Why this is the right time to move your SAP infrastructure to the cloud

In recent years technology has transformed how businesses operate, but many organizations continue to cling to legacy infrastructure because “that’s the way it’s always been”. This attitude means that many businesses are missing out on a crucial component for success – a modern, robust, cost-effective cloud platform to run their mission-critical SAP workloads on. We take a look at why this is the right time to move your on-premises SAP infrastructure to the cloud.

For most enterprises, SAP has been a standard backbone for running most of their critical business processes. However, in a dynamic era, as the pace of business has accelerated, enterprises that have on-premises SAP systems have to take a decision to move to the cloud as the economics of maintaining SAP systems has become expensive, and most enterprises do not have the required skills to maintain an on-premises SAP ecosystem.

Additionally, as SAP has extended support for existing ECC systems only till 2027, enterprises have to decide to transition either to SAP S/4 HANA (on-premises) or consider moving to the cloud. Looking at the value proposition of the cloud and the time, money and effort spent in configuring on-premises SAP systems, a significant percentage of SAP customers are planning to deploy SAP S/4 HANA on the cloud. The cloud is clearly the future from a long-term perspective, and for every enterprise, it makes more sense to invest in a platform that gives them the ability to scale up while enabling them to take advantage of emerging technologies.

Key reasons for considering the cloud for SAP workloads

Looking at the value proposition of the cloud and the challenges of maintaining an on-premises SAP infrastructure, many enterprises are naturally more inclined towards the cloud. 

Some of the compelling reasons include:

Business Agility: Compared to an on-premises SAP solution, the biggest benefit from a cloud-based SAP system is the ability to select from pre-configured SAP systems or SAP products and solutions that can be quickly implemented and deployed. This significantly reduces the time that is typically consumed in customizing, configuring, testing and implementing. With a cloud-based SAP system, enterprises can dynamically scale or downsize their platform to match demands. The best part about the cloud model is that small or medium enterprises can start small and scale up their SAP infrastructure on the cloud. This gives unprecedented business agility to companies, and allows them to adopt the best technologies that are typically available to large companies

Lower TCO:When an enterprise moves an on-premises SAP workload to the cloud, it pays only for what it uses. Additionally, the enterprise also saves costs of maintaining the IT infrastructure, in addition to the costs saves in purchasing the hardware infrastructure for hosting the SAP application. A pay-per-use model allows enterprises to move from CAPEX to OPEX models, which helps them save upfront costs. Enterprises also do not need to worry about software upgrades or implementation support, as everything is taken care of by the cloud service provider.

Taking advantage of emerging technologies: By moving to the cloud, enterprises can quickly take advantage of a number of emerging technologies such as AI, ML, RPA, IoT and blockchain. This helps enterprises become more competitive as they can quickly take advantage of new technologies and experiment with them cost effectively.As a result, the overall pace of innovation is faster. 

Faster upgrade cycles:  A cloud-based version can offer enterprises with faster upgrade cycles, which results in better performance, as the SAP platform is constantly fine-tuned. This results in a better price-performance ratio, compared to on-premises systems.

In a dynamic digital environment, enterprises need to be agile to react quickly to the changing needs of the market. A static IT infrastructure that is inflexible to change will prevent enterprises from adopting and accelerating. A cloud-based SAP system is today a necessity for enterprises that are looking to invest in the latest technologies to future proof their business. 

The article has been written by Karan Kirpalani, Cloud Head, NTT Ltd. in India