SAP Watch

Jul 24 2013   2:41PM GMT

SAP announces new policy change to ease cloud migration

Todd Morrison Todd Morrison Profile: Todd Morrison

SAP today announced a policy change designed to make it easier for companies to move portions of their on-premises environments to SAP cloud applications..

“This is a way for us to enable our customers to access our cloud solutions in an easier way,” said Augusto Abbarchi, global head of maintenance and premium engagements at SAP. “We know our customers have made big investments in our on-premises platforms. Sometimes this represents a barrier for our customers in investing in our cloud solutions.  ”

With the change, existing SAP customers can “reallocate” portions of their on-premises deployments to the SAP cloud version of the same software, the company said in the announcement released this morning. Customers can apply part of their current license and maintenance fees to the cloud subscription.  The policy change applies to SAP’s Ariba and SuccessFactors cloud applications as well. 

SAP declined to specify how much customers could expect to save in on-premises licensing and support, saying only that it depends on the customer and factors including the size of deployment.

The program assumes that customers will not only be migrating a portion of their SAP environment to the cloud, but expanding on it as well. 

In short, it means customers will be paying more overall, but that benefits in the form of newer technology and the lower total cost of ownership associated with on-demand software will be worth the added cost, according to SAP. “The value we can add with the cloud solutions is higher compared with higher fees paid to SAP,” Abbarchi said. 

Customers can also transition at their own pace, noted Rob Addy, an analyst with Stamford, Conn.-based research firm Gartner Inc.

“The ability to migrate to the cloud on an incremental basis means that SAP customers can make the transition at a pace that suits them, thereby lowering the migration-related risk and helping them to make the change,” Addy said.

In a short video provided by SAP, analyst Joshua Greenbaum said the program is a response to customers who may otherwise feel trapped by limited options for migrating to the cloud. 

“SAP is saying this is a complex marketplace where customers are going to need a lot of flexibility,” said Greenbaum, president of Enterprise Applica­tions Consulting, based in Berkeley, Calif.

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