SAP has announced plans to acquire both Dremio and Prior Labs, as the enterprise software giant looks to expand its AI capabilities amid growing demand for data-driven intelligence.

Financial terms of the deals were not disclosed, but both transactions are expected to close in Q2 or Q3 2026, subject to regulatory approval.

According to SAP, the acquisition of Dremio will strengthen its data infrastructure layer, enabling customers to unify SAP and non-SAP data to more effectively run real-time analytic and AI workloads.

Specifically, the vendor said the move will enhance its Business Data Cloud and SAP HANA Cloud offerings to better address challenges around fragmented data environments.

The integration of Dremio’s lakehouse platform will provide a more open and scalable foundation for enterprise data, according to SAP, allowing organizations to access and analyze data across multiple systems without the need for complex data movement or transformation.

The platform’s serverless architecture is also expected to improve the cost and performance of large-scale analytics workloads.

“Enterprise AI doesn’t stall because the models aren’t good enough; it stalls because the data isn’t ready for AI agents,” commented Philipp Herzig, CTO at SAP SE.

“Dremio eliminates that bottleneck. Combined with SAP Business Data Cloud, we can now take customers from raw, fragmented data to governed, AI-ready intelligence on a single open platform.”

Post-acquisition, SAP said it will continue to invest in the open source projects at the heart of the Dremio platform – such as Apache Iceberg, Apache Polaris, and Apache Arrow.

SAP expands tabular AI capabilities

SAP has also moved to acquire Prior Labs, a specialist in tabular foundation models (TFMs), in a bid to strengthen its AI research capabilities and meet enterprise demand for AI that focuses on structured data.

As part of the deal, Prior Labs will continue to operate independently, with SAP committing to invest more than €1 billion over the next four years to scale the business into a global AI research hub.

The move builds on SAP’s existing work in tabular AI – including its SAP-RPT-1 model – and is expected to enhance the firm’s ability to deliver predictive insights from structured business data such as financial records, supply chain data, and customer information.

Unlike large language models (LLMs), which can struggle with structured datasets, TFMs are purpose-built for understanding and processing tabular data to enable more accurate predictions and business outcomes.

Commenting on the Prior Labs acquisition, Herzig said SAP sees significant untapped opportunity in AI that’s purpose-built for structured enterprise data.

“Prior Labs has built a leading TFM on public benchmarks and built one of the leading research teams in this category,” he explained.

“Combining their frontier model work with enterprise data and customer reach is how we intend to lead this category globally.”

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Schneider Electric is a leader in energy technology, with a focus on improving sustainability and business efficiency through electrification, automation, and digitalization.

These tenets apply to the firm’s own operations. With over 160,000 employees worldwide, the firm faces the constant challenge of upskilling its workers and training new employees in the latest software.

For nearly ten years, the firm has worked with ERP giant SAP and digital adoption platform (DAP) WalkMe to improve operational efficiency and provide staff with digital e-learning on the go.

ITPro spoke to César Guerra, platform strategy & product owner at Schneider Electric, to learn more about its digital adoption plans and how it’s using WalkMe to achieve them at scale.

“At Schneider, we always put digital adoption at the center of our IT strategy, to connect learning, change management, digital adoption, and support as one team and one voice as standard,” he says.

“So employees can develop proficiency as the system evolves.”

Using WalkMe for ongoing SaaS training

WalkMe provides onscreen, embedded guidance within SaaS platforms to help users learn how they work and become more confident using them.

Schneider Electric began to deploy WalkMe in 2017 to help its North American employees use Salesforce. From this starting point, it slowly began to expand WalkMe to its HR unit and procurement applications across the region, as well as for specific tools such as SAP and Coupa.

At the time this was a limited project, led by Guerra and two colleagues, which slowly began to grow in size as positive results came in.

In 2021, Guerra’s team fielded an SVP from Schneider Electric’s Digital Technology Center, an internal vendor for procuring solutions and IT, who recognized WalkMe’s potential.

“So this person, this SVP, saw what we were doing for North America and said, ‘Hey, why are you just doing it for North America? I want you to do it globally: what do you need?’ And I was like, well, I need people, I need budget and I need support on driving these conversations.”

Guerra adds that at the time, digital adoption was not seen as a high priority, certainly not in the same way as it’s seen now. Without a voice at the table, and a say in the budget, he says that people in his position aren’t able to drive the change that can make a real difference to a business.

“So my boss was a key sponsor to get me to those places, to open those doors,” he says.

“I was very lucky to be very honest, to have this support and this sponsorship and this vision from this excellent top leader and, because of that, I was able to found these centers of excellence, where now I have people in India, I have people in the Philippines, I have people in Mexico.”

The support and services offered by WalkMe has grown in lock step with this project, Guerra says, adding that SAP’s 2024 acquisition of WalkMe helped streamline operations.

“We grow together and we succeed together, we challenge each other,” Guerra tells ITPro.

“So with this acquisition of SAP, what I have noticed is even more support than we used to have, more consolidating [and] integration of the technology. It was very convenient for us because Schneider Electric, we are a great partner of SAP as well.”

Constant upskilling

Though WalkMe can be used for the onboarding stage alone, Schneider Electric has chosen to deploy it as a persistent, embedded helper to keep employees up-to-date on software features.

In systems like SAP S/4HANA and Salesforce, Schneider Electric now uses WalkMe to build user confidence and provide live training in relevant software.

“It basically builds the confidence, no matter the maturity or knowledge of the users,” Guerra says.

“It can be a new joiner, it can be someone that has been there long term and knows the tool, but due to the constant releases, the constant innovation, the constant new versions, WalkMe’s always there to guide them through these advanced rollouts.”

The firm is now seeing an 80% user engagement rate with new tools and has tracked a reduction of 60% in support tickets linked to training.

It’s not all plain sailing. Because Schneider Electric is a decentralized organization, each business unit has its own budget and software can therefore be rolled out in stages rather than simultaneously. But Guerra says that the two largest programs at the firm with SAP have WalkMe enabled, including the core of its operations: manufacturing.

With results like those mentioned above, Guerra and his team have an easier time making a business case for WalkMe in conversations with the C-suite.

“At Schneider Electric, we are a data-driven company,” Guerra says.

“Everything needs to be justified, everything needs to be cost efficient, everything needs to be built on value.”

While this value can be measured in financial terms, he adds, it also extends to user satisfaction as this has a material impact on the level of churn among workers.

Guerra adds that Schneider Electric’s implementation of WalkMe is highly personalized, with tailored advice given according to role.

Through Active Directory, the system also provides onboarding advice with the user’s name and role embedded throughout the advice it gives. The same workflows allow WalkMe to provide the user with role-specific onboarding tasks to complete, in order to get to grips with Schneider Electric’s SaaS tools.

After staff complete a task using WalkMe in-app guidance, Schneider Electric prompts them to complete a survey, so they can detail what worked, what didn’t, and if they know better methods to achieve the same result.

This feedback is used to further tailor the advice that users need.

“If there are key users where they understand, they know and they don't necessarily need the whole walkthrough, we can also automate the experience for them, eliminating unnecessary clicks or filling out information from them,” Guerra says.

Schneider Electric is on a constant mission to improve its internal processes, through process mining and analytics, which it carries out using tools such as SAP Signavio.

Looking ahead, Schneider Electric is trialling how WalkMe Learning Arc, the firm’s AI-native learning offering, can help to automate and personalize training at scale.

Learning Arc will feed into the firm’s ‘UNIFY’ program, which Guerra explains will see it consolidate the disparate ERP systems it uses across its various factory and business sites under SAP S/4HANA.

Currently, Schneider Electric is using SAP Enable Now to create learning content and simulations to prepare users for SAP S/4HANA adoption. Guerra adds that the firm is in year two of the Unify program, with a six-year timeline planned.

The pilot will eventually encompass 50,000 users across Schneider Electric’s global operations, with the new real-time, AI-produced content from WalkMe Learning Arc delivered directly to users.

UK business investment in AI is set to skyrocket over the next two years, according to new research from SAP, but many are failing to properly plan – and it could cost them dearly.

Analysis from the tech giant shows UK businesses are, on average, spending £15.94 million on AI this year. Moreover, they expect to increase their investment in the technology by an average of 40% across the next two years.

The report found a good return on investment (ROI), with the average UK business seeing returns of 17% from AI investments, and ROI forecast to almost double to 32% by 2027.

Many said they were already starting to unlock value from AI, with 36% reporting significant improvement in decision-making, 34% in customer engagement, and 31% in time to value.

Notably, businesses are confident in their long-term prospects with AI. More than three-quarters (78%) of executives believe AI will achieve a positive return within one to three years. More than half (52%) say it delivers returns faster than any other technology.

In recent months, agentic AI has become highly popular, with the average UK business expecting an ROI of 11% from agents within two years, equivalent to £2.7 million.

Fragmented AI programs are causing headaches

While the outlook is upbeat, the report warned that a concerning number of AI programs are fragmented, meaning many aren’t unlocking full value from the technology.

Indeed, 42% of UK enterprises described their investment as piecemeal. A key factor here is that around 37% of projects are department-led, according to SAP, while 15% admitted their programs were ad-hoc.

Only 7% have a strategic, enterprise-wide IT plan, the report found. As a result, 70% of UK businesses said they were unsure whether AI is delivering its full potential.

“UK businesses have the ambition, talent, and data to lead in AI, although too many are still treating it as a ‘technology project’ rather than a holistic business transformation,” said Leila Romane, managing director, SAP UK & Ireland.

“The real opportunity is to use AI to reimagine how companies operate, how people work, and how value is created for customers. When UK organizations take that broader, strategic approach to adopting the technology and embedding it throughout their business, the results will become tangible."

Success hinges on a solid strategy

The initial scramble to jump on the generative AI bandwagon may have paid dividends for some enterprises, but those examples are outliers and not the norm.

We’re approaching three years since the arrival of ChatGPT, the big launch that sparked the generative AI race, and yet a concerning number of enterprises still don’t have a clear-cut strategy.

Analysis from Carruthers and Jackson earlier this year found more than a quarter (26%) of enterprises had no formal data strategy. With this in mind, it’s no wonder that many enterprises have grown frustrated at a lack of solid returns.

Research from Appen showed fewer than half of businesses (47.3%) recorded a return on investment with AI in 2024.

While this SAP study paints a positive outlook in terms of ROI, nailing the fundamentals still remains paramount for any IT leader. So what are these?

First and foremost, data quality is a key hurdle for many businesses. In a study from Ataccama, 69% of chief data officers (CDOs) identified data quality as their top challenge.

40% also said they struggle to maintain “consistent” data quality, which has an adverse effect on project outcomes.

Meanwhile, data storage is also another key issue for IT leaders. Analysis from Hitachi Vantara in early 2024 showed data storage capacity requirements were set to surge by around 150% in the coming years, and many enterprises have been woefully unprepared to meet these rising demands.

Accommodating huge AI workloads and storage requirements requires equally huge investment if a “data storage crisis” is to be averted, the company noted.

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SAP has announced a significant expansion of its sovereign cloud offering with a new “On-Site” solution.

The launch of the On-Site model will give customers the ability to host managed cloud infrastructure within their own facilities in a move the tech firm said provides the “ultimate level of physical control and data residency”.

Thomas Saueressig, member of the executive board of SAP SE for customer services and delivery, said the expansion is in direct response to growing enterprise calls for heightened data sovereignty controls.

“Organizations around the world are seeking greater control over their digital environments,” Saueressig said.

“With Sovereign Cloud On-Site, SAP empowers customers to define their own sovereignty boundaries while leveraging our global infrastructure expertise and partnerships.”

The new On-site option aims to offer “flexible sovereignty models” that meet the needs of organizations operating across various areas, SAP said, particularly governments and businesses in regulated sectors.

Varied deployment options mean organizations can choose between SAP-hosted infrastructure, hyperscaler-based models, or customer-site hosted options.

“With SAP Sovereign Cloud On-Site, we are redefining what sovereignty means for our customers,” said Martin Merz, president of SAP’s sovereign cloud division.

“By placing SAP-managed infrastructure directly within customers’ own facilities, we offer unmatched control, compliance, and operational assurance without compromising innovation.”

What to expect from SAP’s sovereign cloud

SAP said its sovereign cloud initiative centers around a series of “core capabilities”, which naturally includes a strong focus on data sovereignty.

Under the scheme, organizations retain full ownership and control of sensitive data, based on local regulatory requirements.

“Operational sovereignty” features allow enterprises to manage environments with SAP resources while “technical sovereignty” enables customers to run SAP workloads using deployment options based on their individual needs - this applies to those operating in regulated industries, for example.

Sovereign cloud in the spotlight

Data sovereignty has become a recurring talking point on both sides of the Atlantic in recent years. In May 2024, industry analysts told ITPro that sovereign cloud services are now the “bare minimum” expected from European customers.

A key factor behind this growing demand is the array of stringent regulatory requirements introduced - or currently being introduced - in Europe. Naturally, providers have acted swiftly to meet this demand.

A host of industry heavyweights, including Google Cloud, Amazon Web Services (AWS), Microsoft, and Oracle, have all since launched dedicated sovereign cloud services for European customers.

Recent months have seen new concerns arise about data sovereignty, with research showing enterprises in the UK and EU both cited worries about US interference.

These concerns came after the Trump administration issued a memorandum in early 2025 pledging to defend American tech companies from “overseas extortion”.

In the wake of the move, Microsoft president Brad Smith said the tech giant would resort to legal action to protect EU customers from US demands to shut down services.

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Capgemini has joined forces with SAP and Mistral AI to develop custom AI tools for sensitive industries, including finance, defense, utilities, and public sector.

The rise of AI has raised concerns about the risks, in particular with regards to data security in sensitive industries such as the public sector — with a majority of security leaders worried that AI could cause data breaches or other security challenges.

Capgemini said it would use Mistral’s generative AI models on the SAP Business Technology Platform to develop solutions for industries with strict data requirements, helping them take advantage of AI for personalized services and to cut costs as other enterprises in less heavily regulated industries are already doing.

"This unique collaboration provides a trusted and secure environment to deploy custom AI solutions within SAP for those industries with strict data requirements such as financial services, public sector, aerospace & defense, and energy and utilities," the company said.

The company said the collaboration between the three companies would help accelerate the deployment of custom generative AI solutions inside secure environments, ensuring organizations meet regulatory requirements.

“Enterprises are increasingly turning to generative AI to enhance their resilience, streamline operations and accelerate time to value," said Fernando Alvarez, Chief Strategy and Development Officer and Group Executive Board member at Capgemini, in a statement.

"As a trusted business and technology transformation partner to our clients, Capgemini is committed to helping them evolve their critical business processes through the secure and tailored application of AI."

Pre built tools for sensitive industries

The partnership includes a library of more than 50 pre-built custom business AI use cases built using Mistral AI's models and validated by SAP.

"The solutions are grounded in responsible and ethical AI by design, with built-in governance and alignment with regulations, enabling innovation while also ensuring data security," Capgemini said in a statement.

Capgemini offered three examples of use cases: augmented field workers that can resolve operational problems for the aerospace and defense industry; drone-based inspection for predictive maintenance for energy and utilities; and supply chain systems for intelligent purchasing to source the "most convenient" products.

Capgemini and SAP expanded their pre-existing partnership to include AI in 2024, with this deal highlighting the challenge of using AI in heavily regulated industries.

Earlier this year, Capgemini announced a partnership with Mistral to push the adoption of new frontier models.

Founded in France, Mistral AI is seen by some as Europe's answer to American AI dominance, and last year signed a major deal with Microsoft for use on Azure.

"By combining our frontier, multilingual and highly customizable AI models with Capgemini’s expertise in delivering real world industry-specific generative AI solutions, and the assurance of SAP’s robust technology platform, we are making the effective integration of AI more accessible for all organizations, including those in highly regulated industries," said Marjorie Janiewicz, Mistral AI Executive Board member and Global Head of Revenue.

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A lack of digital maturity is holding UK businesses back, hampering growth, and slowing down AI adoption, according to a report from SAP.

Businesses face a range of issues when it comes to the maturity of their tech portfolios, with 27% of surveyed firms citing the burden of legacy technology as a key barrier to scale.

This highlights the difficulty of integrating advanced technologies into dated systems, SAP said.

Data and management infrastructure are also an issue, with over a third (34%) of organizations stating that either a lack of quality data or a lack of quality tools for planning are among the top three challenges affecting business growth.

As many as a third of firms indicated that insufficient datasets are hindering AI model training and affecting accuracy, while 32% are struggling with inaccuracies generated by AI systems.

“Addressing barriers to growth, like digital immaturity, must be a priority for the UK’s high-growth organizations if they wish to reach their potential,” Wesley Doyle, Head of new business at SAP UKI, said.

Similarly, businesses are contending with a significant shortage of skilled talent in the technology sector.

More than a third (34%) face difficulties in attracting and retaining employees with the necessary expertise to properly adopt AI. Little wonder, then, that 40% of firms are prioritizing skills development in their growth strategies.

Businesses struggle with AI adoption

Despite feverish enthusiasm for AI, businesses have been contending with many of the problems highlighted here for a while as adoption projects ramp up in size and volume.

Data, for example, has been a continuous thorn in the side of many firms, with a recent report finding that 26% lack a formal data strategy and 39% report little to no data governance despite a keen focus on AI use.

An earlier study from Red Hat found similar concerns around skills and training, with 80% of IT managers pointing to an urgent skills gap and 40% suggesting their own firms lack the necessary skills to fully harness AI.

Other concerns include the quality of the technology itself. A KPMG report from last summer found that 60% of tech leaders consider result accuracy and the potential for hallucination as their biggest concern.

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SAP has announced new sovereign cloud capabilities in the UK, meaning customers will now be able to process data entirely within the borders of the country.

The offering is now fully operational and available to customers, SAP said in a statement, and is designed to meet the highest standards of data residency, security, and compliance within the UK.

It’s targeted specifically at public sector organizations, critical national infrastructure such as utility firms, and any other highly regulated industries. SAP said it’s particularly relevant for organizations in aerospace, defense, government, and energy or natural resources.

The offering includes a range of SAP products, including SAP S/4HANA Private Cloud Edition, SAP SuccessFactors HCM, SAP Business Technology Platform, SAP Analytics Cloud, and others.

This move builds on SAP’s initial investment into the UK in 2021, the firm said, and aligns with growing customer demand for sovereign cloud services that ensure security and compliance.

“In today’s complex global environment, it is vital for our customers to understand that their data, as well as our solutions and services, are secure,” Leila Romane, managing director, SAP UK & Ireland, said.

“These are managed by security-cleared personnel in dedicated, local, secure facilities. Sovereignty is essential in protecting against unlawful data access, ensuring compliance, and mitigating risk,” she added.

SAP jumps on the sovereign cloud bandwagon

SAP is the latest in a string of businesses to announce sovereign cloud offerings as customers in the UK and Europe flock to data residency options. Analysts previously told ITPro that sovereign capabilities are now the “bare minimum” for cloud providers.

Oracle has been pushing particularly hard on this front, unveiling a dedicated sovereign cloud region in Europe in 2023 and talking up demand for sovereign cloud more recently at Oracle CloudWorld 2024.

Oracle CTO and chairman Larry Ellison even went so far as to predict that most international governments will want a sovereign cloud region, with Oracle well placed to serve that demand.

Other firms have been rolling out services in this domain as well. Rackspace unveiled a sovereign cloud service targeting UK public sector customers earlier this year, for example, while Scottish cloud provider DataVita and HPE announced a dedicated sovereign cloud service for UK customers in August.

Similarly, Microsoft rolled out data residency plans in Europe at the start of this year, with one tech analyst telling ITPro that the move had been a “long time coming.”

The demand for sovereign cloud has to do largely with regulatory compliance in Europe. Data on a sovereign cloud must reside entirely within the borders of a region, and so its risk of being accessed by another region is reduced massively.

This is an attractive feature for certain businesses, particularly public sector ones and those in critical infrastructure, as it ensures that potentially sensitive or high-risk data is protected from external access.

Some data processing regulations also demand that data be processed in-region, with EU regulators in particular focusing heavily on these requirements.

UiPath and SAP have unveiled a new integration designed to help SAP customers boost their automation capabilities and streamline cloud migrations.

Slated for release this month, the enterprise automation specialist’s UiPath Platform is being integrated with SAP Build Process Automation and delivered as a new SAP Solution Extension.

The offering has been designed to facilitate the automation of business processes at scale across diverse IT environments – including both SAP and non-SAP systems – to drive transformation, streamline cloud migrations, and reduced costs.

In an announcement, Michael Ameling, EVP and chief product officer at SAP Business Technology Platform, SAP SE, said the offering caters to customers’ preference for a “holistic approach” to end-to-end automation.

“We’re excited to welcome the market-leading capabilities of UiPath into the SAP Build Process Automation solution,” he commented. “As an SAP solution extension, we can provide customers with the critical ability to scale and deploy enterprise automation across their entire organization.”

With the new extension, customers will be able to leverage SAP’s portfolio of enterprise automation tools, which include integration platform as a service (iPaaS), process mining, and robotic process automation (RPA).

It also presents a simplified migration process to SAP S/4HANA Cloud by automating repetitive tasks - such as the preparation, synchronization, and cleaning of data between source and target systems – to speed up the migration process and reduce risks.

Additionally, the pair said the integration will also help organizations build industry compliant best practices and end-to-end processes to create a “digital thread” that connects all applications, productivity tools, as well as legacy systems.

Commenting on the new offering, UiPath’s chief product officer, Graham Sheldon said the two companies have worked closely to create “one of the most comprehensive, integrated automation offerings on the market.”

“This helps SAP users automate business processes across their entire enterprise and drive the rapid deployment of AI,” he added.

“By offering the UiPath Business Automation Platform within the SAP Build Process Automation solution, customers can achieve more impactful business outcomes, accelerate transformation with automation, and gain added trust and compliance within their automation programs.”

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As I leave SAP Sapphire 2024 in Barcelona, I have Concur on my mind. This is odd because the travel and expenses system didn’t get much attention at the conference and I also hate filling out expense forms. 

I don’t use Concur enough to commit any of the expensing process to memory – and I usually don’t bother to expense claims from the few international trips I go on each year. Instead, I tend to opt for the free stuff or search out the cheapest eats. Businesses have to tackle the same mentality, SAP seems to understand this and has centered the ease of use of its generative AI tool Joule at its summer conference. 

When I speak with SAP’s chief revenue officer, Scott Russell, he tells me that Joule has been developed for such a situation; to walk people through complicated online processes that they might not have much experience with. Like all Copilots, it will harness data from past use, offer prompts and suggestions, and help me through the whole thing in minutes.

While I was in Barcelona I got three tacos for €5 from Tacos Tacos – a superb Mexican popup in the El Poble-Sec neighborhood of the City. Will I expense that? Only if our IT team activates Joule. 

“An employee might only use an SAP service, like Concur, once or twice a year, they’re not going to be especially used to it – that’s the customer Joule can really transform,” Russell tells ITPro.

‘Transform' is the keyword here. When you start a digital transformation, you also need to remember the people in your business and bring them along too. But if we take SAP as an example, and enterprise resource planning (ERP) and all the other types of software that it provides, there’s a lot of complexity. They’re very technical systems – most of the people using them will be of that mindset – and it creates a sort of digital inequality within the workforce. 

This is where AI can, and should, help. A large part of ITPro’s Sapphire coverage focused on new AI tools and how they might ultimately be used to entice legacy customers into the cloud. There are several reasons to believe this: there is still a subset of SAP customers using on prem, CEO Christian Klein talked at length about why the company wants its customers in the cloud, and Joule featured in almost all of its announcements. 

What Joule can do is truly transform a business, from the C-Suite down to the occasional users of an SAP system. WalkMe, the digital adoption platform (DAP) for accelerating digital transformation, is also key here – SAP announced it would acquire the firm on 5 June. Average users, who dip in and out of platforms with no guarantee of specialist knowledge, could use both tools to save valuable time. This only improves the efficiency and cost savings for a business. 

Scott Russell offers what could be the best way to look at it when he tells me that “customers are not actually asking about AI, what they’re actually asking is more specific – they want to know what tools and processes can help them do their jobs and succeed.”

With its AI Copilot Joule taking center stage at Sapphire 2024, one could easily forget that SAP is actually a company that specializes in enterprise resource planning software (ERP). 

Joule is SAP’s copilot; The name is actually a unit of energy or work, as used by the International System of Units. However, for SAP, Joule is a glimpse at a future where AI Copilots are the single interfaces of our work.

So whereas the cloud stores and analyzes our data within numerous different applications and programs, Joule will give the users a single interface to interpret the information – for analytical projects, at least.

Seemingly every announcement from Sapphire featured Joule in some way, even the new acquisitions for WalkMe, an automated online guide, has a clear tie-in with the copilot. The question is why is an ERP software giant pushing hard for generative AI?

The obvious answer here is that SAP has something that will generally benefit its customers – a way of taking their data and putting it to work, right in the systems they need.

SAP has to address legacy customers

However, SAP customers on legacy on-prem systems might see it differently. One could easily come away from Sapphire 2024 with a sense that SAP wants to use AI and tools like Joule as bait to entice more and more legacy customers to the cloud.

Across the conferences in both Barcelona and Orlando, CEO Christian Klein spoke of the benefits of being in the cloud, from access to the latest innovations to the simplification of its software stack.

That message felt very clear cut from day one, but during a post-keynote Q&A session, where Klein was asked about SAP’s legacy ERP system customers, he drew a pretty definitive line in the sand.

“I guess we will find no one – no investor, no customer, no partner – who believes the future is on-prem,” he said. 

“While we want to take all of these customers with us, and I know some of them invested a lot into their on-premise business, we are trying hard to take all of the customers with us, but there is one destiny, and that's the cloud.”

For those 100-odd legacy customers that reside within its 400,000 customer base, Klein promised to “find a solution” so that they could continue to work with SAP.

That solution will most certainly involve some migration as no competitive customer can afford to sit on a 10-year-old ERP release – the pace of change is not just about the survival of the customer, but also SAP itself, according to Klein.

“You also don’t have the iPhone from 10 years ago. You're also not using Microsoft Office from 20 years ago. That's how technology is moving and you have to allow SAP to follow that trend otherwise SAP will not exist anymore in the future. And that's where we all agree,” he said.

“We don't want that. We want to have a damn successful SAP for our customers, that's what our strategy is about.”

A long summer of elections, sporting events, and multiple conflicts happening all at once may change Europe beyond recognition. However, 2024 is still likely to be remembered for the relentless expanse of generative AI – the year of the Copilot, if you will. 

Companies across Europe are keen to tap into the potential of generative AI and every tech company wants to capitalize on that, which has created a busy market.

Copilots are coming out thick and fast, automated guides are populating every day platforms, and a new level of automation is now at our disposal. The challenge, it seems, is fast becoming about differentiation – essentially, why should we care about your AI solution?

For a company like SAP, with its dedicated focus on B2B, customer data is the key selling point. Unlike ChatGPT, or Microsoft Copilot, which takes data from the web or the general public, SAP takes data from the companies that use its services.

Joule, for example, SAP’s generative AI platform, has “access to the broadest B2B data model in the tech industry,” CEO Christian Klein said at SAP Sapphire in Barcelona. With this data, Klein stated that Joule would enable 20% more productivity and higher quality of performance and said that Joule was ready for “prime time”.

“There is no need, like other tech companies, to build an AI use case and manually integrate it into a business process,” Klein told journalists at the Roca Gallery in Barcelona.

“One in 80% of the world’s transactions are somehow processed by an SAP system – so guess what? We can embed the AI, the intelligence, right into the business process. So no customer needs to do anything custom, to apply AI because we embedded it in our solutions and the customers get the immediate benefit.”

We can speculate here that Klein is maybe being a little critical of the wider market, or of companies that have added generative AI into existing systems with little benefit or improvement. Here, SAP seeks to differentiate itself as it wants to deliver “responsible AI”, particularly in Europe, where regulation is tight.

“We are super transparent with regard to the algorithms, super transparent how we store the data, we can manage it in Europe, we can locate it in Europe – everyone has the right to understand what is going on with their data,” Klein said. “And that is actually what differentiates SAP and we are the only kind of European tech company of that size.”

SAP sees challenges and opportunities in Europe

With Sapphire taking place in Orlando in the US the week before, most of SAP’s biggest announcements had already been reported and analyzed long before we reached Barcelona’s Fira Grand Via. But the German software giant was keen to stress the opportunities within Europe – though it is not without ‘challenges’, according to Klein. 

“Europe has great opportunities,” Klein said. “When I look into Spain, France, into Italy, Germany, just look at the public sector. Look at the healthcare system. A lot is in the hands of the federal government and there is good access to data and we need the environment to collect data, to share data, to be the best in research, to be the best in patient care you have to apply the technology which is available today.”

“The point is, we are not a Union,” Klein said. “It is really important to have, in this sense, more European Union when it comes to digitization, especially the startups.

“SAP can deal with them but startups need a huge market to scale. They compete with startups from the US, from China, and it is all about the market size and the ability to scale fast, and of course to get financial funds. This is where we need to be more like the European Union.”

Klein added that on the economic side, companies need to lean into new technologies, and stated that being in the cloud has a clear advantage, particularly for applying AI.

“That makes a whole lot of difference,” he said. ”For powerful AI, you need the cloud, you need digitization. Now there is always a new version, and it is hard to keep up with the pace of innovation, that’s why, four years back, we made the decision to move to the cloud and not because we liked the cloud so much, but because we see, for the customer, it is much better.”

There was a small admission here for the on-premise world, which Klein said was forced to wait for their upgrades, often waiting seven years for the next release. That puts them at a disadvantage, particularly in Europe which has always been overshadowed by competition in the US and China – European customers, Klein said, cannot wait seven years to consume new innovation.

“We are not talking about this because it is a nice to have, in my eyes it is essential to increase the speed of innovation to compete in the highly competitive market that is out there,” he said.

SAP has appointed Dr Philipp Herzig as its first chief artificial intelligence officer (CAIO) alongside the creation of a new end-to-end, AI-focused business unit.

The new dedicated business area covers the entire value chain for SAP’s Business AI offering, including product development, research, customer implementation, and everything in between, the firm said in an announcement.

Reporting directly to company CEO Christian Klein, Herzig will lead the unit. A long-time SAP veteran, he joined the company as a student in 2009 and has since held various leadership roles across the business, including his most recent role of senior vice president and head of cross product engineering.

SAP said the new setup aims to accelerate customer uptake of business AI solutions and services and underlines the “central importance” of business AI as a strategic driver for growth.

“SAP’s increased focus on business AI marks the start of a completely new generation of enterprise innovation, and I’m honored to have the chance to help customers make the most of this unprecedented opportunity,” Herzig commented.

SAP driving tangible AI use-cases for customers

SAP said it currently has 155+ AI use scenarios in action across more than 24,000 customers and has plans to bring in 150 additional cases during 2024. 

As new AI chief, Herzig will lead a dedicated team that will work with staff across the wider business with the aim of integrating artificial intelligence into every aspect of the SAP portfolio.

This team includes various established SAP leaders such as global head of AI, Walter Sun.

Sun joined SAP from Microsoft in September 2023 and now leads the entirety of the firm’s product engineering activity surrounding business AI.

“I look forward to working with our team, as well as our ecosystem of customers and partners, to drive the development and delivery of relevant, reliable, responsible business AI that fundamentally changes the way business runs,” Herzig added.

Last month, SAP outlined its intentions to focus on business AI and other key strategic growth areas as part of a sweeping update. At the time, it said it intends to transform its operational setup to capture AI-driven efficiencies and to prepare the business for “highly scalable future revenue growth.”

The company-wide restructuring was estimated to affect approximately 8,000 positions, with the majority “expected to be covered by voluntary leave programs and internal reskilling measures.”

Software giant SAP has announced plans to invest more than $2 billion as part of a restructuring program aimed at integrating generative AI in key business areas – but it won’t be cutting jobs en masse. 

The corporate restructure will affect around 8,000 roles in total, the company confirmed in a statement on Tuesday. This program aims to drive efficiency through the integration of AI tools and deliver significant revenue boosts.

“In 2024, SAP will further increase its focus on key strategic growth areas, in particular Business AI,” the firm said in its statement. “It also intends to transform its operational setup to capture organizational synergies, AI-driven efficiencies, and to prepare the company for highly scalable future revenue growth.”

The German software firm recorded strong revenue growth in 2023, exceeding expectations. In the year ahead, it also forecasts double-digit growth in revenue from cloud services, begging the question of why it’s embarking on such a comprehensive restructuring initiative.

Much like counterparts in the global tech industry, generative AI has offered an opportunity for the firm to automate roles, cut headcount, and drive profits.

AI-related job cuts were a key concern during the early onset of the generative AI ‘boom’, with warnings of widespread labor market disruption. As of yet, this hasn’t quite panned out, but there have been initial signs that the technology is viewed among business leaders as a means to reduce staff numbers.

PwC’s latest CEO outlook study found that leaders expect to reduce headcount “by at least 5%” in the year ahead due to the integration of generative AI tools.

Tangible examples of this in action last year saw BT announce plans to cut thousands of roles in a bid to automate positions while IBM also said it will replace thousands of back office staff with AI.

In December, reports also emerged that Google was replacing staff in its ad sales division, a key business segment, and replacing them with AI.

SAP eyes staff reskilling and 'voluntary leave programs'

But SAP’s approach here appears measured. The company has been keen to emphasize that it won’t be embarking on a ruthless spree of job cuts, marking a significant change in tone to other industry stakeholders in recent months.

SAP said the majority of affected positions are “expected to be covered by voluntary leave programs”. It has yet to provide additional details on what this will entail, but it suggests the company wants to avoid the negative press of abrupt Zoom meetings and the optics of disgruntled staff leaving offices with boxes.

“Internal re-skilling measures” will be a key focus of this program, SAP said, also suggesting that the software firm intends to train staff in relevant AI skills with an eye for embedding them within different departments.

The rapid adoption of generative AI over the last year has presented significant skills challenges for firms across a range of industries, with research showing that an emerging ‘AI skills gap’ will be a key hurdle for firms in the coming years.

Notably, SAP said that it expects to exit 2024 “at a headcount similar to current levels”. The firm has more than 100,000 employees across global operations.

Revenue boosts as a result of this restructuring won’t be an instant win for SAP, either. All told, the costs of the initiative will be substantial, which it expects to have a negative impact on 2024 earnings.

“Restructuring expenses are preliminarily projected at around €2 billion [($2.18 billion)], the vast majority of which is expected to be recognized in the first half of 2024, impacting IFRS operating profit,” the company said. “Excluding restructuring expenses, the program is expected to provide only a minor cost benefit in 2024.”

With long-term forecasts, however, the benefits do become clearer. SAP said it expects to unlock €500 million ($544 million) in operating profits in 2025 alone due to “efficiency improvements”.

Technology talent solution provider FDM Group has teamed up with enterprise application software giant SAP to train a new generation of accredited tech consultants. 

The firm said the partnership aims to bridge the digital skills gap at a time when the SAP EMEA cloud services market has registered nearly 50% annual growth. 

By comparison, organic partner capacity growth has seen just a 20% annual increase, meaning talent pipelines currently do not have enough certified SAP consultants available to handle demand.

In an announcement, FDM said its new partnership with software giant SAP will work to tackle this disparity by training up net new talent for the market. Upon completion, qualified candidates will be placed in relevant positions at SAP customers and delivery partners to provide key support across their client networks.

“FDM Group is known for leading the way in adapting to ever-changing and high in demand technologies, while supporting their customers with the right talent in the right place,” commented Andy Brown, FDM Group’s chief commercial officer.

“As a top 50 UK firm for Social Mobility, diversity and progress is at the heart of our strategy, and we are excited to be working with SAP to help introduce a dynamic, diverse and forward-thinking workforce into the SAP’s global ecosystem.”

Founded in 1991, London-headquartered FDM Group specializes in providing technical training and commercial experience to prospective digital consultants, before deploying them across its list of clients.

For organizations, the talent provider offers flexible contract terms, as well as scalable resources at short notice across multiple client sites.

Since its inception, FDM has grown to include more than 5,500 employees from over 95 countries, working across the EMEA, Asia Pacific, and North America regions. Recently, the firm bolstered its technical expertise capabilities by partnering with professional body ISACA to enhance its cyber security services credentials.

Now, as part of its latest collaboration, consultants will be trained in popular SAP business software, including SAP S/4 HANA, SuccessFactors, as well as the SAP Business Technology Platform.

“FDM’s academy programmes combined with SAP Partner Talent Initiative boot camps offer an excellent opportunity for our customers and partners globally to access a pipeline of diverse talent in a cost-effective way,” said Peter Matejka, SAP’s Partner Talent Initiative program manager for EMEA North.

Mercedes F1 has announced a new partnership with SAP in a bid to overhaul its IT operations and expand the use of artificial intelligence (AI) to streamline resource planning. 

The partnership will give the racing team access to SAP’s business artificial intelligence (AI) technology, providing capabilities for forecasting costs, predicting budget requirements, and optimizing the team’s supply chain. 

Mercedes will also be able to take advantage of SAP’s secure S/4HANA cloud environment that will underpin the team’s digital functions and allow for easy and reliable scalability over time.

A crucial foundation for success in modern F1 involves navigating the competition’s cost cap, Mercedes said, which limits how much teams can spend in a single season. Overspending could see teams incur severe financial and competitive penalties.

The collaboration should help Mercedes avoid any difficulty in this regard, enabling the team to deliver accurate cost forecasts and budget optimization. 

Mercedes’ CEO and team principal Toto Wolff expressed his optimism about boosting the team’s efficiencies with the collaboration. 

“We have a shared heritage and commitment to innovation and improvement, which will meaningfully contribute to our on-track performance. SAP is a global leader in its field, and we could not think of a better partner to help us improve our efficiencies in 2024 and beyond.”

Cloud advantages on and off the raceway

Formula One is among the most data-intensive sports on earth, with teams leveraging a range of technologies to unlock performance insights. 

Julia White, executive board member at SAP SE, said the use of technologies such as artificial intelligence can make the difference between success and failure.

“Formula One is one of the most technologically innovative sports in the world, where incremental gains yield significant results. Given the extreme conditions under which Formula One teams operate, motorsports provide a global platform to showcase skill and engineering excellence,” she said.

“But beyond the race day performance, there’s a lot going on behind the scenes. SAP is proud to partner with the Mercedes-AMG PETRONAS F1 Team to make sure its operations are as fine-tuned as its cars.”

As White noted, Formula One is uniquely placed to derive significant benefits from cloud technologies both behind the scenes, and in its on-track performance as well. 

With around 100 sensors on each car, and approximately 1,500 data channels, being able to quickly and securely process, organize, and provide insights on that data is essential.

In addition, the same data processing capabilities are vital for cost effectively refining the cars’ aerodynamic profile.

AWS simulations, for example,have played an important role in helping teams achieve the marginal gains that can decide a race or even a championship. 

Enabling teams to model a car’s aerodynamic performance without having to carry out prohibitively expensive and carbon-intensive physical tests is invaluable. 

But ensuring the simulations match the accuracy of the physical tests requires significant compute capacity and AWS’ collaboration with F1 allows for teams to easily scale their computational tasks.

Mercedes will hope its partnership with SAP provides similar cost-saving and performance benefits on the business side of its operations.

After running SAP ERP Central Component (ECC) for more than 13 years, marketing company Vistaprint found limitations with its legacy system. The firm wanted to improve access to data and analytics, enhance the user experience, increase agility, and reduce infrastructure costs. So it embarked on a transition to S/4HANA across key business functions including finance, supply chain, sales, and analytics.

"We had challenges with just data volume management in ECC with lower average order value and high order count. The number of transactions is high,” says Mukul Agrawal, director of technology at Vistaprint.

“In ECC if I was going to run a report on any action just for one month, it would crap out. I would not be able to run the report, because the volume is so high."

Overcoming the challenges of legacy tech

Agrawal says the implementation project began in September 2019 with a scheduled go-live of April 2020. Within this seven-month timeframe, the team completed conversions and testing in sandbox, development, and QA environments.

Just as the go-live was approaching in March 2020, COVID-19 forced the entire team to work remotely. "We had a decision to make. Are we going to go live or are we going to pause this implementation?" says Agrawal. "We were ready. So, we met with our CIO and CFO we decided we’re going to go and implement the system completely."

On 25 April 2020, Vistaprint went live on S/4HANA with over 250 people working remotely across the globe. According to Agrawal, careful planning, testing, and practice enabled a smooth transition despite the fully remote cutover.

The implementation team faced some specific technical challenges during the migration, however. "There are specific conversions that happen on fixed assets when you're moving from ECC to S/4. Even though the GUI looks very similar between the two systems, the back end, the database structure, the capabilities are very different."

Proactively identifying and cleansing stale legacy data was critical to avoid issues during cutover. Agrawal also highlighted the importance of optimizing downtime during the transition. "We cannot be without our system for 24 or 40 hours. There was a lot of TLC given to that process. SAP told us it was going to take ten business days of downtime. We were able to reduce our downtime to about 21 hours."

What moving away from on-prem means

The implementation of S/4HANA has delivered major transformational benefits across Vistaprint's business operations and processes. One area where Vistaprint has seen dramatic improvements is in data access and reporting. 

With S/4HANA's embedded analytics and real-time data capabilities, month-end closing processes that previously took teams eight to ten hours to run can now be completed in just three minutes for some reports. This massive acceleration in reporting speed enables much faster financial closes each period. 

In addition, Vistaprint has been able to eliminate the reconciliation needs between its legacy ECC system and separate analytics systems previously required. Now all reporting and analytics run directly and natively from the single source of truth in S/4HANA.

On the user experience side, adopting SAP Fiori apps on mobile and desktop has enabled Vistaprint's employees and executives to interact with the SAP system more easily and efficiently across various tasks. For example, executives can quickly approve purchase requisitions, marketing spend requests, and other transactions directly through apps rather than relying on cumbersome offline processes. 

Vistaprint has also been able to leverage S/4HANA's automation to realize process efficiencies. Tasks that previously required three to four days per month of manual efforts from the finance team for regulatory reporting, tax filings, VAT reporting across geographies, and other filings can now be completed automatically.

Finally, moving to S/4HANA has enabled Vistaprint to retire legacy systems and reduce its infrastructure footprint by migrating to SAP's cloud. This cloud transition along with decommissioning of ancillary systems has reduced Vistaprint's annual infrastructure costs by over $250,000.

How to transition to the cloud without a hitch

For any organization considering S/4HANA migration, Agrawal recommends maximizing preparatory work in the ECC environment beforehand. "Anything that you can do in your pre-planning phases, any work that you can do on ECC to de-risk your actual implementation from ECC to S4 – you should sign up and do. Because that's much less work for you to do during the implementation.

“When you are running an implementation. You have a consulting team and implementation partner; you're paying for two systems at the same time, so you need to reduce that duration.”

He also advises investing in tools to automate and accelerate the process. Vistaprint uses solutions like ActiveControl from Basis Technologies for transport management and risk mitigation. "Definitely look at these ancillary tools. These are your de-risking tools, help your change management, help it speed time to market as well.”

He continues: “Even now we use it. It's not only used for upgrade, but we also use it on daily production releases, and these tools help us to do from a weekly or monthly to production release to a daily production release because these things are automated right now for us.”

SAP and Google Cloud have expanded their partnership to include a comprehensive new open data offering, designed to simplify data landscapes and help enterprises view their entire data estates in real time.

The new integration will help customers build an end-to-end data cloud that pulls together data from across the enterprise landscape using both SAP Datasphere and Google’s data cloud, without the risk of duplication.

By combining critical business data – such as supply chain information, financial forecasting, and human resources records - with non-SAP data from Google Cloud, organizations can leverage a “fully-defined data foundation”, the long-time tech collaborators said.

In an announcement, Christian Klein, CEO and member of the executive board of SAP SE, said the development introduces “entirely new opportunities” for organizations to “derive more value from their full data footprints”. 

“SAP and Google Cloud share a commitment to open data and our extended partnership will help break down barriers between data stored in disparate systems, databases, and environments,” he said.

“Our customers not only benefit from the business AI already built into our systems, but also from a unified data foundation.”

This disparate business data is pulled together using SAP Datasphere and sent to Google Cloud’s fully managed, serverless data warehouse offering BigQuery, where users can perform further analysis.

That includes actioning queries to blend data from both SAP and non-SAP software, eliminating common data siloes from various sources across the likes of marketing, sales, finance, and the supply chain.

Additionally, users can generate trusted insights using Google Cloud’s artificial intelligence (AI) and machine learning (ML) services to train data models from both SAP and non-SAP systems, as well as perform advanced analysis to explore financial and business outcomes.

“SAP and Google Cloud now offer an incredibly comprehensive and open data cloud, providing a foundation for the future of enterprise AI,” said Thomas Kurian, Google Cloud CEO. “Few resources are as important to digital transformation as data. 

“By deeply integrating SAP data and systems with our data cloud, customers will be able to utilize our analytics capabilities, as well as advanced AI tools and large language models to find new insights from their data.”

The companies also revealed they plan to partner on joint go-to-market initiatives for enterprises’ largest data projects, enabling customers to adopt data products from both SAP and Google Cloud.

SAP has sold its stake in Qualtrics for $7.7 billion (£6.4 billion), after buying the company in 2018 for $8 billion.

The German software company sold its 423 million shares, a 71% stake, it announced this week as part of an acquisition of Qualtrics by technology investor consortium Silver Lake and the Canada Pension Plan Investment Board.

With a purchase price of $18.15 per share, this values the company at around $12.5 billion in total, SAP said. The number of customers using Qualtrics has risen from 10,000, when it was acquired by SAP, to 18,000.

"Since we acquired Qualtrics in 2019 the company has more than tripled its revenue while delivering profitability,” said Christian Klein, CEO and member of the executive board of SAP SE. “SAP intends to remain a close go-to-market and technology partner, servicing joint customers and continuing to contribute to Qualtrics' success."

The transaction is expected to close in the second half of 2023. The company will continue to be led by CEO Zig Serafin and remain headquartered in Provo, Utah and Seattle, Washington.

“We are incredibly excited to partner with the team at Silver Lake, who deeply understand our business and will help us continue to build a high-performing company, invest in our innovation, and expand our ecosystem to help our customers succeed,” said Serafin.

Ilona Hansen, Gartner vice president in the ITLTP Applications Group, told IT Pro the deal is a “win-win” situation for Qualtrics.

She suggested the firm will come even stronger into the market and more open to other business relationships they weren’t able to have before under the SAP umbrella.

Hansen said that Qualtrics was acquired under the leadership of former SAP CEO Bill McDermott. However, when he left in 2019, the strategy around what to do with the company wasn’t driven forward anymore.

Taking the company publis in 2020 was a 'clever idea', she said, it gave freedom back to Qualtrics. SAP was essentially saying it would support Qualtrics with this move, but not to expect it to rip or tear it apart, or even integrate it further into SAP’s offerings.

SAP acquired Qualtrics for $8 billion in November 2018, four days before it was meant to go public, with the company revealing at the time it had more than 9,000 businesses on its books across the world. SAP was aiming to boost its cloud offerings and integrate Qualtrics’ platform into its portfolio.

In July 2020, the German software firm decided to make Qualtrics public and announced it would retain a majority stake in it.

At the time, SAP said it would lower its ownership of Qualtrics from 100% but said it wasn’t planning on divesting or spinning off the firm.

SAP has announced the appointment of Ryan Poggi as managing director for the software giant’s UK and Ireland business, replacing the outgoing Michiel Verhoeven.

Reporting to the president of SAP EMEA north, Rohit Nagarajan, Poggi will lead the company’s UKI strategy and team of around 5,000 employees, placing a focus on driving customer value, and accelerating cloud growth, as well as the customer experience in the region.

No stranger to managing organisations and scaling high-performing teams across complex markets, Poggi has previously held various senior executive roles across EMEA and APJ regions since joining SAP in 2007 – including serving as COO of the UK and Ireland business.

He replaces Michiel Verhoeven, who is leaving the role after almost three years to become CEO at data automation platform provider Xceptor.

In an announcement, Rohit Nagarajan, president of EMEA north at SAP, said Poggi’s extensive experience in serving SAP customers made him an ideal replacement.

“We’re pleased to welcome Ryan back to the UK and Ireland,” he said. "He previously demonstrated his relevance and impact in serving the commitments of SAP’s customers, partners, and teams in this market.

“His solid expertise in the development of our cloud business, as well as his leadership skills, are all assets we need to consolidate the foundations of SAP UKI and maximise the opportunities ahead.”

Most recently, Poggi held the position of chief operating officer for SAP EMEA north, playing an instrumental role in launching SAP’s RISE enterprise resource planning (ERP) solution across five markets.

During that spell, he also acted as interim managing director for SAP France, where he is credited with helping transform the business into a singular team operating across all board areas.

It’s also not the first time Poggi has worked for SAP’s UK and Ireland unit. Previously, he served as chief operating officer for the business, responsible for overall readiness and execution of its growth strategy.

Additionally, his back catalogue of roles includes include managing director for SAP Philippines, director of global strategic initiatives, legal and commercial director, and has led multiple line of business (LoB) organisations across Asia and EMEA.

“I’m delighted to be taking on this role at a hugely exciting time for the UKI business,” said Poggi. “We are privileged to have some of the most innovative customers and one of the most dynamic partner ecosystems here in the UKI.

“The opportunity ahead of us cannot be overstated; to be the UKI’s most trusted technology partner, by coming together as one ecosystem and driving customer value.”

SAP has announced a partnership with IBM to offer services that help customers migrate their SAP workloads to the cloud.

SAP's deal with IBM builds on an existing initiative that SAP offered its customers called Rise with SAP. IBM is now offering an enhanced version to help companies move their SAP workloads to the cloud, called Breakthrough with IBM for Rise with SAP.

The program offers advisory, implementation, and application management services to S/4HANA users. This includes technical help with migration, along with strategic consulting. IBM emphasized the need to streamline workflows and optimize business operations as part of a cloud migration.

IBM offers services including rapid discovery and automated migration to S/4HANA from any source. It also offers templates for migration and test automation.

IBM will want to prioritize its own cloud for SAP migrations and, as such, SAP has also appointed IBM as a premium supplier of Rise with SAP. This makes it the first cloud partner to offer both technical services and cloud infrastructure as part of Rise with SAP.

IBM's cloud revenues have gradually risen as a proportion of its overall revenues and it has focused increasingly on this part of its business. Last month, it beat Q4 revenue expectations with its strongest growth in ten years, thanks in part to its cloud operations.

Last year the company split in two by spinning off its managed infrastructure services unit. This left it focused on cloud services consulting and global business services, its software portfolio (including Red Hat), and hybrid cloud, which included its mission-critical public cloud business.

SAP refocused heavily on its cloud business in 2020, with an expected growth in subscription-based services from its software.

In the third quarter of 2020, SAPinsider surveyed nearly 200 members of their community to learn what these businesses were focussing on as part of their transition to SAP S/4HANA, what was important to them, and what they were using for their on-premise and cloud data.

Over half of those surveyed expressed their intention for a consolidated integration strategy, however over a third admitted they didn’t have one company-wide approach, with many having as many as seven solutions.

This whitepaper shares a clear plan on how to prioritise solutions that will support all cloud migration, as well as data centralisation, and one that has both SAP and non-SAP solutions.

Provided by

Amazon Web Services (AWS) has won a contract to provide sports clothing brand Adidas with a cloud environment for hosting its SAP workloads.

German-based multinational Adidas AG also intends to develop a modern SAP S/4HANA platform using AWS, according to the deal.

By integrating SAP into its enterprise resource planning (ERP) system, Adidas aims to connect data across its global operations, while also tapping into AWS' SAP expertise to support advanced analytics, data science, and enterprise reporting, the company said in a release.

Utilizing AWS’ machine learning solutions, including Amazon SageMaker, Adidas’ data scientists can forecast seasonal demand for goods. This ensures the right product arrives at a warehouse or retail store at the right time, increasing customer satisfaction.

Through a cloud-based data lake on AWS, Adidas can also gain visibility into both internal and outbound operations, while AWS Sustainability programmes will also assist Adidas in reducing the environmental impact of its cloud operations.

Adidas said the deal will allow it to offer customers discounts and early access to new releases, priority services, and personalized offers.

“We want to drive innovation across our business, which includes everything from how we design our products to how we engage with the consumers who buy them. By committing to cloud infrastructure, we have the scalability and elasticity we need to handle the seasonality of our business during peak demand, and support the projected growth in our e-commerce business in the years to come,” explained Markus Rautert, senior vice president of technology enablement at Adidas AG.

“Deploying SAP environments on AWS isn’t just about transforming our technology—it’s about transforming business opportunities and using AWS’ wide range of cloud capabilities to create efficiencies and bring us closer to consumers,” he added.

SAP and Qualtrics have joined forces to streamline travel and expense management in hybrid workplaces.

Dubbed Concur Experience Optimizer, the jointly developed solution combines Qualtrics’ employee experience management platform with SAP’s Concur data.

Organizations can also capitalize on the expertise of SAP Concur Experience Management consultants, included within the platform, to implement continuous employee feedback loops.

“Our research shows that demand for business travel is returning to pre-pandemic levels, but getting the employee experience right is more nuanced and complicated than ever before,” said Jay Choi, chief product officer at Qualtrics.

Choi added, “It’s critical for organizations to understand how employees feel about the new world of travel and use that experience data to meet their evolving health and safety needs.”

Concur Experience Optimizer offers critical insights into employee buying decisions and organizational spending patterns, allowing early detection of potential saving opportunities and better coordination of policies and processes.

Businesses can also track employee sentiment with science-backed feedback templates and analyze the results with simple, intuitive dashboards that correlate sentiment with operational data metrics.

Additionally, the platform aids organizations in identifying risk factors in employee programs, preventing non-compliant and potentially fraudulent expenses.

“People are a company’s greatest asset, and it’s no secret that retaining employees has become even more critical,” said Mike Koetting, area lead of SAP Concur solution at SAP.

“A company’s travel and expense programs can directly impact an employee’s experience. Concur Experience Optimizer helps organizations understand the reasons behind employee behavior so they can make adjustments that are in line with both employee sentiment and business objectives.”

SAP has announced a new tool designed to help businesses quantify their carbon footprint at scale.

Dubbed SAP Product Footprint Management, the solution evaluates the environmental impact of a business' products, from the design phase through disposal. Powered by SAP’s Business Technology Platform, SAP Product Footprint Management also provides actionable insights into products and value chains.

By integrating production data with master information from business applications, the Product Footprint Management tool can compute the impact of various production scenarios on the environment.

Ultimately, SAP’s sustainability solution allows firms to estimate the carbon footprint of their products before they are manufactured. Businesses are also able to create and share reports on greenhouse gas emissions with business partners, regulators, and customers.

"Customers want it, the world needs it. There is no time to waste for businesses to act more responsibly and sustainably," said Thomas Saueressig, member of the executive board of SAP SE. "Sustainability goals are increasingly as important to business success as financial goals.

"When companies embed emissions data into underlying business processes, leaders can drive real change by making conscious decisions across the entire value chain. That is what scales the transition to low emission pathways, and SAP is uniquely positioned to drive this change throughout collaborative, intelligent and sustainable business networks."

Additionally, SAP Product Footprint Management allows businesses to import emission factors derived from internal lifecycle assessments (LCA) or from an external LCA provider.

"SAP has long had a strong, dedicated focus on its own sustainability operations," said Marta Muñoz, senior research director at IDC EME, commenting on the announcement. "The launch of the SAP Product Footprint Management solution, combined with the WBCSD's Pathfinder Project, represents a unique opportunity to bring together companies to jointly drive decarbonization across value chains and industries."

SAP will launch a secure UK-based cloud service and set up new offices in London and Manchester as part of a five-year investment package worth €250 million (approximately £212 million).

SAP UK Data Cloud, a new cloud infrastructure for the public sector, will combine the firm’s hyper-scale partnerships with AWS, Azure and Google Cloud with UK data centres to launch an in-nation cloud.

This will be designed to meet the tight regulatory needs of the public sector, while also supporting the UK’s critical national infrastructure in healthcare, transport, education, policing, utilities as well as central and local government operations.

Working with SAP National Security Services (NS2), SAP will ensure that all personal data is safeguarded and resides within the UK.

The capability to handle official sensitive data will go live in early 2020, with a host of SAP cloud services available at launch. These include SAP S/4HANA Cloud, SAP Success Factors, SAP Business Technology Platform and SAP Analytics Cloud.

It follows the company’s decision to go “all-in” on cloud computing in October last year. This announcement, however, saw the firm’s valuation drop by €25 billion (£27.8bn).

“The impact of this for public services can’t be overstated,” SAP said in an explainer on what its UK Data Cloud is and how it works.

“By modernising and transforming systems through cloud transformation, time after time we’ve seen services simplified, unnecessary costs removed and capacity created for staff, such as frontline workers, freed up to carry out crucial roles – without being waylaid by cumbersome and time-intensive administrative systems.

“In addition to driving significant efficiencies, harnessing public cloud with sensitive data will facilitate better insights, driving faster and improved decision making to transform citizen services.”

As part of the five-year investment, SAP will also open offices this year to accommodate flexible working arrangements and serve its widespread customer base.

There’ll also be a customer experience centre built into the new London offices, which will offer facilities for customers and partners to identify and pursue innovation opportunities with SAP. The facility near Manchester, which will be completed later this year, will allow SAP to work and engage more closely with companies around the country, the firm claims.

“It’s great to see SAP demonstrating its commitment to the UK and investing heavily to create new jobs and helping ensure long-term digital prosperity is evenly spread across the entire country,” said UK digital infrastructure minister, Matt Warman.

“Tech is at the heart of our plans to power Britain’s recovery full speed out of the pandemic and we are backing the sector with world-class infrastructure and skills training to make sure the UK is the best place to start and grow a digital business.”

By 2026, SAP additionally hopes to support an additional 250 interns through its internship programme, alongside plans to scale up its apprenticeship programme to grow the number of skilled workers across the industry.

SAP’s new long‐term ERP platform is moving to HANA, and existing SAP ERP customers should start planning today for their migration to SAP S/4HANA from their current R/3 or ECC solutions. IBM has a long history of supporting HANA on IBM Power Systems with high performance, scalability, and reliability.

In this report, read more about migration to SAP S/4HANA and why IBM Power Systems is an excellent choice.

NTT Corporation and SAP have extended their long-standing strategic alliance of over 30 years to create a holistic partnership.

Under the new agreement, both companies can assume the role of each other's customers, suppliers, and co-innovators.

“The deeper relationship enables SAP and NTT to leverage their best capabilities and expertise to deliver solutions that help companies transform into intelligent enterprises,” said SAP.

NTT plans to automate a series of operations and advance the group's management ability by standardizing business processes and enabling data-driven business execution. NTT aims to achieve this by adopting SAP’s enterprise resource planning (ERP) system S/4HANA and e-procurement cloud software Ariba solutions.

SAP, on the other hand, will leverage NTT’s offerings to provide enterprise solutions, such as infrastructure managed services, application development and consulting. Additionally, SAP will work with NTT to lower its operational costs by simplifying and enhancing SAP-acquired companies’ corporate network efficiency.

NTT and SAP’s strategic alliance also focuses on introducing a new era of digitally connected global value chains, resulting in a more unified and automated collaboration across customers, suppliers, retailers, manufacturers, and logistics providers.

By offering access to real-time data and analytics, NTT and SAP aim to help enterprises enhance agility and resiliency across the value chain. The companies plan to achieve this by developing applications that enable connected sites to track venue and equipment assets, enhance workforce safety and equipment reliability, and streamline business operations.

They also plan to develop a connected mobility offering to help track moving assets on the road for reliable logistics and secure transportation delivery.

Finally, SAP and NTT aim to improve traceability with a connected solution that enables end-to-end value chain visibility from the container-level to individual product items.

"By redefining our global partnership with SAP, we are taking a significant step toward realizing a wholly digitalized society," said Jun Sawada, president and CEO of NTT.

"It will allow us to collaborate further to create a better future. Having SAP as our strategic partner allows us to drive more innovations by combining NTT's global industry solutions, system integration, ICT infrastructures, multi-hybrid cloud capabilities, security and managed services with SAP's top-notch applications and technologies.

"Our joint go-to-market initiatives will also benefit both companies with optimized service offerings."

SAP is planning to retain a majority stake in the feedback and survey software firm Qualtrics when it makes the subsidiary public, the company has announced.

The data analytics company will be made public through an initial public offering (IPO) in the US less than two years after the German software giant purchased the firm in an $8 billion acquisition. SAP bought Qualtrics just four days before it was set to go public in late 2018.

The purchase arose after SAP sought to boost its cloud portfolio, integrating Qualtrics’ XM Platform, a system for managing core business information, into a single platform.

"SAP's primary objective for the IPO is to fortify Qualtrics' ability to capture its full market potential within Experience Management. This will help to increase Qualtrics' autonomy and enable it to expand its footprint both within SAP's customer base and beyond,” SAP said in a statement.

"Qualtrics, which is part of SAP's cloud portfolio, has operated with greater autonomy than other companies SAP had previously acquired. The founder Ryan Smith and the current management team of Qualtrics will continue to operate the company.”

SAP will trim its ownership of Qualtrics from 100%, although it plans to retain majority ownership of the company, and says it has no intention of spinning off or divesting this interest in the firm. The company’s founder Smith, in addition, plans to be Qualtrics’ largest individual shareholder.

CEO Christian Klein said SAP’s acquisition of Qualtrics has been a success, outperforming expectations with 2019 cloud growth of more than 40%, “demonstrating very strong performance in the current setup”.

Indeed, Qualtrics' revenue rose 34% year-on-year in the second quarter of 2020, according to SAP’s financial results, with the segment earning €168 million (roughly £153,000,000). Many perhaps would naturally question why a change in ownership arrangement is needed at this stage,

Klein added he alongside senior figures including Ryan Smith decided an IPO would provide the greatest chance for Qualtrics to grow its market, as well as explore its own recruitment and acquisition strategies.

SAP would remain Qualtrics most important R&D and go-to-market partner, in line with its continued majority stake in the subsidiary, while giving the company more autonomy to broaden its partner and customer ecosystem.

SAP announced that several of its own cloud-computing products don’t currently meet its stringent cyber security standards.

According to the company’s announcement, approximately 9% of SAP's 440,000 customers are affected by these shortcomings.

While there have been no known breaches or security incidents related to these shortcomings, currently affected products include SuccessFactors, Concur Technologies and Callidus Software. SAP has opted to update its security-related terms and conditions to meet its high standards. The company also stated that updates to its terms will remain in line with others in the market.

Further, SAP will proceed with remediation of the shortcomings against contractually agreed and statutory standards. The company expects to complete the remediation process in the second quarter of 2020 and cover the costs of the mediation within its 2020 financial outlook.

While SAP has yet to provide more details on the shortcomings, analysts claim this news could have an impact on its client base during the transition from on-site servers to off-site data centers.

“Events like this don’t help SAP’s reputation, and both existing and new customers of SAP will likely spend more time digging into SAP’s product security now,” Jefferies analyst Julian Serafini shared in a recent Reuter’s report.

SAP has spent lavishly on cloud-computing companies for the last decade. The company paid upward of $3 billion for SuccessFactors in 2012, more than $7 billion for Concur in 2014, and over $2 billion for Callidus in 2018.

When absorbing each company, SAP inherited its infrastructure and has since faced difficulty transitioning a number of its subsidiaries away from rival technologies.

SAP will part ways with its co-CEO, Jennifer Morgan, a matter of months after she took up the mantle alongside Christian Klein following the departure of former chief Bill McDermott last October.

The ERP software giant has restructured to adopt a ‘sole CEO model’, which means Morgan, who has been at the company in various capacities since 2004, has been squeezed out. The co-CEO will depart the company on 30 April.

The changes have come in light of “the current environment” which requires the company to take “swift, determined action” supported by a clear leadership structure.

“With unprecedented change within the world, it has become clear that now is the right time for the company to transition to a single CEO leading the business,” Morgan said.

“I would like to thank Hasso Plattner for the opportunity to co-lead this great company, and I wish Christian, the Executive Board, and SAP’s talented team much success as they drive the company forward.”

The decision to part ways with the SAP veteran comes amid the ongoing coronavirus pandemic, which is wreaking havoc in all sectors across the global economy, including major IT and tech companies.

The PC market experienced its sharpest decline since 2013, for example, in the first quarter of 2020. The crisis has also shut major deals, such as Xerox’s persistent efforts to buy out HP.

SAP, incidentally, has sustained growth in revenues and profits during the first quarter of 2020, suggesting the sudden move to restructure its leadership is precautionary. The strong showing is headlined by a 7% rise in revenue.

However, the company has conceded the decision to shift its leadership model has come “earlier than planned” as it needs to focus on ensuring continuity, and unambiguous decision-making, during the crisis.

“Throughout SAP’s transformation, Jennifer has always been laser-focused on customers, partners, shareholders and employees,” said sole CEO Christian Klein.

“It’s thanks to her that we have established a strong position in experience management solutions. I know she will always be a champion of SAP.”

Morgan joined SAP in 2004 and was appointed co-CEO with Klein in October 2019 when McDermott left. He now serves as the chief of the cloud software company ServiceNow.

Photo by Jolds777 / CC BY-SA

SAP has extended support for Business Suite 7 by two years, bowing to customer pressure.

The product was due to hit end of life in 2025, with the company firmly encouraging users to migrate to SAP S/4HANA. However, it announced this week that mainstream support will now continue until 2027, with extended support available until 2030.

Simultaneously, the business committed to providing maintenance for S/4 HANA until 2040.

Michael Kleinemeier, Member of the Executive Board for SAP Digital Business Services, said: “We are determined to make our customers successful. The extended commitment to SAP Business Suite 7 and the long-lasting support for SAP S/4HANA is at the core of this, providing our customers choice and flexibility in planning for the right path to the future.”

SAP Co-CEO Christian Klein added that there’s still a strong movement towards SAP S/4HANA among the majority of customers, citing a survey conducted by the Americas SAP User Group.

“[The survey] did not show a single customer not planning to migrate to SAP S/4HANA,” he said. “In addition, the German-Speaking User Group indicates in their lately published survey that customer investments in SAP S/4HANA are increasing significantly.”

The UK and Ireland SAP User Group welcomed the decision to extend support for Business Suite 7, describing it as a “welcome reprieve for end users struggling to plan huge migrations”.

The group’s chairman, Paul Cooper, said: “Back at our annual user conference in December, we highlighted how the end of life of Business Suite 7 (ERP/ECC 6.0) and lack of clarity around the roadmap for S/4HANA have not helped the customer relationship.

“For organisations that have invested heavily in Business Suite 7, today’s announcement will hopefully provide them with greater certainty and more time to plan a potential move to S/4HANA.”

Not everyone has welcomed the news, though. CEO of software firm IFS, Darren Roos, said: “While extending support to 2027 may provide the illusion of addressing customer concern, it doesn’t help them. It only delays the problem,” he said. “Even with a two-year extension, there simply aren’t the skills or resources available to migrate everyone by that deadline. For many customers, there still isn’t real, quantifiable value in S/4 HANA.

When Hillarys Blinds set out to complete an ambitious IT change programme in 2015, it had plenty of challenges it needed to overcome.

Customer support staff were bypassing the Nottingham-based retailer's slow CRM system and its ERP product from SAP was nearing the end of support. Meanwhile IT staff were skilled in HP-UX, a Unix-based operating system that had its start in 1984.

Head of ICT Julian Bond didn't just want to upgrade the retailer's technology, but move it ahead enough that Hillarys felt the benefit of focusing on long-term strategy, rather than gearing up for another IT overhaul in another couple of years. It needed to do all this without disrupting its day-to-day operations, which have seen it build a 200 million turnover from a 26% market share.

Three years on, and the company's transformation project has delivered a vast CRM performance upgrade, faster overnight data uploads and increased virtualisation, doing it all without moving its infrastructure to the cloud.

Moving to S/4 HANA

The catalyst for the change programme was the blunt fact that Hillarys was nearing the end of support for SAP's ERP product ECC 5.0. Instead of simply upgrading to ECC 6.0, Bond was considering a move to S/4 HANA, SAP's Business Suite running on HANA, the German vendor's speedy data-processing platform, to improve the performance of some of Hillarys' key applications.

"We wanted to move ourselves further up the curve to be more masters of our own destiny," Bond tells IT Pro. "When you constantly lag at the back of a pack, always bumping against [the fact that] your product is about to go outside of support, it doesn't give you the room to make the right strategic decisions - it's always 'I've got to do this quickly'."

Adopting HANA would not only move Hillarys to ECC 6.0 as part of the S/4 suite, but the blinds retailer could also take advantage of other HANA apps using the much more user-friendly Fiori interface.

Wider business challenges

Upgrading to HANA meant getting rid of Hillarys' longstanding Oracle relational database, which had been struggling to cope with query-intensive applications like CRM.

"In a worst case scenario the customer finished a call with us and we still hadn't found all the information we needed because it just took so long," admits Bond.

This led to staff finding workarounds outside of the CRM application, making it unreliable in terms of providing all the latest information on a customer.

But the in-memory data processing capabilities of HANA, coupled with its columnar structure, saw dramatic improvements in CRM queries, making them nearly instantaneous.

"It's absolutely changed the customer experience for people," Bond says.

HANA also brought benefits to Hillarys' ERP and data warehousing tasks. Before the move, the process of uploading data to Business Warehouse almost took Hillarys' entire overnight window to complete from 9pm when the contact centre closed to 7am when it opened again.

"That was always a hassle," Bond explains. "Just moving onto the HANA database we saved two-thirds of the time overnight it really opened up again that overnight window using the in-memory processing power of HANA and using it on a columnar database really allowed it to crunch the data that much more quickly."

The time saving has allowed Hillarys use its remaining overnight window to interrogate its data more closely and to line up email communications to customers.

"It's not just Business Warehouse that's benefitting; it's clearly sucking [the data] from the ERP system and that's also now on HANA, so together those have made a really demonstrable change," adds Bond.

On-premise still holds promise

Given the transformative nature of the project, why didn't Hillarys go the whole hog and host everything in the cloud?

While Bond believes any company in a similar position now has to at least consider cloud, for Hillarys the reality is the number of systems the wide-ranging change programme would touch meant it made more sense to keep the SAP environment in-house.

Nearly 100% of customer orders come through SAP's process integration module that links together various on-premise applications. Any problems moving any of these applications into the cloud could have had a knock-on effect on orders.

Additionally, SAP's cloud version of S/4 still doesn't contain the full functionality that Hillarys benefits from on-premise - in particular, a niche product that manages the complex process behind producing Hillarys' unique blinds.

But a chief factor was cost, Bond explains. In addition to the other issues, it was just as expensive to host S/4 in SAP's cloud as running it on-premise, if not more so.

"Maybe I'm old-fashioned, but I'm still looking for the cloud to deliver me a cost saving and when we ran our numbers, we were paying a premium for it," Bond says.

"Now that's partially because SAP in the cloud space was fairly new I think you were paying a premium for that but it certainly wasn't a no-brainer from a commercial point of view. If it had been, it might have overcome other factors that didn't go in its favour, but if you look overall there's enough question marks ... it doesn't tip you over the line."

Moving from Unix to Linux

Instead of hosting its SAP environment in the cloud, Hillarys installed SAP-approved Huawei servers at the expense of its longstanding HPE estate.

This necessitated another shift, from HPE's Unix-based operating system, HP-UX, which Hillarys had been running for 15 years, to Linux.

Bond explains the decision to move to Linux solved a skills issue for Hillarys.

"We had been finding it harder and harder to find skills in that area because these days people are growing up not having used Unix, only having used Linux, so we were finding it difficult to find people with [both] SAP and Unix skills."

He looked at Red Hat and SUSE's Linux implementations, but despite Red Hat's impressive number of global deployments, he eventually plumped for the latter after trying them both out, given its closer working relationship with SAP.

"It's not just the standard version that we're running, we're running SUSE Linux Enterprise for SAP Applications, so they've really worked with SAP to make sure it supports the SAP stack very well," Bond states.

The move to Linux also allowed Hillarys to make greater use of virtualisation with VMware, which he says is well-supported by SUSE Linux, but comparatively limited on HP-UX.

Hillarys didn't wait for the upgrade to complete in February 2016 to start reskilling its IT staff it started as soon as it made the decision.

"Running SAP systems is hard, so we started with some easy SUSE Linux general systems that let us get used to the interface," Bond explains. "[We said] 'let's get people certified then when we move onto the harder systems they will feel far more confident' you have to bring people on that journey."

Securing itself against hackers

While Hillarys chose to remain on-premise for its central ERP system, it did choose to host its website on Amazon Web Services.

But with 50%-60% of its sales leads coming online, Bond decided some extra security was necessary, opting to use Alert Logic's cyber threat detection platform to provide some extra visibility into its AWS infrastructure.

"If you ran the flag up the pole every time someone did a port scan on you, then the flag would never come down," contends Bond. "What Alert Logic has been good for is in being able to prioritise and quantify and make sure we're looking at the right things. That built-in intuitiveness absolutely has brought a benefit."

Hillarys achieved its IT transformation programme by carving it into lots of smaller projects, Bond says, but believes that winning his CEO's trust has helped generate the buy-in necessary to deliver such a long-term programme.

"In some ways it was a bit like that for our move to SAP on HANA," he says. "It looked like a whole pile of expense just to move us to a later version [but] it's yielded benefits for us, you absolutely see the payback not all of that could you quantify up front."

Now Bond is focused on exploring more of the benefits of being on HANA, as well as linking Hillarys' front-end web systems more tightly to its back-end capabilities to improve customer experience.

Having completed the project, especially without trusting its future to SAP's fortunes in hosting its own cloud service, Bond believes Hillarys is now well-positioned for the future.

"That leap right forwards to HANA meant that actually we're in the sweet spot and we've really got an opportunity to see [what happens] over the next five years," he says.

"Who knows how SAP is going to fare in that cloud world, but at least I'm not going to have to make any knee-jerk reactions to be supported, because I've moved myself that much further up the curve."

Main image credit: Bigstock

SAP is set to flesh out its Hybris suite through the acquisition of identity management firm Gigya, in a deal widely reported to be worth $350 million.

The exact terms of the deal have yet to be revealed, but it is thought that the identity access and management platform that US-based Gigya specialises in will be merged with SAP's customer profile suite, allowing Europe's largest software company to expand its e-commerce services.

"Gigya brings a wealth of skills and expertise that will significantly enhance the SAP Hybris Profile solution and allow us to take leadership of the emerging customer identity and access management market,"saidSAP Hybris president and cofounder Carsten Thoma.

"Consumer trust is the main currency to succeed for customer-driven organisations. This is what Gigya is known and recognised for."

Gigya, which has been a Hybris partner since 2013, serves 1.3 billion customers across sites that use its software to help manage customer identities and profiles.

Starting life in 2006 as a means for sites to manage customer profiles linked to Facebook accounts, Gigya has since expanded its services into the e-commerce industry, allowing companies to manage people's marketing preferences and providing a means for customers to give opt-in consent - something required under the EU's forthcoming General Data Protection Regulation (GDPR) legislation.

The deal will ultimately mean that SAP will be able to track where and how customers shop, whether it be online, in-store or through mobile apps, according to the company.

"Customers opt in and register via Gigya's registration-as-a-service, which addresses changing geographical privacy issues and manages compliance requirements such as the upcoming GDPR," the company said in a statement yesterday.

TechMarketView research director, Angela Eager,said: "Acting to boost identify management can only be a good thing, especially in the e-commerce area where the threat landscape is increasing and customer trust is vital for brands, of which Gigya has around 700 on its books.

"This tuck-in acquisition will increase SAP Hybris' credentials and send the message that investment in protection is ongoing."

Gigya currently has 300 employees, all of whom are thought to be making the move over to SAP once the deal closes later this year, pending regulatory approval.

"Combining the data matching and enrichment capabilities of SAP Hybris Profile with Gigya's consent-based identity data and access management platform will allow us to identify consumers across channels and offer a robust single consumer profile," said Patrick Salyer, CEO of Gigya.

"This is a vital step for digitalising businesses because companies need to be able to draw accurate conclusions seamlessly across all channels, including web, mobile, in-store or connected devices, and the Internet of Things, as well as collect data about consumer preferences."

HP and Deloitte have entered into a strategic agreement that will see the consultancy implement large-scale 3D printing systems in large-scale manufacturing environments.

Deloitte will help HP sell its Jet Fusion 3D Printing solutions, including hardware, software and expertise into its customers' businesses, which it believes will enable the manufacturing industry to generate more flexible supply chains, while also optimising the efficiency of their entire operation.

“The Fourth Industrial Revolution is upon us. No sector of the global economy is undergoing more radical transformation than the $12 trillion manufacturing market,” said Dion Weisler, president and CEO of HP.

“Companies investing in digital reinvention are poised to outpace their peers. Building on our disruptive 3D printing technology, together with Deloitte we are focused on helping customers transform and win in this new era.”

Deloitte believes that by offering HP's 3D printing offerings to clients, it will be able to transform organisations, boosting production speed and uncovering new markets for distribution worldwide. The consultancy believes it could lead to a new global industrial revolution.

“The digitalisation of global manufacturing operations and practices will impact companies and consumers around the world, and 3D printing will play an important role in fundamentally changing manufacturing as we know it,” said Deloitte global CEO Punit Renjen.

“This alliance comprises two exceptional brands and brings together HP’s leading 3D printing platform with Deloitte’s digital manufacturing experience and global client reach.”

The partnership will begin across the US, but will roll out to other territories in the future. The businesses will also work with SAP to grow distribution profiles across the world.

“As a long-standing partner of both Deloitte and HP, we are pleased to see the synergy of their unique strengths combined to drive worldwide adoption of 3D printing across industries,” said Dr. Tanja Rueckert, SAP SE's president of IoT and digital supply chain.

“HP’s disruptive Multi Jet Fusion 3D printing technology, Deloitte’s manufacturing domain expertise and SAP’s global, cloud-based manufacturing business network help to deliver the power, speed and quality of the distributed manufacturing digital transformation today."

Workday has appointed ex-SAP executive Gonzalo Benedit as president of EMEA and APJ, helping to grow the ERP firm's presence across the regions, strategising to build a solid go-to-market strategy.

Much of Benedit's work history was spent in international roles for SAP, including management positions for the company's Latin America, Central America and Mexico and EMEA regions. His most recent role was as COO of SAP's EMEA business, where he focused on sales, services and operations, as well as building the company's go-to-market strategy and enhancing the customer experience of Workday’s suite of products.

Before joining SAP, Benedit worked at various management consulting and finance organisations and has qualifications in finance and business economics from the Universidad Torcuato Di Tella.

“I am very excited to be joining Workday at such a critical time in our development,” Benedit said. "In my early days in the role, it’s very clear to me that Workday is delivering on its commitment to bring the customer focus back to the enterprise.

"It is unheard of to see a 95%+ customer satisfaction rating year over year, along with such an engaged and happy customer community, and that’s what Workday is doing. I am focused on continuing this success and on bringing more great customers into the Workday community.”

He replaces Chano Fernandez, who was recently appointed executive vice president, global field operations at Workday. Benedit will be based in Workday's French HQ in Paris.

Against a backdrop of multi-million dollar legal battles with high profile customers, SAP is trying to reassure its vast user base that it doesn't hold a grudge.

It's doing that by addressing an issue at the heart of its litigation - indirect licensing.

As systems become more interconnected, it's increasingly common for an ERP system to touch not just other aspects of an organisation's infrastructure, but third-party systems too, whether that's another firm's or a customer's device.

That's roughly the situation UK firm Diageo found itself in this year when SAP took it to court, demanding $54 million in damages for all the licenses Diageo hadn't bought for customers and staff accessing data via third-party applications that hooked into SAP's ERP and database software.

Diageo lost that case, though the damages are still to be decided. An even bigger $600 million compensation claim against Stella Artois brewer Anheuser-Busch InBev is underway - Anheuser allegedly allowed indirect and direct access without user licenses.

This left many of SAP's other 350,000 customers feeling uneasy. A poll conducted by the ITAM Review of its SAP Special Interest Group members found that indirect access was the greatest concern for 32% of respondents.

Then SAP announced a change in licensing to assuage these worries: instead of relying on a user license model by default, earlier this month the ERP giant introduced a different method of licensing - an order-based model.

For customers who use ECC or S/4 HANA, procure-to-pay and order-to-cash scenarios will both be order-based.

That means if you're buying new stock from a supplier (procure-to-pay), or a customer orders something from your website (order-to-cash), it's the order that will be priced, not the multiple touchpoints from a user to your S/4 HANA system.

Hala Zeine, SAP's head of commercialisation strategy, tells IT Pro the new model is better for both customers and SAP in transaction scenarios.

"How many orders we process to the customer is directly related to the value," she says. "The more we process, the faster we do it, the less time customers need to [spend on] this. This is all done real-time so this is much more valuable than looking at how many users touched the system as you go through these processes."

Indirect Static Reads (passive reads) - accessing customer data that was in SAP's database to read it (not to process it or to action a real-time system query) - will also be included in a customer's existing software license.

SAP's indirect access amnesty

The new order-based approach might resemble an olive branch for customers fearful of SAP audits in light of the lawsuits: it comes with a promise that SAP won't demand "back maintenance" as long as users disclose indirect access use cases going forward.

"Customers who feel like maybe they're partially licensed or that this is raising awareness of a topic, they can come to us," says Zeine. "We're saying in a very empathetic way, [let's] not discuss anything about back maintenance or when did this start or why haven't you licensed in the past, let's look forward together and get your license directly under the new measure, and convert whatever you've maybe partially licensed into this new way."

Those customers who are already fully licensed don't have to do anything, and customers who approach SAP about being "under-licensed" won't be hit by lawsuits for back maintenance, in other words.

Despite the ongoing legal cases, SAP appears to accept customer criticism that its licensing can be opaque and complex.

"We're really interested in pursuing and continuing great relationships [with our customers] and we understand that making our pricing more predictable more consistent, more clear, is definitely going to help in that endeavour," Zeine explains.

But how big a change is this?

"I was at CEO Bill McDermott's keynote at Sapphire Now [SAP's annual conference] when he made his two announcements regarding licensing," says Julian Bond, head of ICT at Hillarys, a blinds company that's a longtime SAP customer, and one that recently implemented S/4 HANA.

"I can only think that this is the first part of SAP's change rather than the totality of it. Let me illustrate - we use SAP's CRM system to manage our customer service. We don't use it for processing sales orders (as we have a key enterprise app for that). So would the cost for this now be zero? I don't think so."

For Duncan Jones, principal analyst at Forrester, "it's not a huge change". "There was already a per sales order option for EDI [electronic data interchange] and e-commerce integration. Passive read was never 'use', so that's not a change, merely SAP belatedly admitting what should have been obvious."

This passive read use case is the most common one because e-commerce and PoS systems often need to check prices and inventory in real-time, and Jones contends that purchase orders are "mostly batch integration", therefore they don't require user licenses.

But the UK & Ireland User Group welcomes the "clarity" around these processes, which it said had caused consternation among its members. Chairman Paul Cooper says: "Broadly speaking, moving from a named user [model] to [a] business metric-based model for certain scenarios should make life simpler for most customers."

Running too simple?

But the binary nature of SAP's existing metrics could prove too basic for some of its customers' complicated use cases, especially as firms move into the cloud.

Previously, the user group has focused on members' concern over whether SAP's licensing models will keep pace with how they use the vendor's products as they adopt cloud and Internet of Things (IoT) technologies, a reality that potentially opens up an ERP system to entirely new connections between other devices and third-parties.

Bond argues that the either/or approach of SAP's new licensing could be too simple to address this.

"We seem to have moved from one extreme to the other - from massively complex and unwieldy to something that is potentially too one-dimensional," he says. "SAP is struggling to continue with 'user' as a proxy for the unit of business value derived from its technology. Change is necessary to accommodate the move to cloud computing, but its fairness will depend much more on how SAP decides to implement rather than just user-based vs order-based characteristics."

But SAP's Zeine recognises that there is still a long road ahead to figure out how licensing can better reflect new ways in which SAP's technology is used.

"We know we have still some other concerns to work through and we are very committed to doing that," she tells IT Pro.

"On the IoT scenarios that relate to order, which is the majority of the time ... that will be taken care of with this new adjustment," she claims. "We do have the devices which just tell you 'hello, I'm here' every single morning without doing anything else, and so we're hopeful that in the next months we would be able to come to a new one [license model], but I like to work very closely with our customers on this."

So, will SAP's customers feel reassured?

"Regarding IoT, I don't know what SAP could do to restore customer confidence," states Forrester's Jones. "Unless you are a giant company, you would have to be very brave to use SAP for IoT, based on its 'too little, too late' response to this scandal."

But SAP's changes signal that it's starting to listen to its customers' concerns and is working to address them.

While the user group acknowledges that there's a long way still to go, it's optimistic about SAP's apparent shift in attitude as demonstrated by last month's licensing changes, arguing that transparency and communication with customers will be key to reassuring them.

Its chairman, Cooper, says: "Licensing is an incredibly complex topic, so it will be imperative that SAP provides as much information and education to customers as possible, with working examples that customers can clearly understand."

While Jones argues that SAP should sack "rogue salespeople" who haggle pricing - rather than the product experts who know how customers want to use it - the user group says SAP must work to make sure its frontline sales staff understand the licensing changes and can communicate them properly to users.

"SAP also needs to ensure that account managers are fully educated regarding this, so they can work with customers and articulate the right way to proceed," Cooper says.

Hillary's Bond adds: "SAP needs to streamline its licensing to match the realities of cloud computing, but it's too early to say whether this will be a positive change for customers. How drastic the change is to customers will entirely depend on what fairness and finesse SAP applies to the transition."

SAP has made a formal announcement around its pricing and licensing structure, which instead of penalising those using indirect methods to access data gleaned from the SAP system, will include Indirect Static Read as part of the software license fee.

"We recognise that traditional approaches to business are being replaced by newer, more transparent, modern ways of thinking and acting," Hala Zeine, SAP's corporate development officer said in a blog post. "Which is why we are committed to modernising our pricing approach."

She explained that the read-only data is the company's data, not SAP's, or any other third party that may have been used to extract that data. Therefore, it should be made accessible without a huge charge. The company said taking this step is an industry first.

The company also said that anyone concerned they have, in the past, been under-licensing, would not be punished for doing so.

"SAP assures customers who proactively engage with SAP to resolve such under-licensing of SAP software that we will not collect back maintenance payments for such under-licensing," Zeine added.

She added that the company won't over-charge those who wish to switch their licensing agreement, instead, providing them with the tools they need to make their business work, including offering credit for already licensed products so they can update the metrics.

SAP added it would be basing pricing model for the Procure-to-Pay and Order-to-Cash options on orders, because basing it on a measurable outcome for businesses reflects modern practices.

"Customers that want to win in a modern, digital world need a partner that is willing to reimagine their own processes to drive success in a digital economy," Zeine explained. "What I can assure every customer is that at SAP with the unwavering support of CEO Bill McDermott and every SAP employee is that your voice matters."

SAP is seeking more than $600 million in compensation from Hoegaarden brewer Anheuser-Busch InBev, weeks after successfully suing a British firm.

The tech giant accused the Belgian company, which also makes Budweiser and Stella Artois, of accessing its systems directly and indirectly without appropriate user licenses, and has commenced arbitration.

Anheuser said it will "vigorously" defend itself against the claims, which started in February and were revealed in the brewer's March US Securities and Exchange Commission filing.

"The statement of claim asserts multiple breaches of a 30 September 2010 Software License Agreement (together with related amendments and ancillary documents, the "SLA") based on allegations that company employees used SAP systems and data - directly and indirectly - without appropriate licenses, and that the company underpaid fees due under the SLA," the filing read.

SAP has not yet commented on the claims, but it comes shortly after the ERP giant won an indirect licensing High Court battle against British firm Diageo, against which it is seeking $54 million in compensation.

Diageo had contended that SAP PI was a "gatekeeper" licence providing access to SAP's ERP applications suite and its database, but the judge rejected the UK company's argument.

SAP had provided its services to Diageo from 2004 with pricing per named user. However, when in 2012 the firm implemented two third-party systems that hooked into SAP PI, a software engine, it broke this licence, the High Court found.

Diageo Connect, a system allowing customers to order online through a Salesforce system connecting to SAP PI, and Diageo Gen2, enabling staff to pull up customer data from an Oracle database associated with SAP's ERP software via a Salesforce app, both required additional licences that Diageo did not obtain.

"The recent SAP indirect access spat with Diageo with 60 million quoted in the legal proceedings looks like small beer, excuse the pun, compared to the Anheuser-Busch case," Martin Thompson, head of Campaign for Clear Licensing, told IT Pro.

"This is further evidence that SAP are clearly desperate for revenue at any cost, even it means suing their very largest customers."

What does this mean for SAP customers?

Customer concern around SAP's licensing tactics is growing, according to the latest SAP special interest group meeting minutes from the ITAM Review. And the advent of new technologies like the IoT means indirect access is likely to become more and more likely as more devices and services link up to a business's core IT systems.

On the one hand, SAP has sought to reassure customers, with its head of commercialisation strategy last year telling IT Pro that it aims for "a good policy" where customers "know what's coming at them", but on the other hand it is pursuing heavy compensation claims from major customers.

"[SAP's approach] certainly is alienating customers," Duncan Jones, principal analyst at Forrester Research, told IT Pro. "I can't speak about this particular case [Anheuser], but I have seen other claims from SAP that have been out of all proportion to what could be considered fair.

"I'd urge courts to consider 'what would the two parties have agreed had SAP made clear at the time, and the customer had understood and accepted that "use" means what SAP now claims it means?'"

While the Anheuser case is yet to reach court, the High Court judge did not rule entirely in SAP's favour, disagreeing with the company's demand that 'named user' status be extended to Diageo's customers who accessed the system.

Jones said it was unlikely that Diageo's SAP account director would have forced it to pay the full price for this indirect use.

"The SAP salesperson would obviously have included the relevant access within the deal, at minimal extra cost," he claimed. "He'd have sold them the 'sales & service order processing' module, or sold them a special user category, or given them a 98% discount on the additional user licenses - but no way would have increased his price by 100X, nor would he have told the client to implement SAP without integrating it with other systems."

Picture: Bigstock

Customers are concerned that, as SAP ramps up investment in new technologies like the Internet of Things (IoT), licensing will not keep pace with technical innovation.

The firm, whose history is rooted in back office resource planning software and databases, has spent the last few years encouraging its customers to adopt more from its growing cloud portfolio.

These have typically been its line-of-business applications, like Ariba or SuccessFactors, while more recently the focus has been on S/4 HANA; a suite of ERP tools that run on HANA, SAP's incredibly fast data-processing platform.

While the vast majority of SAP's 4,100 S/4 customers are currently on-premise, the potential of the technology is huge: thousands of devices (whatever they are) pinging the system if a product is ordered, ensuring the company's stock quantities are updated in real-time.

SAP's HANA Cloud Platform will underpin future IoT services, too, while its Asset Intelligence Network will act as a cloud platform for companies to collaborate together on the IoT.

Hala Zeine, SAP's senior vice-president of portfolio, gave an example of a connected fridge on stage at Connect 2016, the UK & Ireland SAP User Group's rebranded annual conference, last week.

In that example, a faulty fridge would ping its manufacturer with the exact details of the fault, prompting an automatic call out for an engineer equipped to fix the issue on-site.

The scenario was a neat illustration of the everyday potential of the IoT, but prompted the user group to ask who would pay the licensing fee: the manufacturer of the fridge, or the owner of the system it connects to?

"If that fridge has a sensor in it which talks to the backend system to say 'I've run out of fluid', then is that who's consuming that data [who is charged], or where's it being consumed?" Philip Adams, chairman of the UK & Ireland SAP User Group, said to IT Pro.

"Most of the usage in SAP tends to be user-based but they do have other metrics around revenue generation or data flows or processing power."

The issue of indirect usage

Zeine's example also raises the spectre of indirect usage, which becomes an increasingly prevalent issue in the world of IoT, where your internal and external IT systems connect not only with each other, but with third-parties' systems too.

"You've got users logging onto your SAP system, they're inputting data into that SAP system, and there's a connection to another system where you have another set of users of a third-party product consuming the data that originally generated in SAP," explained Adams.

"They're processing that data ... and as a result that's opening a level of exposure [where] the people using the third-party product don't have a license to use [SAP]."

Murky policies governing such uses of SAP could either put users off adopting new products, or see them get stung in an audit years after adopting an IoT product, the user group fears.

SAP's Zeine said she wants licensing for modern usages to be both clear and simple, saying: "Sometimes things will happen that nobody's ever thought of, so we have to react and it's very important to keep pace and that licensing keeps pace with the change.

"[There's] a very important path where I will drive my pricing team to say it has to be simple to understand, easy to consume, but yet is exactly what the customer needs."

But when IT Pro asked her who would pay the license fee in her fridge example, she said she couldn't reveal the pricing.

A lack of transparency

In the information vacuum, customers fall back on memories of haggling with their account managers over pricing, or recall licensing practices that the user group believes are not fit for purpose in a cloud and IoT world.

"They are one of the most complex and difficult companies to deal with," Julian Bond, head of ICT for Hillarys, a company that makes and sells blinds, told IT Pro. "Their licensing is impenetrable," he added, claiming that when conversations with product representatives turn to pricing, SAP refers customers to their account managers.

One example of a lack of transparency the user group brings up is SAP's audits, when it provides customers with a tool, called LAW 2, to understand their licensing usage.

Adams said LAW 2 doesn't give them the raw usage data in a format they can understand, meaning customers know they're in the clear if they don't hear back from SAP, but are still left in the dark about aspects of their usage.

An SAP spokesperson told IT Pro: "It's important to highlight that it's a customer's obligation to ensure that they use our software within their license entitlement. The audit should assist our customers in understanding and managing their license assets, and we work closely with our customers to help them do so given the sensitive nature of this process."

They added that customers can run Basic License Audits at any time, with many running one quarterly to stay on top of their usage, as well as a self-certification element for licensing that cannot be recorded automatically.

An Enhanced License Audit sees SAP visit a customer to validate additional license usage scenarios that it can't collect automatically, with the auditor discussing these fully with the customer.

Licensing direction

But Hillarys' Bond believes customers should also receive guidance about SAP's future licensing policies.

"Your customers need a licensing roadmap as well as your technology roadmap," he told IT Pro. "SAP needs to come from never talking about it to at least having some conversations about it." He believes Zeine is trying to do that, by holding higher level discussions with customers than at the account level.

"I normally say a good policy is one that is going to allow for predictability, for the customers so they know what's coming at them," Zeine told IT Pro

"From a policy point of view, we provide software, the software has value, we license against that value ... We do adhere to the fact that we want it to be predictable for them, and we also are in it for the long run for customers, be it large or small."

Still, it's unclear whether usage-based licensing models will cut it when interconnected devices and systems enable connections a customer might not envisage when buying the product, or a vendor might not predict when building it.

The question remains how SAP will address the issue. Martin Thompson, of the Campaign for Clear Licensing, believes that SAP might define pricing depending on each company's usage, leaving customers with no universal guidance on how much they could pay.

"IoT-enabled devices with connectivity to SAP is a great example of innovation in IT, but SAP contracts and license definitions are typically archaic and predate modern technology," he told IT Pro. "This means SAP will commonly 'settle' usage or connectivity of its IP with new technology for a fee on a case-by-case basis with customers. This means license metrics still remain undefined."

SAP's UK & Ireland MD, Cormac Watters, says the company has a number of "engaging, practical" conversations with customers about licensing regularly.

"It is all about usage actually, because as you rightly say there's opportunities to use our software in many interesting and varied ways that weren't there 10 years ago," he told IT Pro.

"We try to proactively go talk about it and try to work out what's the right type of use to capture in a license agreement. I always think of it in types of use so if you're using the IP, what kind of license use do you need?"

Core principles vs customer blueprints

However, the User Group's chairman, Adams, thinks customers would prefer a set of "core principles" governing usage, rather than blueprints defining different types of customers.

"There's so many different scenarios and you can't define them all," he said. "Products will change, customers' situations will change, but if 10 or 15 core principles were there it should be loose enough to provide the background to something, you could take the principles and apply the particulars."

Bond, head of ICT at Hillarys, agrees. "The old rules have moved and we haven't yet worked out what the new rules are. Whatever new incarnation they come up with, it will work for someone and not another," he said.

What counts as fair?

Both customers and SAP want to come up with pricing models that are a fair reflection of SAP's IP, and of customers' use of that IP.

The complicated question is whether they can come up with a method of pricing that both parties are satisfied with.

Customers want a set of guaranteed principles governing pricing as base level guidance, so they can adopt a tool with confidence that it will not result in a punitive audit down the line.

SAP, though, must account for a wide variety of different usages among its extensive customer base, hence its desire to come up with customer blueprints.

The vendor is already holding some discussions with customers over licensing; now customers want SAP to be more transparent about licensing roadmaps, too.

Bond believes Zeine is a catalyst for this kind of change, but that this open approach goes against the grain of SAP's usual behaviour.

"Hala is absolutely trying to do some of that, but she's the only person in 10 years that I've ever found," he said.

Zeine clearly grasps the nature of the problem, telling IT Pro: "What happens over time, because this area [of the IoT] is moving so quickly, [is] you have areas that are licensed separately and the question is how do you make it in a way that is more meaningful for customers?"

That's SAP's challenge as it tries to bring its customers along with it into the world of connected devices.

The sunny Italian countryside rattles by at 350km an hour, but it's not the speeds alone that make Trenitalia's Frecciarossa trains impressive it's the hundreds of sensors beaming 5,000 data points a second into the cloud.

Trenitalia is working with SAP to harvest and process that data to completely reimagine train maintenance. At the moment, trains are pulled off the rails for a check-up after a certain number of kilometres or a set amount of time not unlike taking your car in for an MOT.

That takes trains out of service even when they don't have a fault, costing Trenitalia unnecessarily. By slapping sensors onto every measurable component or part from the engine to the passenger Wi-Fi the Italian train firm hopes to not only be able to switch to maintenance when necessary, rather than at a set time, but to predict problems and fix them before they start. "It's a new way to approach maintenance, better understand the business and intervene when necessary," said Barbara Morgante, CEO of Trenitalia.

It's the Internet of Things (IoT) for trains, and Trenitalia believes the Dynamic Maintenance Management System (DMMS) as it's been jauntily named could slash its maintenance bill by 8% to 10%, and also reduce investment in spare stock, lead to fewer delay pay outs to customers and fewer financial penalties being imposed on service contracts.

The aim of the project wasn't only to save cash, but also to end train delays from maintenance issues. "It's about the experience of customers not only cost saving, though that's a nice side effect," said Tanja Rueckert, executive vice president of digital assets and IoT at SAP.

And that's key as more transportation competition pops up, from Uber to self-driving cars, alongside existing rivals. "Therefore we need a special focus on efficiency, which is not only to save money, which is of course very important, but we have to be better than others in giving a good service to the customer," Morgante said. "They have to choose us because we're better than others."

When it comes to preventing delays, the aim is to find faults before they occur, allowing for interventions only when needed and for better planning, hopefully leading to fewer transport interruptions. "We want to use prediction, we want to use Big Data to foresee a possible breach or damage in a part or component in rolling stock," added Danilo Gismondi, CIO of Trenitalia, jostling to stay up between the rows of seats in the train as it hurtles around bends in the Italian countryside.

How it works

Hundreds of sensors collect data in real time from braking systems to the toilets, the batteries to the sliding doors, shoving it up into SAP's cloud every ten minutes. That's no small thing, given Trenitalia runs 8,000 trains a day with using a fleet of 30,000 locomotives, coaches and freight cars.

Once in the cloud, it's monitored and analysed using SAP Predictive Maintenance and Service software and processed by the predictive analytics tool SAP HANA. That lets the company build predictive models for machine learning and also trigger maintenance and other actions when engine temperature hits a particular threshold, for example to help keep trains running without delays.

The team showed off some of the data being generated on the Frecciarossa train we took from Rome to Pietrarsa and back again, revealing visualisations of engine temperature, speed and other key metrics, but there are also other diagnostic and management data accessible by engineers, such as how many trains are out of service, alerts needing maintenance action, and the status of trains on the track, including the number of passengers all in real time. "It's not about less maintenance," Gismondi said. "But better maintenance."

By the time the Dynamic Maintenance Management System is fully up and running across all of Trenitalia's rolling stock in 2018, it will be generating a full petabyte of data annually. Next, Trenitalia is hoping to automate the few remaining parts of diagnostics and maintenance that can't be spotted by sensors, such as the roof and undercarriage of the trains, which still need a visual inspection. "In the future, cameras will do it," said Marco Caposciutti, Trenitalia's CTO.

While the DMMS implementation won't be fully finished until 2018, it's already rolling out on the superfast Frecciarossa stock. Getting to this point took three years of work, with a full year spent on software and platform discovery alone.

Making IoT work

The Trenitalia project with SAP worked because the pair behaved like partners and had buy-in from the very top of both companies, but Wallis added that it's also important to start by speaking to those who will be using the systems before implementation. "It's absolutely key to get them in," she said. "And when we talk to customers it's also really key to talk to the real people who use the software. Not some surrogate or substitute, but the real business people who really use the software, because if you don't satisfy them, that means that you don't win their hearts, you don't win their minds. You might sell the software for the first 100 users, the first 1,000, but there will be no follow-up because you're either irrelevant or boring, or it's just the wrong thing."

In the Trenitalia case, that approach worked because the aim of the project was to improve the work of maintenance staff and engineers not to make their jobs redundant. "Most people go to work every day, most people, and want to do really good things," Wallis said. "A good day means different things to different people for the maintenance technicians and for the engineers, having a good day at work means also less boredom."

Instead of repeatedly checking over trains that are functioning perfectly, their job is now to respond to actual problems. "All of a sudden, as a technician I become more relevant," Walls said. "Because I've worked on a real concrete problem that's there."

Fixing real problems

SAP is keen to ensure the Internet of Things is taken seriously after all, it just pledged to invest 2 billion over the next four years into research, acquisitions and its own labs to push the area forward. That includes a pair of acquisitions already; enterprise IoT provider PLAT.ONE and engineering analysis firm Fedem Technology.

SAP CEO Bill McDermott said his firm made the investment "because that's what our customers need us to do."

He added: "This probably the biggest growth opportunity for not just us but for you, and it's something we have to focus on quickly, because that's where your competitive advantage will be."

Indeed, SAP believes connecting industry and analysing the data it creates is the next wave of the industrial revolution, what Rueckert describes as having mass individualisation at lower costs, prediction rather than reaction, autonomous production and on-demand manufacturing.

That shift to the next industrial revolution is why SAP's "packages" are designed to help companies leap more easily into the IoT have been dubbed "Industry 4.0".

Those include the "jump-start package", which is targeted at monitoring equipment and shop-floor operations, and the "accelerator package", which adds manufacturing analytics. A third "Industry 4.0" package will be the "advanced" offering, which will add predictive analysis and machine learning, with further solutions addressing cities, agriculture and energy, the company said.

Such packages will help companies dip their toes into the IoT data stream, and it's a wise move to start small, said Elvira Wallis, senior vice president for IoT smart connected business at SAP. "Start really small and with something where you will have a quick show of benefits," she told IT Pro. That's a smarter tactic, she said, than planning a massive overhaul of your methods that will take years to implement.

"By the time you've finished the bloody strategy paper, the world has moved on and your competitors have embraced IoT, have made experiences, have done the learning," she added. "They're using it already and you're still in your ivory tower devising the perfect strategy that will never come to fruition because you're out innovated."

For example, SAP has had major corporations ask to connect and track a handful of devices just to prove it works. "We need to prove to them we can do it for 25 [parts or components]," she said. "They will not believe us we can do it for a million if we can't do the first 25." With the first few Frecciarossa trains churning out data, Trenitalia sounds convinced - we'll have to wait and see if it reduces customer delays, but if so, hopefully British rail firms take a look at the Internet of Trains, too.

ThreatConnect's ecurity analysis platform is now powered by SAP HANA, providing better insights and faster response times for organisations.

SAP HANA allows data to be collected and analysed, sending actionable insights to team members who can then act upon the information to ensure they are suitably protected against threats.

ThreatConnect said the move reflects a shift in the security market, which now relies upon a single platform for intelligence-driven defence. By pooling resources and threat intelligence from a number of sources, ThreatConnect enables organisations to make the most of the insights they extract from their security investments, it claimed.

"All organisations share several similar and critical cybersecurity challenges," said ThreatConnect CEO Adam Vincent.

"With the latest iteration of our platform, built on SAP HANA, SOC teams can considerably increase computing speed and analytic performance.

He added: "Couple that with simplifying their technology stack and noticeably reducing multiple layers of hardware as well as software complexity and the results are a team that is efficient and effective in reducing threats to an organisation."

ThreatConnect powered by SAP HANA supports the ingestion of structured, unstructured and streaming data, ensuring all inputs are analysed equally, providing insight for decision makers in almost real time.

Faster response times mean threats can be countered or avoided more quickly, enabling better overall security management.

SAP has announced PartnerEdge Cloud Choice, a scheme developed to accelerate its partners' cloud services, enabling them to maximise profits.

The programme will motivate partners who have traditionally only offered on-premise solutions to grow their cloud and deliver digital solutions to aid businesses grow.

PartnerEdge Cloud Choice will remove some of the risk involved with offering a new product, SAP said, helping partners concentrate on boosting cloud adoption across the organisation and throughout the customer landscape.

Because of the cloud's nature, it will also offer a more long-term revenue stream, rather than on-premise hardware that only offers revenues for the lifetime of the equipment.

SAP is allowing its partners to choose their commitment to the cloud with a range of profit options. Whether they have extensive expertise and resources, or limited offerings, there will be something for everyone, SAP explained.

The model and profit option will make it easier for partners to move from offering on-premise only solutions to cloud environments, allowing them to leave aspects such as contracting, invoicing and collections to SAP, rather than having to manage it themselves. This means they can better concentrate on growing the business, not managing the admin, which can take a lot of time and resource away from sales.

“We are 100 per cent committed to working with our partners in the cloud space,” said Rodolpho Cardenuto, president of Global Channels & General Business, SAP.

“That’s why we are taking a cloud-first approach. It removes the guesswork and immediately gives partners the opportunity to earn a revenue share on contracts, as well as over the life of the relationship. As a key cloud player, SAP must rely on our network of partners to tap into this expanding market and help our mutual customers succeed on the path to digital transformation.”

SAP has failed to listen to its customers for too long, according to its CEO, who has committed "heart and soul" to hearing what they have to say.

Bill McDermott offered his email address for unhappy users to contact him after using the company's annual conference in Orlando, SAP Sapphire Now, to admit it has not done a good enough job of addressing customer needs.

Speaking about a recent meeting with CIOs, McDermott said: "They told me basically we weren't empathetic enough, we just weren't listening, we weren't hearing their problems in their terms on a consistent enough basis."

He pledged to put things right starting at the conference, sharing roadmaps for key products and learning more about customers' own IT journeys.

"We have to know more about your business, we have to care more about your business," McDermott said. "Everything is an imperfect situation but if the heart and the soul is totally committed to the customer and the customer's customer, you know we'll get it right."

The CEO concluded by giving out his email for dissatisfied customers to share their grievances with him, saying: "If you're not feeling the love, and what happens in Sapphire doesn't happen back at your city, your country, your location with your business, bill.mcdermott@SAP.com, I want to hear from you."

Customers welcomed the belated admission, though organisations like the UK & Ireland SAP User Group have maintained for years that SAP must do more to work with customers.

Chairman Philip Adams told IT Pro: "It is encouraging to hear that SAP has acknowledged that it hasn't listened well enough to its customers.

"We have said for a quite a while, that if customers are to fully realise the benefits of SAP's product portfolio they need to understand the company's roadmap and strategy. Without this clarity, it is difficult for organisations to build an attractive business case to adopt SAP's latest innovations."

A study this month from the user group found that customers are confused about SAP's cloud strategy, with one-third of 100 respondents saying they did not know what the HANA Cloud Platform is.

Meanwhile, 60 per cent accused SAP of not communicating the benefits of its cloud products well enough, while nearly half said they did not understand how SAP's line-of-business cloud acquisitions, like SuccessFactors, Ariba, Fieldglass and Concur, fit into its strategy.

The user group's vice-chairman, Paul Cooper, said: "The thing for me is as a customer is yes I want to hear the vendor talking about it and where it's going and what it will do for me, but then I also want to hear from the user about the difficulties and the good points and when they realise the benefits. It's the customer journey that people want to hear about."

McDermott made it clear that he understood these concerns on stage this week, saying: "That big picture vision [of SAP's strategy] is powerful but it only becomes really when we make it real for you."

Under his leadership, SAP is beginning to address this by opening up the roadmap for a key product, S/4 HANA, its ERP software suite.

The on-premise and cloud product has proved very successful since its launch last year, collecting 3,200 customers, but McDermott admitted it had shot "a little fast out of the gates" before SAP had fully outlined its development roadmap.

As a result, SAP launched a Value Assurance Guarantee for S/4 yesterday, designed to help companies implement S/4 by giving them a roadmap for software and data migration.

In addition, SAP will assign a technical account manager to guide people through the implementation, while SAP partners like Wipro, Accenture, Ernst & Young and Deloitte are also signed up to the value assurance agreement.

McDermott told IT Pro in a separate discussion: "I don't think we were simple enough in the way we reported the roadmap and actually took people through a Lego approach you know, level one, two, three, and four to get to the finish line. We were talking like an engineering company and we were moving fast."

Ray Wang, analyst and founder of Constellation Research, told IT Pro the renewed focus on customers' concerns was part of SAP's plans to move more towards adopting its HANA Cloud Platform and other cloud products.

"SAP is trying to do a better job of listening," he said. "It's trying to move its customer base into the digital age and part one is to move them to the cloud. Part two is HANA Cloud Platform."

The platform lets users extend SAP applications into the cloud by working with partners to develop them to suit their specific needs.

For instance, users can now use the platform to extend S/4, working with partners to add functionality and deliver it to tablets and smartphones.

HCM tool SuccessFactors also got an extension package in HANA Cloud Platform this week, speeding up the process of integrating it with other business processes and apps built on the platform.

A new service on the platform dubbed SAP API Business Hub, currently in beta, helps businesses with that process of integrating various applications by letting users search for available business services and publish new business services, providing APIs for them all.

Once more customers have gone through the process of digital transformation, McDermott wants to offer more cutting-edge services to them in the next decade, such as AI and machine learning.

"Machine learning, AI, augmented reality. That's our wheelhouse because intelligent applications will fundamentally change the way you do work in the enterprise and the way you collaborate with your training partners outside the enterprise," he said.

For an example of how that works now, COO Christian Klein demonstrated a product called the Digital Boardroom to show how big data can create insights that inform decisions.

Taking data from the S/4 platform, it also pulls in data from external sources, such as analyst predictions and stock market information, crunching it all in SAP's Cloud for Analytics.

Constellation Research's Wang said such innovations will help customers get on board with SAP's digital agenda, saying: "Customers need to see SAP as innovative and the digital boardroom demo helped."

The UK and Ireland User Group encouraged members to try and influence SAP's roadmap by joining the company's Customer Connection Program.

"With SAP's product portfolio constantly evolving it is important that customers provide input to ensure their business requirements are being met," said chairman Adams.

SAP customers will soon be able to run its HANA cloud platform on Microsoft Azure, as the two tech giants expand their long-running partnership.

Users will be able to run development, test, and production workloads in SAP's HANA, sitting on Microsoft's cloud infrastructure.

The latest partnership builds on SAP and Microsoft's agreement two years ago to let customers access various SAP applications such as Business Suite, Mobile Platform, and the SAP HANA platform through Azure.

While HANA already runs on Amazon Web Services (AWS), Microsoft and SAP claim that Azure will support customers' "largest and most demanding production workloads" on the HANA in-memory database, which was first released in 2010 to process data more quickly.

Microsoft CEO Satya Nadella said the latest partnership with SAP will help accelerate customers' businesses.

Speaking at the SAP Sapphire Now conference in Orlando, he told attendees: "We've taken the best of SAP and the best of our hyperscale cloud and brought it together. It means SAP applications are certified on Azure.

"SAP S/4 HANA is certified on Azure, SAP HANA is certified on Azure. That is just a fantastic capability for you to be able to run your dev test workloads and your production workloads."

He also pitched Azure's standing as a global cloud provider, with datacentres across the world, as a benefit for those who choose to host HANA with Microsoft, allowing them to expand their services abroad.

"We run an instance in China so many of you operate global businesses you want to be able to run in China we enable that. We run this hyperscale cloud in Germany so you can now take advantage of that," Nadella added.

SAP CEO Bill McDermott on stage with Microsoft CEO Satya Nadella

Analyst Ray Wang, founder of Constellation Research, told IT Pro that for Microsoft, the partnership is about making Azure an indispensable part of people's cloud infrastructure.

"Microsoft wants to ensure that Office 365 and Azure are part of everyone's landscape in the cloud," he said.

For SAP, the partnership allows it to leverage Microsoft's hardware to spread its software's reach, Wang added, saying: "The key thing to realise is that SAP won't be building out datacentres like Microsoft so SAP brings the apps and workloads. Microsoft has the compute power and global cloud," he said.

SAP CEO, Bill McDermott, said: "The certification of Microsoft Azure's infrastructure services for SAP HANA along with the new integration between Microsoft Office 365 and cloud solutions from SAP are emblematic of this major paradigm shift for the enterprise."

IT Pro has asked SAP when HANA-on-Azure will become available.

SAP integrates cloud apps with Office 365

The firms also announced integrations between their cloud software, specifically Microsoft's productivity suite Office 365 and SAP's line-of-business cloud tools.

Concur, SAP Fieldglass, SAP SuccessFactors, and SAP Ariba now integrate directly with Office 365, the aim being to simplify things for customers who use tools from both vendors.

Expense management tool Concur will be able to access Office 365 documents, calendar, and other data, for example.

Nadella said: "You [can] take the combination of your cloud collaboration and communication software and your line of business software, because the work gets done at the seams between these two. Now we have that seamless integration, and I think that's fantastic."

The tie-up between SAP and Microsoft comes hot on the heels of a deal between SAP and Apple announced last week, in which the tech giants plan to let developers build B2B apps for the iPhone and iPad powered by SAP's HANA Cloud Platform.

In that deal, SAP's user interface software, Fiori, will also be combined with iOS to create a new coding language in order to help developers produce apps that are easy to use.

With Microsoft, SAP announced that developers building custom Fiori apps on the HANA cloud can choose to have those apps managed, deployed and protected by Microsoft Intune, its mobile device management software.

SAP's new integration with Office 365 should be available in the third quarter of 2016.

SAP has updates HANA to enable organisations to extend their data synchronisation from the enterprise to remote locations that sit on the edge of the network.

HANA Service Pack 10 (SP10) means organisations can build IoT and data-intensive apps to utilise the information gleaned from areas outside the core business using the SQL Anywhere suite. The data that these apps generate can then be used to help perform critical tasks remotely while workers are either offline or online.

This addition will work together with existing functionality that allows businesses to integrate their systems with the latest Hadoop distributions from Cloudera and Hortonworks, according to SAP. However, new additions in SP10 also allow for faster data transfer with Spark SQL, a single user interface for SAP HANA and Hadoop cluster administration, plus rules-based data movement.

Another new feature in SP10 focuses on high availability and disaster recovery capabilities, helping to prepare organisations to prepare for the critical demands for always-on applications.

Carl Olofson, research vice president of application development and deployment at IDC Research said: "High availability and disaster recovery are some of the most critical requirements for any enterprise-level IT landscape with datacentres.

"The importance of ensuring reliability and certainty that IT operations will continue in the event of a failure cannot be understated. SAP HANA has been designed to provide a solid foundation that facilitates business continuity across the enterprise and reduces the risk of security breaches."

Quentin Clark, SAP's CTO, concluded: "SAP HANA gives customers one integrated platform for transactional and analytic workloads. The new capabilities of SAP HANA ensure datacentre-readiness, synchronization data to any remote system, extend high availability and disaster recovery of enterprise data and perform advanced analytics. We are readying our customers for the inevitable digitisation of our entire economy."

Junior coders are botching SAP customisations, increasing the cost to companies running the software.

This is according to Cast Software, which examined millions of lines of Abap (advanced business application programming) code written to customise 83 SAP applications.

Chief scientist Bill Curtis told IT Pro that most of these customisations were performed by outsourcers, including SAP partners that are responsible for implementing the German tech giant's software.

But he accused them of being inexperienced and bungling the job.

"You've got people who just don't know how to write good information management routines," he said. "You wonder how many of them really have a computer science background or at least an IT background."

The consequences for the customer are severe, he warned increasing the total cost of ownership because the complexity of the code is costlier to maintain.

It also makes it harder to add new functionality to the applications, meaning businesses upgrade their software at a slower rate.

"If they're in a very competitive environment, that puts companies at a disadvantage. The agility of a business is directly tied to the agility of their code," Curtis said.

The report found evidence of faulty code across several industries, including public sector, energy, IT consulting, manufacturing and retail.

It said: "The number and density of violations is high in every health factor, and this should be of concern for many applications."

Many of the applications Cast tested were business-critical systems, it added.

Curtis recommended companies introduce targets that outsourcers must meet when customising their applications, as well as quality assurance processes, to reduce the amount of complexity added to the software.

"Create a quality gate for everything that's coming back from your suppliers and set targets in your contract equivalent of service level agreements," he said.

"Say these are numbers I expect you to hit, and this is the rate at which I want to see improvement towards these targets', and measure the code as it comes in."

An overwhelming 93 per cent of SAP customers are struggling to optimise their IT landscape, preventing them from upgrading to the tech giant's HANA cloud architecture.

This is according to a survey of 120 SAP users by the UK & Ireland SAP User Group, which found 60 per cent blamed a lack of budget, and 53 per cent a lack of time, for failing to optimise their SAP kit.

But respondents also cited a dearth of knowledge and skills as a barrier to optimising, and user group vice chairman Paul Cooper told IT Pro that SAP could do more to help customers understand its products.

"The landscape has got more complex and there's always more SAP can do to support that thirst for knowledge among users," he said. "SAP needs to come back on some issues to re-educate people."

Ten per cent of users said they have already moved to HANA, SAP's in-memory database and cloud platform, 22 per cent claim they're planning to move in the next three years, and 31 per cent plan to move after three years.

Meanwhile, two out of three respondents said they plan to deploy a hybrid infrastructure by 2018.

However, 47 per cent admitted customisations to their existing landscape have slowed their progress in adopting newer SAP technologies. "People have a legacy of customisation from the late 90s and 2000s," Cooper told IT Pro. "It's definitely not a surprise.

"Getting control of where your data's going within your system and how it's secured will give you a much more straightforward [upgrade] project."

While the majority of respondents said they looked to SAP partners to help them optimise, 91 per cent stated SAP could better communicate the services it offers to help them upgrade.

Three-quarters have used SAP Solution Manager in the past three years, but 45 per cent were unaware of the German tech giant's Expert Guided Implementation service. This service offers workshops with SAP service engineers to help people get the most out of Solution Manager, suggesting many currently underuse the tool.

"Getting more PR out there about these things would help," Cooper said.

S/4HANA

SAP yesterday revealed it's taking a hit on profits to boost its cloud revenues, reporting 129 per cent growth in this division of its business.

But 72 per cent of respondents admitted they didn't know if S/4HANA, SAP's overhaul of Business Suite that runs on HANA cloud, would help them "run simpler".

The product has picked up 370 users since its February launch, but Cooper said: "While this [doubt] is understandable considering it is a recently launched product, it highlights a knowledge gap that will need filling. As SAP's product offerings continue to evolve, users need to understand how they will impact on their business."

He told IT Pro that firms want customer use cases to spell out the benefits others have got from new products before they consider deploying such technology.

Cormac Watters, MD of SAP UK & Ireland, said: "We are working closely with the user group to provide details of the SAP Service and Support portfolio in a way that it is accessible and easy use, and are focused on simplifying our offering to further aid the customer journey."

The user group is running a symposium designed to give customers the chance to hear from SAP experts and customers who are using some of the latest technology.

The event, called Optimising your SAP Landscape, takes place in London on 28 April more details can be found here.

Data analytics has become an increasingly important area for UK startups, with companies using the technology to blur the lines between channels across various industries, SAP's chief technology advisor Mark Darbyshire told IT Pro.

Ahead of the SAP Startup Forum event taking place in London on Wednesday, Darbyshire outlined the importance of in-depth analytics for UK startups looking to gain insight into end users, speaking about the shift in attitude among businesses in terms of when to start using analytics.

"Traditionally, analytics has been kind of a day two' solution... and maybe that's fine if you know exactly what you're doing," he said.

"If you look how IT traditionally ran a business, it was an electronic copy of what we did with people. If you start with analytics, you might end up with an entirely different approach to how you run your business. Increasingly people are taking a bit more of an analytics first' approach."

Talking specifically about SAP's HANA platform, Darbyshire pointed to the increasing ease of analytics when combined into one platform, making it easier to consume, share and make use of in a business sense.

"What's nice about SAP is that you can use the same technology, HANA, to run the business, operate the business and analyse the business," he continued.

"If I'm running the business and I'm using the same system to look at the business, I can make decisions very quickly and get insights very quickly about customers."

Amy Lai, founder and CEO of retail insights mobile app Wittos, told IT Pro about using analytics to create a "dynamic Wi-Fi captive portal experience" that can create targeted content and services using data collected at internet hotspots. This, she said, gives retail stores a new advantage.

"We're used to this kind of monitoring when we're looking through a website, with the website telling us and guiding us through the different content zones.

"We get a lot of communication from a website, but in a local space it should be no different. You've made a conscious decision to walk through the door of a retail store, so when you're in the store you expect to have a curated experience as well."

Warwick Analytics' Dan Somers working in predictive analytics for the manufacturing industry also spoke to IT Pro at the event, noting that retail and the financial services have been the quickest to take up analytics as a business tool, along with manufacturing.

He said: "There is so much opportunity in manufacturing because the products are becoming so complex... it's really being able to harness and pull this together to get insight and predictions.

"We underestimate the human factor in all of this. There will be smart people making smart decisions, and I think that eventually things will reach a new equilibrium," added Somers.

"I think across pretty much all industries, analytics is becoming increasingly important," Darbyshire added, "and I don't think anyone can really stand up and say, analytics isn't important to us.'"

SAP wants to work more closely with customers to help them adopt its technology at their own pace, after criticism that its sales executives are "ignorant" about users' needs.

The German database giant was accused by its UK & Ireland User Group of flogging products to users without heeding their individual technology requirements, and has committed to better staff training and more user engagement to fix this.

A user group study of 117 SAP customers found that 51 per cent say their account executive does not know enough about their business IT needs.

Meanwhile, three-quarters of them told the user group they want to adopt the latest technology much faster than their organisations are able to, but are hampered by a variety of issues that SAP needs to understand.

The biggest challenges faced by firms include lacking a business case for new products, cited by 71 per cent, licensing/subscription costs, mentioned by 69 per cent, and migration and implementation costs, a problem for 54 per cent of those surveyed.

Around 40 per cent said they need to get more value from their existing SAP investments before considering another purchase order.

But after speaking with customers at the annual User Group Conference in Birmingham this week, IT Pro learned that account executives continue to push the latest products from SAP, regardless of customers' individual challenges and technology needs.

Pushy SAP?

Andy Dalton, SAP technical manager at water company United Utilities, says he can see various use cases for the tech giant's in-memory database and cloud platform HANA, but his business simply is not ready to make another investment at the moment.

However, he says: "SAP feel a bit pushy, pushing customers towards HANA, understandably, but if customers have only just invested in other products they have been pushing two years back, then it does take some time to evolve.

"We've got a lot to do before then, we've got to focus on our IT costs. We need to get into a leaner position really before we think about pushing everything out to a service."

Mark Darbyshire, SAP's new chief technology adviser for the UK and Ireland, claims SAP does recognise the time it takes organisations to adopt their latest products.

But he accepts SAP could tell customers specifically how software will benefit their own business, rather than how it is generally beneficial.

"It's more about sitting down and talking with the customers and less about saying 'here's some technology'. I guess we could be doing more about showing why that might be relevant to their business today," he admits.

"If you are a UK telco, what does [UI app] Fiori mean to you? Well, it might be a way of you offering a platform to SMBs so they can build small applications. Explaining it in those terms rather than saying 'currently user experiences aren't very good and this is a way round it' is much more helpful."

A study by the user group earlier this year certainly suggests that something needs to change.

Despite sales executives' best efforts, just 15 per cent of more than 100 SAP users struggling with big data planned to use data-processing platform HANA to help them, it found.

User group chief executive Craig Dale said at the time businesses needed more customer stories around implementing HANA.

This sentiment is echoed by Peter Wells, SAP deliver manager at recruitment firm SThree.

He wants to deploy mobile working solutions, such as mobile management tool SAP Afaria, and even has a business case in enabling young recruiters in their twenties to use their own devices as an incentive to stay longer, preventing employee churn.

"I'm used to hearing the sales pitches now about what the vision is and it all sounds great," he says, but adds: "I'm very interested in talking to customers who've done it."

User group chairman Philip Adams believes SAP must do more to make experts, and customer stories, available.

"It's about getting people into customer organisations and helping them," he claims. "Please give us the experts that can provide the knowledge our members want to hear."

Account execs hold the key

Those aforementioned sales executives could act as access points to that information, Adams adds.

"If they don't have the answers themselves they can certainly be a point of contact for you as a customer. If they can't get those answers then what's their relevance?" he asks.

SAP's Darbyshire is clear on the benefits of SAP's HANA-based technologies, but is keen for users to adopt them on their own terms.

"We would like them to move to it ultimately, but at a pace that's comfortable to them. I wouldn't like to think that we're trying to push it down their throats as technology for technology's sake," he explains.

"You've got to consume technology at your own pace."

Figures revealed at the conference show that 4,100 customers now use the HANA platform, with 7,100 startups developing solutions on it.

And Darbyshire warns that, while customers' technology roadmaps will always be at the mercy of budgets and other factors, they must be prepared to adapt in a fast-changing technology market, saying "adaptability is very important".

United Utilities' Dalton says his company is doing this by changing the way technology deployments are managed.

"In the past SAP has been very much IT-led in our organisation, and very slow to react and understand the drivers," he explains.

"So 12 months ago we established a SAP centre of expertise, and that's to help us move away from major programme deliveries."

He says that large change has been a blocker for smaller change, which gets firms where they want to be more quickly, and avoids large investments that slow innovation and drain IT budgets.

"The intention is to break those major changes up such that we have continuous improvement. Change is small so it stops being a blocker," he concludes.

Promote policies better

Another point raised by the user group is that SAP should promote their own methods of helping custopmers adopt newer technology more widely.

New UK MD, Cormac Watters, walked on stage at the conference on Monday to admit that he hadn't known about SAP's cloud extension policy, which allows customers to switch on-premise licenses for cloud subscriptions free of charge, until he joined the company in October.

He said: "I felt a little bit dumb, but it's not my fault, it's actually SAP's fault for not telling me."

Whether or not that's true, the user group study backs up his own experience, finding that just 10 per cent have used the policy, and 23 per cent found it attractive.

Adams hopes SAP will communicate better with users so they understand what their options are, especially as many are already paying for technology they do not use under enterprise license agreements.

He says: "People just aren't aware of the services, they're not aware of the policies, they're not aware of the good things SAP is doing.

"Getting your customers to use [your technology] is bound to create a win-win situation for both parties and help everyone along that road [towards] adoption of new technology and getting value from what you currently have. We're all paying for them. "

The extent of the challenge to SAP is to a large extent a marketing one. The innovations the German database giant is coming up with are exciting, but customers require more access to experts and other users to justify buying them.

In other cases, they simply need to be made more aware of what is currently on offer under their enterprise license agreements something that sales executives hoping to earn a commission may not be so eager to point out.

Picture: SAP UK&I COO Guy Armstrong (left) with new UK&I MD Cormac Watters

SAP UK and Ireland User Group has notched some big successes in the last 12 months under chairman Philip Adams.

The user group - along with its European counterparts - has persuaded SAP to make Fiori and Screen Personas available for free under software licenses, warned the German tech giant not to abandon on-premise in its quest for cloud supremacy and pushed it on the issue of parking licenses.

The availability of Fiori, a collection of user friendly applications that provide a common interface for various business functions, goes a long way to helping address complaints about the complexity of SAP products' UI.

And while the issue of being able to park licenses - where users could stop payments for a time when they do not use the software - drags on, the user group has a new person to speak to in the shape of SAP's latest UK & Ireland MD, Cormac Watters.

IT Pro spoke with Philip Adams on the above subjects and more at this year's SAP UK & Ireland User Group Conference in Birmingham.

You sat down with Watters on his second day as UK managing director. What do you think of him?

Obviously he has first hand experience of being a customer [as COO of DCC Technology, where Watters was responsible for implementing SAP software].

The fact he did meet us the second day into his job, the fact he's here today and the fact he does have an understanding of how our members feel with his customer background is all very good. Certainly we welcome the fact that he's come from a customer background and wants to have a level of engagement [with customers].

How do you think he should balance getting new customers and supporting current customers?

He fully realises sales are important, but get the sales and at the same time customer satisfaction: customer connection and working with customers is equally important. He has a tough job on his hands to balance both, but I really do hope he's given the space and the time to do it over the next number of years. It would be great to see him around.

Has the role of UK MD been an unstable one in the last few years? Watters is the fourth appointment since 2009.

It was Tim Noble and then Steve Winters stepped in for six months [in 2011] and then Tim came back [in 2012] and you could sort of say there were three MDs in four or five years. Tim, then Steve, then Tim and now Cormac.

There's been quite a few if you go back 10 years. There's been five or six. The development's driven from Germany. At the end of the day the regional businesses are sales organisations so it's probably down to [sales] numbers.

In your keynote you stressed the importance for users of getting more out of their license agreements. Does SAP have a problem letting customers know about its products?

That's what I wanted to get out of the keynote, you do need to tell about your customers and incentivise your account managers.

Those guys need to know an awful lot more than how to sell you software. People just aren't aware of the services, they're not aware of the policies, they're not aware of the good things SAP is doing. Getting your customers to use [your technology] is bound to create a win-win situation for both parties and help everyone along that road [to] adoption of new technology and getting value from what you currently have. We're all paying for them.

One example is the cloud extension policy, which lets on-premise users swap license agreements for subscriptions when they migrate to the cloud. More than a year after it was created, you found adoption is still low at 10 per cent.

Well, 23 per cent have said the cloud and on-premise extension policies are attractive. They're ready to adopt and move to the cloud. They can't go again and ask for more money form their CFO if they've spent some already, and if you want to move to, say, SuccessFactors, they can recognise the investment they've already made.

Ironically, [new MD Watters' old employer] DCC weren't members of the user group and that first meeting we had with him he was alluding to things SAP has been doing that we know we've communicated to our members.

If he had have been a member he'd have known about those things. Like the cloud extension policy, he didn't know about it. And that's been about out for nearly 12 months or more.

Last year you felt SAP was ignoring on-premise in its push to the cloud - do you feel that's something that has improved?

It's less of a concern this year. I feel they've decided or realised that you can't force everyone into the cloud. Some people still won't do it because of security concerns or other reasons and SAP have realised it might be a hybrid approach.

Although they're a cloud company and want to encourage us to all move to the cloud, they will continue to develop on-premise software because there's no point in turning business away, they're not that stupid.

Every solution they develop from now on will be a cloud solution, whether they continue to work on-premise, time will tell.

Another success has been the free release of Fiori. But you found that 41 per cent of users aren't aware of the pre-requisites for installing Fiori. Could you talk about those potential barriers?

Even though you don't pay a license fee anymore, Fiori will still cost you money to put it in place. You have to implement it, so you have to go and get a partner, or it can cost you time if your own team's doing it. Naturally there has to be a level of concern around the take up. There's barriers but it's of interest.

You have to have HANA to have the full value of Fiori. These Fiori are mobile apps essentially, and there's an analytical element to it and if you're not running on [in-memory database] HANA you won't get the value. Not a lot of customers know that.

SAP releases are all now based on HANA. Is the company slowly forcing people onto the platform?

Covertly. It will just be a natural progression that customers will realise they don't need to move tomorrow, but why wouldn't you if you can get more value out of it? If there's a business justification to do it, then why wouldn't you do it?

But we often say if you're not a huge organisation with a massive footprint of SAP and speed and big data aren't a concern then why move to HANA?

I think they've realised that and that's why every product they release now is based on a HANA platform. You don't have to be there straight away, but it's not going to be a question of if you move to HANA, it's going to be when.

Lastly, the issue of parking licenses is still rumbling on. Have you hit a brick wall there?

We're not going to give up on licenses, we still see it as a big topic globally. But it is a global issue, there's very little we can do locally on this. We want that flexibility. We're not expecting software for free, but parking is a valid thing to do when organisations change in size, these economic growth cycles and business cycles do happen and it would be sad to think your business is put in threat because you can't afford the maintenance fee.

But there are tips and tricks around it that we as a user group do when agreeing a commercial contract with SAP around 'don't bundle them all together, keep them separate' and so forth so you can at least not pay one contract. We'll keep the pressure on those aspects but you need to pick the battles you can win and keep a bit of pressure on the rest.