SAP Service Economy #3: Deep-Dive on Services for Cloud-Solutions
This is part of a series on the SAP Service Economy, the market for Services generated by SAP Software.
- #1: SAP Service Economy – Status in 2013
- #2: SAP Service Economy – Outlook 2017
- #3: SAP Service Economy – The impact of Cloud
The SAP Service Economy is a market place which offers tremendous growth opportunities for Service providers. And this market place is dynamic – you can not rest. Technology innovations percolate into the Service Economy providing new opportunities, but also asking for sometimes dramatic changes.
When laying out what 2017 could look like for the SAP Service Economy, I made this statement
Categories with accelerated growth are Cloud-Services and Services related to our HANA-platform. These segments will grow in excess of 35% annually (!). Note that these segments ask for distinctively different skills and methodologies than the traditional business.
So lets look at this in more detail for Cloud, focusing on Consulting & System Integration.
Cloud impact on SAP Service Economy
Cloud-Services will account for approx. 20% of overall SAP-related Consulting & System Integration Services by 2017. This represents roughly $9B – tripling in size vs today. We expect that this segment will create additional 40’000 jobs worldwide at service providers.
All other segments of the SAP Service Economy together will continue to grow too, albeit at a much lower pace (around 2-3% annually).
Inside SAP-related Cloud-Services
Inside Cloud-Services, we expect the split between services for SaaS (e.g. HCM, CRM, etc) and IaaS (e.g. HANA Enterprise Cloud, etc) to be roughly 50/50 by 2017.
In terms of value chain, we expect the overall $9B of SAP-related Cloud-Services to distribute 13%/38%/42%/7% on advise/implement/operate/expand. So for example Cloud Advisory is expected to be with 13% of $9B at a run-rate more than $1B by 2017.
Cloud will not lead the SAP Service Economy to shrink. Overall the Economy will continue to grow, with Cloud Services growing however much faster and becoming a material segment with 20%.
Given the weight of Cloud by 2017, you have as a Service Provider in the SAP Service Economy to get ready. No way you will be able to stay relevant for your customers if you do not play in the SAP-related cloud-segment too.