Until the advent of the internet, software applications were delivered in physical form, via floppy disk or CD. Once devices were interconnected and began transmitting large amounts of data, however, applications could be delivered wirelessly over the internet.
In the late 2000s and early 2010s, this concept of “cloud computing” led to a paradigm shift in how software businesses provided their solutions to customers. Because cloud applications could be wirelessly delivered, enhancements could be pushed to customers on a quicker schedule. Rather than rolling out one major release of a software application on a yearly basis (making exceptions for important patches for bugs and security issues), companies could now send innovations and release updates more frequently, resulting in greater value to the customer.
SAP transitioned its ERP software strategy in the early 2010s with the advent of the SAP HANA database and SAP S/4HANA, and began a march towards the cloud with the acquisitions of Ariba, SuccessFactors, and Concur in the first half of the 2010s. In 2016, SAP S/4HANA Cloud was released, and the existing SAP HANA Cloud Platform was rebranded to SAP Cloud Platform in 2017. SAP has since encouraged customers to move from their on-premise landscapes to the cloud to take advantage of a handful of improvements.
There are numerous reasons why a company may want to take advantage of a cloud solution. For starters, some companies don’t have the IT support infrastructure to handle the technical backend of a system, and leasing a cloud solution relieves them of system maintenance. Similarly, administration responsibilities, such as security, can be reduced for a cloud customer as the provider handles security. This can translate into scalability without incurring large investment costs, and allows companies to focus on core business rather than managing the system backend.
Companies can save even more time and money by utilizing software-as-a-service solutions as they lower the time to value with a different implementation timeframe than on-premise versions. And as new functionality is added to the software and deficiencies or bugs are corrected, customers of cloud solutions can easily receive these improvements via the internet rather than a physical drive.
The main drawback to utilizing a cloud solution is that it limits the amount of customization an organization can make to the software. This may be unappealing to businesses that require the high level of flexibility that only an on-premise solution can provide.
Because software updates for cloud solutions come on a fixed basis, companies may also run into change enablement issues as they adapt to new or changed functionality that affect efficiency.
With the pros and cons in mind, here is an overview of SAP’s main cloud offerings.
SAP Cloud Platform (formerly known as SAP HANA Cloud Platform), is SAP’s platform-as-a-service offering. It serves as an agile layer around an SAP S/4HANA core, and provides extensibility and landscape management options for those who subscribe. It connects with internal networks via a tool called Cloud Connector.
SAP Cloud Platform can be run alongside existing on-premise solutions by utilizing SAP Cloud Platform Integration to facilitate information exchange.
With SAP Cloud Platform, users can perform analytics with tools like SAP Analytics Cloud; complete specific, lower-level business services such as taxes; collaborate with other departments or businesses; cleanse, manage, and model data; create custom apps and extensions for specific business purposes; integrate with other solutions; help businesses create mobile-friendly services, orchestrate processes for efficiency, and provide stronger database and solution security.
There are two “flavors” of SAP Cloud Platform. The first, called Neo, is focused on cloud capabilities available from SAP‘s own data centers and allows users to connect to SAP ERP solutions. The second, Cloud Foundry, is focused around any data center that meets a set of specific requirements and allows more extensibility options for developers and hyperscalers.
There are seven building blocks upon which an SAP Cloud Platform is built:
SAP has taken a two-pronged strategy to growing its suite of cloud solutions. It has developed certain solutions in house, while others have been added to its portfolio via an aggressive acquisitions strategy.
Built on top of the capabilities of SAP Cloud Platform, SAP Analytics Cloud is a business intelligence (BI) solution that combines planning, BI, and predictive analytics capabilities. Highlighted features include analytics for both cloud and on-premise applications, data connectivity and blending from across different applications, smart assist features like smart insight, data visualization stories, collaborations, and more.
SAP Ariba is a collection of applications that manage procurement activities. This includes supplier collaboration, contract and invoice management, and spend analysis. It was originally launched independent of SAP as an internet-based procurement tool and was acquired in 2012.
SAP Business ByDesign is a pre-configured ERP solution for medium-sized businesses that are looking for a robust ERP that won’t break the bank. It includes features from the following functional areas: finance, customer relationship management, human resources, project management, procurement, and supply chain management. Industry-specific functionality is also available.
SAP Concur is a travel and expense management application that can be utilized by employees to book business travel, get reimbursed for expenses incurred, and reconcile other employee-related, non-compensation-based finances. It was acquired by SAP in 2014.
SAP Customer Experience is a customer experience suite of solutions that consists of five cloud applications: SAP Commerce Cloud, SAP Customer Data Cloud, SAP Marketing Cloud, SAP Sales Cloud, and SAP Service Cloud.
SAP Digital Manufacturing Cloud is a collection of three applications (SAP Digital Manufacturing Cloud for insights, SAP Digital Manufacturing Cloud for execution, and SAP Digital Manufacturing Network) built to complement or replace the existing SAP Manufacturing Execution and SAP Plant Connectivity solutions.
SAP Fieldglass is an application focused on finding and hiring contingent workers such as temps or contract workers. It can be used to fill labor shortages that occur when demand is higher than expected or when existing labor is no longer able to complete the job. Similar to SAP Ariba, it was not initially developed by SAP and was acquired in 2014.
SAP HANA Data Enterprise Cloud is PaaS solution for customers to utilize SAP HANA in a cloud hosted by SAP or one of its strategic suppliers. Customers utilizing SAP HANA Enterprise Cloud get expert insight on how to run SAP HANA, and can easily manage their operations and scale as desired.
SAP Integrated Business Planning is a collection of supply chain planning applications that is based on the SAP HANA platform: SAP IBP for sales and operations, SAP IBP for inventory, SAP Supply Chain Control Tower, SAP IBP for demand, and SAP IBP for response and supply. From a functional perspective, it serves as the successor to SAP Advanced Planning and Optimization.
A suite of five cloud-based enterprise asset management solutions: SAP Asset Intelligence Network, SAP Asset Strategy and Performance Management, SAP Predictive Maintenance and Service, SAP Predictive Engineering Insights, and SAP Mobile Asset Management.
SAP Logistics Business Network is a centrally located logistics operations tool that provides intercompany collaboration such as developing products among business units, across borders, etc. It is only available in the cloud.
SAP SuccessFactors is an across-the-board suite of human capital management applications. It incorporates core HR and talent management features such as recruiting, onboarding, learning, and succession planning. It was initially an independent company before SAP acquired it in 2012.
SAP S/4HANA’s introduction in 2015 was a key point in SAP’s pivot to a cloud-first strategy. As time passed, SAP regularly added functionality to the cloud platform with quarterly updates and detailed SAP Community documentation on new features. Customers of SAP S/4HANA Cloud can currently take advantage of the finance, supply chain and supplier relationship management, sales, and R&D lines of business, with additional functionality such as an HR line of business being planned for delivery in 2022.
SAP S/4HANA Cloud customers get all the benefits of the cloud solutions, as well as the business advantages of SAP HANA’s in-memory computing architecture. This gives them the ability to gain real-time business statistics and analytics.
SAP S/4HANA Cloud also includes embedded versions of other SAP solutions, such as SAP Enable Now, SAP CoPilot, SAP Analytics Cloud, and a test automation tool.
In addition to the information laid out above, there are a handful of important SAP cloud terms you should also be familiar with. Here they are in list form:
Want to learn more about SAP and the cloud? Additional information can be found in the blogs and books listed below.
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