£23 billion of SAP landscape to move to cloud by 2016

£23 billion (US$39 billion) of SAP landscape could move to the cloud in the next two years, as large enterprises plan to migrate 46% of their existing SAP on-premise environment, research shows.

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Some £23 billion (US$39 billion) of SAP landscape could move to the cloud in the next two years, as large enterprises plan to migrate 46 percent of their existing SAP on-premise environment, according to research from HCL Technologies.

The survey of 100 executives from the top tier of SAP enterprises all over the world found that almost half (45 percent) of organisations have upped their SAP cloud investments in the past year and they expect to almost double that in the coming 12 months.

Cost savings was not the main motivator, the survey found. Almost 60 percent were attracted to the agility and speed, 46 percent by the access to new technologies and 42 percent said customer satisfaction was the main pull to the cloud.  

“Cloud is clearly now a reality for the majority of SAP users,” Mark Hirst, head of SAP enterprise application at HCL Technologies told ComputerworldUK.

“The vast majority of people we are talking to want to increase agility and create flexible ways of working. Priority is shifting from budget to technical reasons and organisations want to have something ‘future-proof’.”

The move won’t simply be a case of “lifting and shifting” an entire on-premise estate to the cloud, Hirst said. Most businesses HCL spoke to want to integrate cloud and on-premise for security reasons, which could lead to sprawling infrastructure.

However, this obstacle could be easily managed with myriad solutions, Hirst claimed. Due to demand, Systems integrators, like HCL, will begin to position themselves for assisting migrations and offering security advice to provide a complex integration service.

“Despite these challenges, spend in the cloud is accelerating,” he said.

One major inhibition for enterprises moving to the cloud is that many have already heavily invested in on-premise and legacy systems. SAP’s announcement last year that it would offer a Cloud Extension policy, which enables the partial termination of existing on-premise software licenses and associated maintenance costs, has made moving to the cloud a "more attractive prospect" for nearly three-quarters (74 percent) of organizations, the survey found. However SAP recently refused to divulge how many customers had taken up the offer or confirm its success.

The global survey of 100 large enterprises with revenues in excess of US$1 billion was commissioned by HCL Technologies and conducted by independent research company Vanson Bourne.

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