SAP Extends Next-Generation ERP Set Into The Cloud

SAP unveiled a cloud edition of its S/4HANA ERP application set Wednesday, providing a cloud option for the S/4HANA software that just launched in February.

The company, which is holding its Sapphire Now conference in Orlando, Fla., this week, also debuted a version of its SAP HANA Cloud Platform targeting Internet-of-Things applications.

S/4HANA, officially "SAP Business Suite 4 SAP HANA," was launched in early February as the next generation of SAP's flagship ERP applications, replacing the company's longtime flagship SAP Business Suite portfolio based on its R/3 technology. HANA is the company's in-memory computing platform that's been available since 2010 and has become the foundation for all of SAP's product development.

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Solution providers can resell the on-premise version of S/4HANA, but SAP will sell the S/4HANA Cloud Edition directly to customers. The opportunities for partners around the S/4HANA cloud service are providing implementation, configuration and support services. For resellers, the emphasis will be on Business All-in-One on HANA, a version of S/4HANA that's based on S/4 HANA code, but prepackaged for midmarket businesses with vertical industry customizations and other content.

In a Sapphire Now keynote Wednesday, Bernd Leukert, the SAP executive board member who is responsible for product development and innovation, touted the capabilities of S/4HANA and the new cloud version.

"S/4HANA is breaking down the barriers between existing departments and making so much more use of the data that already resides in the system," Leukert said. "It is the enabler for the transformation, the reinvention of your existing business. It is designed for data-driven businesses."

S/4HANA Cloud Edition adds the option of deploying the S/4HANA software through a cloud subscription model. The cloud package provides the core S/4 HANA applications, including finance, accounting, controlling, procurement, sales, manufacturing, plant maintenance, project system and product life-cycle management.

Beyond those apps, the cloud edition of S/4HANA offers connections to SAP's other cloud applications, including the SuccessFactors human capital management, Ariba procurement, Hybris marketing, Fieldglass vendor management, Concur travel expense management and Jam social media applications.

The new cloud edition also makes it possible for customers to deploy the application set in a hybrid cloud/on-premise environment. It supports multi-tenancy, but Leukert said SAP would host the software in a private cloud configuration if customers want it.

SAP will offer a range of packaged migration, system conversion, guided configuration and deployment services to speed up S/4HANA Cloud Edition adoption.

The new SAP HANA Cloud Platform for the IoT includes a range of data and application services that help businesses work with data collected through networks of connected devices. Some were already built into HANA, including predictive analytics, telematics and geo-location capabilities, while other IoT services are new, including device management, IoT messaging and IoT application enablement.

SAP also said it's creating a range of services to support the development, deployment and operation of IoT applications that work with SAP HANA Cloud Platform for the IoT. The vendor, for example, for a limited time is offering free access to the SAP SQL Anywhere suite of lightweight embeddable databases for devices.

SAP already markets a portfolio of IoT applications, including SAP Connected Assets and SAP Connected Logistics, and the cloud edition of SAP Predictive Maintenance and Service -- all of which leverage the SAP HANA Cloud Platform for the IoT.

SAP plans to provide quarterly updates of S/4HANA Cloud Edition applications. Customers also can use the underlying SAP HANA Cloud Platform to extend the applications and integrate non-SAP software.

Tata Consulting Services, a major SAP partner, has seen increased interest in SAP's cloud offerings from its customers in the last year, said Akhilesh Tiwari, the global head of TCS' SAP practice, in an interview. While cloud adoption of ERP applications tend to lag that of other types of applications, Tiwari said that's changing. As businesses' hardware systems reach the end of their life cycles, they are increasingly moving to either privately hosted cloud services or cloud computing products offered by SAP or TCS, Tiwari said.

TCS also is seeing from customers what Tiwari described as "an increased degree of interest in HANA for advanced planning and optimization applications." Overall, TCS' SAP practice is growing at a 30 percent rate, he said.

Some 370 customers have begun implementing S/4HANA since its Feb. 3 introduction. According to Rodolpho Cardenuto, head of SAP's Global Partner Organization, 47 percent of those S/4HANA deals have been made to midmarket customers through channel partners.

"It's the fastest-growing product we have in our history," he told an assembly of some 800 partners prior to the start of Sapphire Now. "The momentum is with S/4 HANA."

Several SAP partners attending Sapphire said in interviews that, while they are seeing early interest in S/4 HANA, it would probably be later this year before sales of the software begin to ramp up.

"We expect that, by the end of this year, [S/4HANA] is going to be part of our core offerings," said Arthur Colombo, senior vice president with Answerthink, a leading SAP solution provider partner. "That's something we're going to be easing into in the next six months, maybe nine."

SAP developers also are building connections between HANA and Hadoop, the big data platform, with availability expected in the second half of this year, Leukert said.