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“Customers who have already invested in S/4HANA on-premise may now get the impression that they have wasted millions.”

Christine Horton

August 17, 2023

2 Min Read
SAP On-Premise debate
elenabsl/Shutterstock

SAP has triggered concern among customers that they may have wasted millions on their on-premise investments.

It follows SAP’s recent investment call, where execs said the company will only offer access to innovation in the cloud via SAP S/4HANA Cloud, Public Edition or SAP S/4HANA Cloud, Private Edition, for users with Grow-with-SAP or Rise-with-SAP contracts.

Critics say that despite making significant investments in SAP ECC6 or S/4HANA on-premises, customers may have to adopt the public cloud version to continue receiving innovations.

SAP also revealed that access to AI and sustainability functionality may cost 30% more as an option with the premium package. That means on-premise or hyperscaler customers won’t be able to access these tools.

The German SAP User Group (DSAG) has issued a strongly worded statement in response to the call.

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DSAG’s Jens Hungershausen

“From DSAG’s perspective, this is a 180-degree turnaround from previous statements …The statement is a major blow,” said DSAG board chairman Jens Hungershausen. “It amounts to a paradigm shift.”

He added: “Customers who have already invested in S/4HANA on-premise may now get the impression that they have wasted millions.”

The group had criticized the software vendor for not focusing enough on SAP on-premise customers. Instead, it said, SAP was concentrating too much on cloud-based innovations and offerings.

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DSAG’s Thomas Henzler

Thomas Henzler, DSAG board member licenses, service and support, also weighed in. He noted there are “many loyal SAP on-premise customers organized in DSAG who followed SAP’s strategy early on and opted for S/4HANA. They are now asking themselves what else they can expect in the future and whether this is just the beginning of many more innovations from which they will not benefit.”

On-Premise Investments: Partners Stepping In with Support

In response, Rimini Street, the Las Vegas-based provider of enterprise software solutions, including support, managed services and maintenance for SAP, is offering 15 additional years of support and managed services for SAP ECC and S/4HANA on-premise clients. It says the approach means that customers can buy time to optimise their existing investments in SAP.

Want to contact the author directly about this story? Have ideas for a follow-up article? Email Christine Horton or connect with her on LinkedIn.

 

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About the Author(s)

Christine Horton

Contributing Editor, Channel Futures

Christine Horton writes about all kinds of technology from a business perspective. Specializing in the IT sales channel, she is a former editor and now regular contributor to leading channel and business publications. She has a particular focus on EMEA for Channel Futures.

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