for solution providers across the channel is that in terms of adding value they will need to focus more on business processes.

In fact, Mark Willford, senior managing director of technology ecosystem and offerings at Accenture, said that with the rise of software-as-a-service (SaaS) Accenture has already seen a drop in the amount of technical services revenues it generates. The upside is that as business processes become more complex it is more than making up for that loss or revenue with additional opportunities to provide business consulting services.

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To make it easier for more partners to participate in the opportunity Dr. Wieland Schreiner, executive vice president for S/4HANA and Suite on HANA, said SAP has been working steadily to make sure that the application programming interfaces (APIs) surrounding HANA are both stable and accessible to developers building applications using the SAP Fiori or some other application development framework. It’s clear that SAP wants as many customers in the cloud as soon as possible to lower the company’s support costs. SAP S/4HANA will also be available with managed cloud deployment options — today managed by SAP. On-premise deployments of SAP S/4HANA can be hosted by SAP partners

Implementing and configuring SAP applications and the infrastructure they run on has generated billions of dollars in profits for the channel over the last three decades. As demand for those services drops there’s no doubt that solution providers are going to be confronted with the immediate need to transform their business models.

The degree to which they proactively respond to that challenge will more than likely determine not only which ones survive in this new age of enterprise application in the cloud, but also actually thrive.