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Coming back from a couple of events like SAPPHIRE, Success Connect, and the Cloud World Forum, we would like to share what we have learned from customers, partners and other cloud experts.  The bottom line: it’s all about bridging the gap between IT and business.

Surveys released in the last month from cloud specialist like Saugatuck Technology go hand-in-hand with the direction SAP is taking.  According to Saugatuck, the majority of CIOs and senior business leaders find mobility, which is ultimately linked to the cloud, to be a key role in change.  65% of IT executives also agree that the cloud is no longer centered on cost and cost reduction, but on flexibility.  Lastly, many IT executives consider social capabilities as essential to cloud solutions.These findings complement SAP’s cloud strategy.  Our next generation cloud will be delivered with a “mobile first” development approach and a consumer-like user experience.  Social collaboration is embedded in our product design.  We also support greater business flexibility with our rapid innovation cycles and customer co-innovation.

Video: Cloud findings July

The top benefits companies see in cloud computing are also changing over time.  New data from Forrester Research supports the increasing demand for agility, speed, and flexibility.  Only 32% of enterprises Forrester surveyed in 2009 viewed business agility as a key benefit of SaaS.  Now, the number one reason for CIO and IT executives is no longer cost reduction, but business agility.

Our cloud portfolio reflects this trend.  Because it has been designed the way people work, the SAP Cloud promotes fluid team collaboration and business agility and also allows for increased context decision making. The benefits the SAP Cloud brings speed up development and help our customers run better and faster.  Solutions are integrated seamlessly and work together, both horizontally cloud-to-cloud and vertically with the system of records.  An open platform enables our ecosystem to be extended as new solutions are built on top of our existing platform.

Further research from Saugatuckstates that cloud and hybrid solutions will be the norm by 2016 and that ultimately, cloud pure-play will dominate.  75% of IT investment will go towards cloud and hybrid solutions.  Thus, success with the cloud depends heavily on the flexibility of a “loosely coupled” application strategy and on the strong partnership with a vendor.  SAP’s cloud strategy incorporates this flexibility by enabling our customers to adopt the cloud in an incremental, hybrid solution model.  In addition, the co-innovation methodology that our cloud strategy is founded on allows SAP to collaboratively innovate and manage the evolution of business processes.

Further research from Forrester identifies a trend of increasing investment to improve core business processes with new SaaS functionality.  A growing number of companies are using cloud services for new, innovative technologies.  However, companies avoid replacing existing solutions outright and opt instead to start with extensions.  Extensions allow companies to obtain business agility by streamlining and consolidating in-house solutions before adding new, innovative business processes with cloud services.  SAP’s cloud portfolio provides the best of both worlds with hybrid on-premise and cloud solutions, as well as cloud-only solutions.

We agree that CIOs need to adjust their cloud strategy around existing assets while branching out with new and innovative business functions from cloud solutions.

As focus shifts from pure cost to business improvements, the agility of the cloud must be reflected in the CIO strategy.  Furthermore, together with business partners, CIOs should identify B2B collaborative companies within and beyond their company to reflect the reality of B2B networks.

SAP’s design principles of collaboration and co-innovation drive solutions to be focused on four areas: people, customers, money, and suppliers.  Solutions need to be people-centric, reflecting trends like collaboration, social, analytics, and mobile.  They need to be based on an open platform so the ecosystem can be extended to build new solutions on top.  Solutions must also integrate and perform with the existing investment.

SAP is leading the industry with integration of our cloud strategy and collaboration with CIOs globally to accelerate global business.  Through ongoing dialogue with customers and partners, we place great value on the cloud community the SAP Cloud unit is building. Here at SAP, we work to ensure that innovation is baked in from day one.

Let us know your thoughts,

Sven Denecken (@SDenecken)

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