SAP Customers Are Overwhelmingly Moving to the Cloud
SAP Customers Are Overwhelmingly Moving to the Cloud
Organizations running SAP are moving to the cloud in droves and need help establishing cohesive cloud environments, research from ASUG and Syntax reveals.
Most SAP customers are new to the cloud. In fact, only about two thirds of cloud users (60%) have been in the cloud less than two years. Less than half of customers (40%) have been in the cloud for three or more years. Almost two thirds of SAP customers currently not in the cloud (62%) have plans to consider using it in the future, with 69% planning to migrate to the cloud within two years.
SAP customers using cloud services for less than for two years are from organizations with $1.5 billion to $5 billion in annual revenue and from the chemicals industry and government. Cloud veterans—organizations that have been using cloud services for three years or more—tend to be from organizations $5 billion or more in annual revenue and are from the retail, public sector, and high-tech industries.
Figure 1: Current and Future Cloud Use
Length of Cloud Use Among SAP Customers
13%
Less than
1 year
47%
1-2
years
31%
3-5
years
9%
More than
5 years
Timelines for Cloud Adoption
16%
Less than
1 year
53%
1-2 years
31%
3-5 years
Source: ASUG and Syntax 2022 research
ASUG and Syntax have teamed every year since 2017 to research the nuances of cloud experiences among SAP customers. During the past five years, we’ve debunked common cloud myths, illuminated cloud complexities, and uncovered the cloud landscape of SAP customers. This year, we noted that investment in cloud services continues to rise year over year with 11% of organizations spending more than $1 million per year on cloud services in 2022. More than half of SAP customers (57%) are spending more than $1 million on their cloud environment.
Almost half of SAP customers (45%) are using hybrid cloud services. About a third (32%) are using private cloud services—an increase of 4% since 2021—and 21% are using public cloud services. SAP customers are moving away from public cloud use and are shifting toward the private cloud, which also was noted in ASUG’s 2022 Pulse of the SAP Customer study. This trend also was mirrored when the number of workloads running on the cloud was examined, with the private cloud expanding from 3.2 workloads to 3.6 in 2022. Most workloads, however, continue to be run on premises.
Seeking Assistance is Key to Building a Cohesive Cloud Environment
Although SAP customers are embracing the cloud, they need help to fully realize the benefits of their migration.
Organizations want to expand their capabilities and innovate in the cloud, particularly when it comes to using analytics and key performance indicators across their business.Opens in a new window. Doing this, however, is a challenge as most organizations lack the in- house knowledge and skills needed to get the most out of their cloud journey.
Share why SAP customers are moving to the cloud.
Multicloud Use Increases
Among SAP Customers
Multicloud Use Increases Among SAP Customers
Organizations are using multiple cloud providers when building their cloud environments and need assistance ensuring there is cohesion among them, research from ASUG and Syntax shows.
More than half of SAP customers use multiple cloud providers. Most SAP customers (41%) use two to three cloud providers. Almost a fifth of organizations, however, are opting for more. The ASUG and Syntax study revealed that 9% of SAP customers use four to six cloud providers; 8% are opting for more than six, which increased 6% from 2021.
The benefits of having a multicloud environment are clear. Organizations reap increased flexibility (41%), cost reduction (41%), and avoid a single vendor lock in (41%). They also fulfill multiple business needs (38%), have the freedom to shop for the best cloud services (38%), and easier scalability (37%). These organizations have a desire to increase visibility of their operation while improving business outcomes and reducing cost. These benefits also meet the expectations desired by organizations embarking on a multicloud journey.
Figure 2: Multicloud Challenges for SAP Customers
Hover to reveal percentages.
Level of Interoperability
15%
Fully
interoperable
66%
Somewhat
interoperable
1%
Not
interoperable
Top Multicloud Problems
54%
Internal skills
shortages
50%
Integrating data
across clouds
38%
Silos between
teams and
managing dierent
environments
Source: ASUG and Syntax 2022 research
Although the shift to multiple cloud environments and providers is meant to harmonize businesses, it has the potential to create discord within organizations. Most SAP customers (67%) lack a fully interoperable multicloud environment. Only 15% stated they have a fully interoperable multicloud environment. To combat this problem, most SAP customers (69%) are relying on internal resources and skillsets. Only a third are turning to their cloud providers or managed service providers for help.
Most organizations have a cloud environment that is somewhat interoperable.
Organizations Need Assistance Managing Multicloud Environments
SAP customers gravely underestimate the lion’s share of personnel challenges they will experience when managing their cloud environments.
More than half (54%) face internal skills shortages and more than a third (37%) lack the internal resources needed to manage their multicloud environment.Opens in a new window. The challenges faced by multicloud users were either on par or more severe than the challenges faced by single cloud users. Other top challenges for multicloud users include integrating data across clouds (50%), silos among teams and managing different environments (38%), and contractual complexities with multiple vendors and cloud providers (31%).
Discover why building a multicloud environment empowers SAP customers.
Innovation is one of the key reasons organizations are moving to the cloud, however, they need guidance as they throttle up their cloud environments, research from ASUG and Syntax reveals.
SAP customers want to maximize their cloud landscape, and innovation is top of mind. Organizations value business analytics (82%), business intelligence (81%), and automation (70%). Things like Internet of Things, AI, and ML are of interest to SAP customers but are of lesser importance.
The responsibility for driving innovation efforts is mixed within SAP organizations. IT leads the way (62%), followed by C-level executives (50%), a team of representatives (49%), and Lines of Business (42%). When it comes to tech purchasing authority, however, responsibility shifted from IT back to C-level individuals (10%) in the 2022 ASUG Pulse of the SAP Customer study. Collaboration among C-level executives, IT, and LoB is essential for organizations to craft cohesive innovation plans while remaining on budget.
Figure 3: Cloud Innovation Barriers by Cloud Management Approach
Managing the cloud alone
Receiving cloud support
Source: ASUG and Syntax 2022 research
The need for collaboration is paramount because staffing shortages (52%), funding issues (48%), and internal knowledge/experience gaps (48%) are the top innovation barriers faced by organizations. These barriers are challenges for all organizations regardless of size. To combat these, some organizations seek external support to establish a cohesive cloud environment. The SAP customers who seek external support face less challenges than those who go it alone. These organizations struggle an average of 12% less when facing top innovation barriers.
“Optimizing cloud innovations is the difficult piece. The technology needs to be in place as the project starts, however, delays, mishits, the economy, and staffing shortages provide hiccups which extends the time to optimize.”
—SAP customer
Seek Outside Cloud Innovation Support to Establish a Functional Environment
SAP customers need help establishing cloud environments that give them further insight and management of their organizations.
Despite this, a dismal number of organizations are collaborating with cloud providers (16%) and/or external partners or consultants (15%).Opens in a new window. Most organizations are evaluating the needs of departments/business units and aligning on a strategy (23%) or upskilling staff to build capabilities and focus on innovations (19%). Embarking on cloud innovations without outside support—as many organizations currently do—could lead to a siloed cloud environment that fails to propel your organization forward.
Discover how to embrace innovation while overcoming cloud barriers.
SAP Customer Cloud Provider Desires and Innovation Challenges
SAP Customers Use MSPs
to Innovate in the Cloud
Organizations expect cloud providers to provide more benefits than they actually do and battle internal skills shortages as they shift to the cloud, according to research from ASUG and Syntax.
SAP customers expect a lot out of their cloud environments and from their cloud provides. The top benefits received from cloud providers are speed to delivery (50%), ease of scalability (48%), cost savings (47%), and reduced workload for IT staff (47%). When compared with the ASUG and Syntax study from 2021, respondents received more cost savings, better integration with other systems, and easier data management in 2022.
Although these benefits align with what SAP customers desire from cloud providers, they are not as robust as organizations hoped for. Areas where organizations wanted to see increased performance include cost savings cost savings (66%), reduced workload for IT (58%), better alignment with the strategic business direction (45%), and better integration with other systems (44%).
Figure 4: Cloud Provider Benefits and Innovation Challenges by Management Approach
Managing the cloud alone
Receiving cloud support
Cloud Provider Benefits
Speed to delivery
56%
67%
Easier to scale workloads
54%
67%
Better alignment with
strategic business direction
34%
43%
Easier data management
32%
43%
Ability to hibernate systems
15%
29%
Cloud Innovation Challenges
More expensive
37%
29%
Data migration
33%
24%
Lack of training available
38%
20%
Unplanned downtime
27%
19%
Source: ASUG and Syntax 2022 research
SAP customers must overcome several hurdles when working with cloud providers to achieve a cohesive and innovative cloud environment. Chief among them is lacking in house knowledge to manage the cloud, which increased from 34% in 2021 to almost half (47%) in 2022. Other areas where SAP customers struggle with cloud providers include costs being more expensive than anticipated (25%), inconsistent standards across providers (23%), lack of a cohesive and detailed cloud strategy (22%), and data migration (22%).
“At this time, we are not optimizing and we are floundering.”
—SAP customer
SAP customers who rely on external resources for cloud innovation experience fewer cloud challenges than those that do not.
External Support is Key to Reap Cloud Benefits
SAP customers have hefty expectations of their cloud providers and cloud environments.
To meet these expectations at the level organizations hope for, seeking outside support is essential.Opens in a new window. In fact, SAP customers who rely on external resources for cloud innovation needs experience fewer cloud challenges overall. Receiving external cloud innovation support resulted in greater cost savings, fewer data migration issues, additional training support, and a reduction in unplanned downtime. Organizations that do not seek outside support face an average of 11% more issues those that receive external support.
Learn how organizations are innovating in the cloud.
Opens in a new window.
ASUG is the world’s largest SAP user group. Originally founded by a group of visionary SAP customers in 1991, its mission is to help people and organizations get the most value from their investment in SAP technology. ASUG currently serves thousands of businesses via companywide memberships, connecting more than 130,000 professionals with networking and educational resources to help them master new challenges. Through in-person and virtual events, on-demand digital resources, and ongoing advocacy for its membership, ASUG helps SAP customers make more possible.
Opens in a new window.Syntax provides comprehensive technology solutions and trusted professional, advisory, and application-management services to power businesses’ mission-critical applications in the cloud. With 50 years of experience, 700+ customers, and 1,900+ employees around the world, Syntax has deep expertise in implementing and managing ERP and other applications deployments in secure private, public, and hybrid, environments. Syntax partners with SAP, Oracle, AWS, Microsoft, and other global technology leaders to ensure customers’ applications are seamless, secure, and at the forefront of enterprise technology innovation.