Nowadays we are flooded by sales people trying to sell “the Cloud”, specially here on SCN where SAP has dedicated sections on the home page for SAP Cloud Computing and HANA with a great focus on the cloud. I usually don’t look at them but as some creep up to the “Top liked”, I’ve seen a pattern emerge.

SAP is constantly trying to sell you the “Cloud”, via blogs that compare On-Premise vs “the Cloud” (badly I might add, but I digress), or adding “Cloud” to every product as if it is something cool, but rarely being specific about it (with some notable exception of course, usually from SCN more tradicional contributors). The fact is that when you talk about SAP “Cloud” you could be talking about:

  • Infrastructure as a Service (IaaS): This is basically having a cloud provider like Amazon or Microsoft provide you with a OS, Database, and you install SAP ECC on top of it. They manage the hardware, you are responsible for most of the software;
  • Platform as a Service (PaaS): This is SAP HANA XS. You rent a platform on which you are going to develop your own services. That platform doesn’t do much by itself, it is an application enabler;
  • Software as a Service (SaaS): This is SucessFactors or Ariba. The software operates on the cloud, it’s usually multi-tenant, and has very little development flexibility as the updates and functionality must be provided by the vendor (with some exceptions).

These are 3 extremely different scenarios that SAP tries to sell as “the Cloud”. And you wonder why customers get confused when you talk about SAP HANA Cloud. What is it? SAP ECC running on HANA (IaaS), SAP HANA XS (PaaS)? Is SAP ECC in the Cloud a SaaS? This leads to a lot of confusion.

Another way to do it? Look at how Microsoft handles this. They have a product called Microsoft CRM Dynamics 2013. Period. It has features, capabilities, and after you have determined if you want the software they ask you: “On-Premise or On-Demand”? They don’t sell you “The Cloud” they sell you software, and the customer chooses where to run it. I’m not a marketing person but I handle customers, and from my experience this is much easier to understand.

The product should come first, where it runs is a matter of economics.

As far as SaaS is concerned, SAP is misguided since it always all about the advantages of “the Cloud” (not even SaaS), instead of the advantages of a particular software. Are all SaaS the same? Are they all multi-tenant? Are they all de facto closed for development? Not really, and this just propagates the myths of Cloud Computing, instead of highlighting the strengths of a particular software package like SucessFactors (which happens to be cloud based).

I see so many generic blogs about “the Cloud”, and so few about actual, real software like SF or Ariba. Sell me SF, don’t sell me “the Cloud” and then expect me to buy SF because it is cloud based.

And so I conclude this blog with the title which sums it up: Sell good software (or platform) and the “Cloud” will sell itself.

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  1. Thomas Porcham

    I totally agree. A product isn’t better just because is runs in “the cloud”.

    In SAP HCM marketing guys even try to sell a hybrid cloud approach as an advantage.

    This means you keep your SAP HCM software on premise and combine it with SucessFactors SaaS. Everything will still be integrated. You just need some more interfaces 🙂

    Thanks for this blog.

    1. Joao Sousa Post author

      I makes sense, take the power of SAP HCM Payroll processing, together with Personal Development capabilities of SuccessFactor. Focus in on the strength of each product instead of where it runs.

      I believe the focus on “The Cloud” confuses both customers and consultants. Today there was someone on SCN asking what were the technical pre-requisites for “The Cloud Sphere” as if the cloud was something in itself….. when in fact it’s composed by so many different things.

      In this case I directed the person to PaaS (mostly HANA XS) but even HANA XS can be hosted on premise. He won’t be developing “Cloud skills” he will be developing (just) skills that will serve him well irrespective of where the software is running.

      That’s why I firmly believe the focus should be on software.

  2. Elizabeth Hill

    Thanks for the thoughtful post. You make a number of excellent points, and your bottom line is right on.

    I joined SAP through the Ariba acquisition. As you may remember, Ariba transformed itself from an on premise enterprise software provider to delivering its suite of business commerce solutions in the cloud. When we started down that path, we were completely enamored of the cloud and the benefits of the delivery model. (We had pictures of clouds everywhere!) At that time, the market hadn’t fully embraced the cloud as a viable option for the solutions we provided, and new customers required a fair amount of hand-holding by our legal and information security teams to be comfortable with the idea of utilizing hosted solutions for core business functions. Still, even though we had work to do to educate our prospects about the merits of ‘the cloud,’ we quickly realized that it was what we helped our customers DO in the cloud that really mattered. So we got back to talking about the business value our solutions provided.

    Fast forward a few years. The cloud has been widely adopted. But there is still plenty to figure out for SAP’s IT stakeholders (who make up a majority of SCN members). As you suggest, we need to get better at telling the SAP cloud story, delineating offerings (IaaS, Paas, and business apps) and building a real understanding. I suspect that once we’ve made good progress there, the flood you speak of will subside. But even against that backdrop, our core focus must be understanding the unique challenges our customers face and delivering an optimal mix of solutions to meet them. That’s still what really matters.

    1. Joao Sousa Post author

      Thanks for the kind words and feedback. Like you say, and I agree completely, business value is what really matters to our customers.


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