SAP Sitting Suite in the Cloud

sw_cloud_cityAny doubts about SAP’s commitment to the cloud were laid to rest last week with SAP’s announcement that it will soon offer subscription models for SAP Business Suite via the SAP HANA Enterprise Cloud service.

This latest development extends a streak of major cloud-related announcements. SAP’s acquisitions of SuccessFactors, Ariba, Hybris and, most recently, Fieldglass are vital to the company’s cloud offerings, and these acquisitions complement the progress of SAP’s organic cloud strategy underway for many years now.

In fact, despite the cloud’s impressive growth numbers, IDC reports “two out of three enterprise cloud users have yet to decide how to formalize a strategy for cloud.”

As a consequence, many core enterprise systems today — think of the ERP boom in the ’90 — are flirting with overdue replacement cycles and/or upgrades, extensive and expensive customizations, rising maintenance costs and, most critically, a lack of flexibility needed to meet today’s changing business demands.

Read article by Optimal President Sam Sliman: SAP Sitting Suite in the Cloud

SAP Execs on the Company’s Cloud Strategy

In combination with solid core performance, SAP’s fast-growing cloud business in 2013 played a key role in the company racking up its fourth consecutive year of double-digit growth.

In 2013, SAP’s cloud subscription and support backlog increased 50% to approximately $1.6 billion, and deferred cloud subscription and support revenue increased 25% to approximately $600 million.

SAP booked over $1 billion in sales from cloud subscriptions and support in 2013, exceeding its full-year guidance and more than doubling total cloud revenue from 2012.

Based on the fourth-quarter total, SAP said the 12-month run rate for its cloud business now stands at $1.4 billion.

During SAP’s recent earnings call, Co-CEOs Bill McDermott and Jim Hagemann Snabe underscored why SAP’s cloud growth is a crowning achievement: “We are one of the few global tech companies that has successfully managed the transition to the cloud while growing our core business and improving our profitability at the same time.”

SAP future cloud goals are both clear and aggressive. For 2014, SAP targets $1.2 – $1.35 billion in cloud revenue. By 2017, SAP expects to earn $4.7 billion from the cloud.

Gartner forecasts the worldwide cloud market to grow 18.5 percent this year to $131 billion, and SAP is determined to capture a sizable share.

To help SAP consultants and customers get a handle on SAP’s cloud aspirations, we’ve pulled together a roundup of articles containing some interesting cloud quotes from SAP execs.

SAP Going After Salesforce, Workday “with everything we have” Says CEO McDermott

SAP’s Master Plan: A Look at the Challenges Ahead

SAP Calls for Partners’ Help to Achieve High Double-digit HANA Growth

SAP Execs Predict More Innovation as Economic Outlook Improves in 2014

SAP Finance Chief Says SAP Could Look at Big Acquisitions Again

SAP CEO Envisions Younger, Greener, Cloudier Company

SAP Confirms 20 Customers Live on HANA Cloud, Hundreds in the Pipeline

SAP Sees Payoff In Cloud, Hana Bets

SAP’s Shift to Cloud May Just be Paying Off

MCaaS, More Than Just a Cloud Option

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The transition of corporate IT to the cloud is well underway for most organizations and progressing at a pace that is most likely faster than expected, as it has become common practice for business leaders to sidestep IT and procure non-mission-critical cloud services that address specific needs – web service tools, email/collaboration tools, app development/testing environments, etc.

In the beginning, this practice wasn’t terribly problematic. But times have changed. Cloud solutions have significantly evolved; cloud architectures have increased in variety and complexity; integration across an IT landscape is paramount; and businesses are now tapping the cloud with greater frequency to handle heavier workloads and drive core processes. While cost savings and the OPEX versus CAPEX aspect of MCaaS are certainly appealing, the decision to implement a cloud-based solution increasingly hinges on the question of business value – both near and long term.

At Optimal, we’re excited to add MCaaS to our portfolio of SAP solutions, and we remain committed to leveraging the full force of our 18+ years of industry experience, deep SAP expertise, and sustained investment in SAP offerings to ensure that our customers’ entire SAP journey — in the cloud and on-premise — aligns perfectly with their unique business needs and objectives.

Read article by Optimal President Sam Sliman: MCaaS, More Than Just a Cloud Option

Hybrid Cloud Model Gathers Steam

sw_cloud_city

A spate of recent reports confirms what we all inherently know — cloud computing has entered the mainstream and is prevalent among enterprises today.

According to CDW’s 2013 State of the Cloud Report, more than half of organizations are moving or plan to move specific apps or infrastructure to the cloud. The Everest Group concurs, reporting that 57 percent of enterprises are using Software as a Service (SaaS) applications and 38 percent of organizations have adopted Platform as a Service (PaaS) solutions.

GigaOM Research expects the total worldwide addressable market for cloud computing to reach $158.8 billion by 2014, an increase of 126.5 percent from 2011, and Forrester predicts 22 percent annual growth in cloud computing through 2020, when it will top $240 billion.

SAP intends to dominate the cloud by providing the most comprehensive cloud-computing portfolio on the market and the best services and solutions to help guide customers through their cloud journey – from planning to implementing to optimizing and maintaining. The company’s cloud revenue totaled $454 million in 2012 and is forecast to more than double in 2013. Looking ahead, SAP targets $2.6 billion in cloud revenue by 2015.

On a July 21 analyst call, SAP Co-CEO Bill McDermott confidently proclaimed that SAP “will have the highest-performing cloud in the world.” It is clear that SAP has a strategy in place to achieve this goal.

Read article by Optimal President Sam Sliman: Hybrid Cloud Model Gathers Steam

Poll: Got SAP Cloud Concerns?

According to CDW’s 2013 State of the Cloud Report, more than half of organizations are moving or plan to move specific apps or infrastructure to the cloud. The Everest Group concurs, reporting that 57 percent of enterprises are using Software as a Service (SaaS) applications and 38 percent of organizations have adopted Platform as a Service (PaaS) solutions.

In fact, most industry pundits are bullish on the cloud. Gartner cites cloud computing as one of the biggest developments impacting the IT world over the next five years, and Forrester predicts 22 percent annual growth in cloud computing through 2020.

SAP is well ahead of its peers in providing non-disruptive, enterprise-class cloud solutions in the areas that matter most — from SuccessFactors to Ariba to SAP BusinessObjects BI OnDemand, SAP Financials OnDemand, SAP Sales OnDemand, and SAP Services OnDemand, among many others.

Understanding that the future is in open clouds, not proprietary hardware, the SAP HANA Enterprise Cloud and the SAP HANA Cloud Platform bring massive scale for mission-critical applications and serve as a unified foundation for the full portfolio of integrated SAP cloud solutions.

With a pragmatic eye toward hybrid on-premise/on-demand landscapes, SAP puts customers in the driver’s seat for their cloud journey by offering a simple, flexible model for extending current on-premise solutions to cloud applications.

SAP’s cloud revenue totaled $454 million in 2012 and is forecast to more than double in 2013. SAP forecasts $2.6 billion in cloud revenue by 2015.

There’s no stopping cloud migration, that’s for certain, but there are a few concerns that are forcing many to proceed with caution as they embrace the cloud.

Wherever you are in your cloud journey, take the Optimal SAP Cloud poll. Share your top cloud concerns and learn from your peers what gives them pause as they move forward with their cloud plans.

Optimal Labs Officially Opens for Business

optimal labs 5The pace of change in business today is equaled only by the blistering speed of technological innovation, and no major technology vendor has flexed its innovation chops more over the past several years than SAP. From HANA to mobility to the cloud and beyond, SAP is transforming the way businesses run by providing solutions that drive innovation at an unprecedented scale.

It is against this backdrop of critical questions and boundless opportunity that Optimal is proud to officially open Optimal Labs — a state of the art facility featuring a wide array of integrated SAP industry, line of business, analytical, and technical products where SAP customers can experience live demonstrations of the very latest SAP solutions, build business cases for investing in SAP, test enhancements to their existing SAP landscapes, and learn first hand how mobility, enterprise performance management (EPM), enterprise information management (EIM), the cloud, analytics and the power of SAP HANA can drive process improvements, efficiency gains, competitiveness and profits.

Optimal Labs features more than 50 instances of SAP and equipment contributed by Optimal, SAP, Cisco, EMC and Motorola. Our goal is to provide a tightly integrated environment where our customers can simultaneously evaluate all components of their IT landscapes. At bottom, Optimal Labs is a highly collaborative effort orchestrated by a broad array of partners to ensure the success of our mutual SAP customers.

Read article by Optimal President Sam Sliman: Optimal Labs Officially Opens for Business

CFOs to Flock to BPC in the Cloud

CFO bpc cloud

Corporate performance management (CPM), also known as business performance management (BPM), or enterprise performance management (EPM), helps companies use the insight gleaned from BI and other systems to align strategy and execution, which ultimately improves efficiency and the bottom line.

SAP Business Planning and Consolidation (SAP BPC), the centerpiece of SAP’s EPM portfolio, combines the most common EPM needs of the office of finance. With a customer base of more than 6,500 (and growing rapidly), BPC’s market success can be attributed to several factors: It supports Microsoft Office tools (eliminating tedious, error-prone, manual Excel-driven planning and consolidations processes); easily integrates with SAP and non-SAP environments; and enables accelerated planning, consolidated financial reporting and advanced forecasting capabilities – all in a single application.

Upping their game, SAP announced BPC (NetWeaver Edition) powered by SAP HANA in 2012, empowering organizations to easily tackle today’s big-data deluge. And, never resting on their innovation laurels, with the help of select partners such as Optimal, SAP BPC is now available in the cloud – an offering sure to resonate well with today’s CFOs.

An Aberdeen study conducted in 2012 found that best-in-class organizations are 2.5 times as likely than all other organizations to be using cloud financial management solutions. Top reasons for doing so are lowering the cost of optimizing infrastructure, efficient collaboration across geographies and the ability to respond quickly to business demands, according to Aberdeen.

In the pursuit of maintaining a lean balance sheet with optimum cash flow, CFOs are aggressively exploring opex options — such as paying a monthly fee for cloud delivery of SAP BPC. Shifting capital expenses to operating expenses reduces costs, saves money, and makes financial statements look better, which is why Gartner forecasts that, to get around limitations on IT and capital spending, more than 50 percent of enterprises will have some form of SaaS-based application strategy by 2015. BPC in the cloud + HANA = happy CFOs!

Read article by Optimal President Sam Sliman: CFOs to Flock to BPC in the Cloud

Taking SAP BPC to the Cloud

SAP Ariba Network Transformation CloudPlanning, budgeting, forecasting, and consolidating financials across a fast-growing business with numerous offices, multiple business units and diverse, geographically spread operations are, to say the least, challenging tasks. They are also core activities every business must execute in some way, shape or form, and given today’s dynamic business climate and turbulent global economy, the speed, efficiency and accuracy with which a business executes these activities has become increasingly vital to competitiveness, growth and viability.

More than ever before, businesses need a proven, easy-to-use tool for streamlining financial reporting and forecasting processes — one that delivers rapid ROI and measurable business value, and SAP BPC, the centerpiece of SAP’s EPM portfolio, is the best tool for the job. 

Available in versions for both the Microsoft and SAP NetWeaver platforms, SAP BPC combines planning, budgeting, and forecasting capabilities with management and legal consolidation functionality in a single application, providing business users with the intuitive, role-based tools, structured processes and centralized data they need to integrate corporate and departmental planning, shorten budget cycle time, close the books faster and ensure compliance with regulatory and financial standards. 

SAP is recognized as a leader in the EPM market by industry analyst organizations such as Gartner, IDC, Forrester and Ventana Research, among others, and as SAP and its partners bring more core EPM solutions such as SAP BPC to the cloud, the company’s status as an EPM market leader is sure to grow even stronger.

Read article by Optimal Vice-President Dmitry Faybysh: Taking SAP BPC to Cloud

Innovation Engines to Roar at SAPPHIRE

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The first quarter of 2013 was SAP’s 13th consecutive quarter of double-digit growth for non-IFRS software and software-related revenue. What makes this financial performance particularly noteworthy are the three innovation engines that buoyed sales during what is typically SAP’s smallest quarter — namely, the cloud, HANA and mobility.

SAP notched near quadruple, triple and double-digit year-over-year growth, respectively, in these three solution areas — proof-positive that the company’s focus on the rapid delivery of innovative solutions is paying off.

An increasing number of organizations are embracing a cloud-first application strategy, and SAP is well ahead of its peers in providing enterprise-class cloud solutions. SAP posted a 385 percent year-over-year increase in cloud subscription and support sales and a 95 percent jump in deferred revenue from cloud subscriptions and support. The cloud business contributed approximately $36.72 million to SAP’s first-quarter earnings.

Equally impressive is HANA’s traction to date — over $800 million in revenues, ~1000 customers, 310 HANA-focused startup companies, and more than 30 ‘powered by HANA’ apps. In addition, SAP BusinessObjects, SAP Business Warehouse, SAP Business One, and the SAP Business Suite are all now powered by HANA and the just-announced SAP HANA Enterprise Cloud is sure to accelerate HANA adoption.

SAP also recently announced the SAP Mobile Platform on HANA cloud, making it simple to create, configure, distribute and manage mobile applications without having to install and maintain a platform server on premise. SAP will leverage SAPPHIRE to build on its strong mobility offering — and on its double-digit year-over-year revenue growth in mobility for Q1.

Read article by Optimal President Sam Sliman: Innovation Engines to Roar at SAPPHIRE

Cloud Drives SAP’s Q1 Growth

SAP CloudThe first quarter of 2013 was SAP’s 13th consecutive quarter of double-digit growth for non-IFRS software and software-related revenue.

SAP performed better than all competitors in large part due to a significant uptick in its cloud business – which unlike most of the large software vendors, SAP breaks out separately in its financial reporting.

In Q1 SAP posted a whopping 385 percent year-over-year increase in cloud subscription and support sales and a 95 percent jump in deferred revenue from cloud subscriptions and support. The cloud business contributed approximately $36.72 million to SAP’s first-quarter earnings. SAP states that the company is on track to top $1 billion in cloud revenue this year and projects new-software and cloud-subscription sales growth of 11 to 13 percent in 2013, for a revenue contribution of 14 to 20 percent.

Along with reaffirming the company’s full-year financial guidance, SAP expressed confidence in its ability to achieve its goal of $2.5 billion in cloud revenue by 2015.

Industry pundits are equally bullish on the cloud, with Gartner citing cloud computing as one of the big developments that will have a major impact on the IT world over the next five years and Forrester predicting 22 percent annual growth in cloud computing through 2020.

Here’s a roundup of news articles on SAP’s Q1 financial reporting:

Radical Transformation in IT Buoys SAP’s Q1 Results

SAP Co-CEO: “Cloud computing business profitable”

SAP Defies Industry Trend with Sales, Profit Growth

SAP Confirms Forecasts After ‘solid’ First Quarter

Q1 Earnings, Revenue Up for Software Giant

SAP’s Aggressive Cloud Play

SAP Cloud

SAP plans to double cloud revenue in 2012, reach $2 billion in category revenue by 2015, and grow its cloud market share thirty-fold over the next five years.

Numbers to date confirm that SAP is delivering.

Read article by Optimal President Sam Sliman: SAP Flying High in the Cloud

Cloud Predictions

Cloud

The migration to the cloud will undoubtedly pick up steam in 2012 and beyond as a growing number of enterprises look to benefit from the lower cost, easily scalable and maintenance free world of cloud computing.

As the ‘everything-as-a-service’ trend continues, SAP aims to be a cloud leader, doubling its cloud computing market share this year, reaching $2 billion in category revenue by 2015, and growing it’s cloud market share thirty-fold over the next five years.

Here’s a rundown of some of the latest pundit predictions on how big and how fast the cloud will grow in the years ahead:

  • The cloud market will surpass $17 billion in 2012 (CMI Research)
  • Cloud services spending will exceed $23 billion in 2012, with 30% growth over 2011 (IDC)
  • More than 80% of applications developed in 2012 will be cloud-based (IDC)
  • CRM will be the largest SaaS market in 2012 (IDC)
  • Cloud systems management will grow 62% in 2012 (IDC)
  • Cloud-related companies will pump $20 billion annually into the economy, roughly translating to 472,000 new jobs over the next five years. (SAND Hill Group)
  • More than half of Global 1000 companies will have stored customer-sensitive data in the cloud by 2016 (Gartner)
  • More than 20% of organizations have already begun to store this data in hybrid clouds (Gartner)
  • 80% of cloud services will include a global energy surcharge by 2015 (Gartner)
  • Revenues in Amazon Web Services will exceed $1 billion in 2012 (IDC)
  • According to a recent survey, 43% of IT leaders have cloud computing initiatives planned for 2012, a 12% increase over 2011 (Inavero Institute)
  • The Retail (47%), Manufacturing (46%), Education (43%) and Government (41%) sectors had the highest percentage of survey respondents that have plans to implement cloud solutions in 2012 (Inavero Institute)
  • 40% of IT leaders are actively researching the next phase in public cloud computing services and initiatives (CIO Magazine Tech Poll results for January 2012)
  • Cloud business intelligence usage is expected to jump in the next one year as 47% of SMBs plan to shift to cloud from spreadsheets, a jump of 59% from 2011 (Techaisle)
  • Sales of cloud-based SaaS applications will hit $17.3 billion in 2013, up 41% from an estimated $12.3 billion in 2011 (Gartner)
  • About a third of cloud applications sales in 2011 were from CRM applications (Gartner)
  • By 2016, 40% of enterprises will make proof of independent security testing a precondition for using any type of cloud service (Gartner)
  • Public cloud computing services will fuel the IT industry for the next 25 years with growth forecast at 27.6%per year, becoming a $72.9 billion market by 2015. (IDC)
  • Public cloud computing will account for 46% of all new growth in IT spending, most notably in applications, app development and deployment, infrastructure, storage and servers. Of this growth, the U.S. will represent 50% of all public cloud services spending in 2015. (IDC)
  • The global public cloud market is growing from $25.5B in 2011 to $159.3B in 2020 (Forrester)
  • The cloud computing market will grow from $40.7 billion in 2011 to more than $241 billion in 2020 (Forrester)

HANA Taking Hold Fast

SAP HANA

SAP Co-CEO Jim Hagemann Snabe bills HANA as “probably the biggest innovation in the business software industry in the last 20 years.” Judging by HANA’s rapid progress, he very well may be right.

Since its intro in 2010, HANA has closed the hype-to-here loop much quicker than what is typically seen in SAP’s traditional product development cycle.

Read article by Optimal Solutions President Sam Sliman: HANA Taking Hold Fast

 

SAP HANA for All

SAP HANA

SAP has named HANA the fastest-growing product in the company’s 40-year history. HANA sales topped $209 million in 2011 and SAP execs predict HANA sales will double in 2012.

SAP’s In-memory Computing Catches On

Because cloud offerings require companies to rapidly process large volumes of data (and server sprawl is costly no matter where the physical servers reside), HANA’s impact on the cloud will be huge. According to Jim Hagemann Snabe, SAP’s goal is to become a $2 billion player in cloud computing by 2015.

SAP Has Broader Vision for the Cloud

SAP HANA – The Cloud’s Silver Lining?

Leveraging in-memory technology to crunch big data at record speed, HANA will lift SAP analytics and BI to new heights and will extend analytics and BI to an unprecedented number of employees via mobile devices.

Analyze This – The SAP Way

SAP’s Bold Bet: Rule Cloud, Mobile, Big Data

SAP intends to have HANA support for core Business Suite modules by the end of this year, and just this week, SAP announced plans to offer HANA to SMEs.

SAP Unveils HANA for SMBs

SAP to Offer Hana Analytic Software to Smaller Companies in 2012

SAP Launches HANA Analytics for SMEs

SAP Co-CEO Jim Hagemann Snabe bills HANA as “probably the biggest innovation in the business software industry in the last 20 years.” Judging by HANA’s rapid progress, he very well may be right.

SAP Boom in 2012

SAP Revenue

SAP targets $26 billion in revenue and a 35% operating margin by 2015. The company also targets 1 billion end users by 2015. SAP expects its 2012 revenue from software and software-related services to rise by 10-12 % in the full year from $14.6 billion in 2011.

What’s driving these bold predictions? For starters, HANA revenue in 2012 will more than double to $414.4 million. Mobile app sales in 2012 will more than double to $285 million. With more than 15 million customers and 50 million end users, SuccessFactors gives SAP the largest cloud software solution in the world.

SAP is also betting that the confluence of its in-memory technology, mobility muscle and BI prowess positions the company perfectly to extend an increasing array of analytics and BI solutions to a much wider range of end users.

Today, SAP has about 183,000 customers and around 38 million end-users. If all goes as planned, those numbers are sure to explode in 2012.

Read article by Optimal Solutions President Sam Sliman: SAP Performing Strong, Reaching More People

Here’s a roundup of articles covering SAP’s solid performance and aggressive growth goals:

SAP Reports Bumper Results

SAP Bullish on 2012

SAP Forecasts Higher Profit, Sales This Year on Analytics, Mobile Software

SAP Leads, Oracle Lags In Enterprise Apps

SAP Among Top Technology Providers for Food and Beverage Distribution Industry

SAP Reaches BBD Target

SAP’s In-Memory Computing Catches On

Inside SAP’s Skunkworks as It Takes Aim at Oracle

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