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The State of the SAP S/4HANA Market – What Can We Conclude from Research by ASUG & IDC?

By Greg White

Unless you’ve been sequestered in the bowels of a data center, you’ve heard that SAP customers are busily making plans to move to S/4HANA. Some recent reports provide insights into how those plans are progressing and the major considerations that are showing up. In June 2019, IDC released a white paper (sponsored by SAP) entitled “SAP Customers on the Move to SAP S/4HANA”, and just before that in May 2019 at SAP SAPPHIRE NOW and the ASUG Annual Conference in Orlando, the ASUG Research team also presented a very well attended session entitled “ASUG’s Point of View on SAP S/4HANA (and Some Insights for You)” by Adam Page and Emily Corno.

THE FACTS, JUST THE FACTS PLEASE

First, let us review the facts.

ASUG Research carries considerable credibility since it surveyed a “captive audience” of its members, all of whom use SAP products, so most people would tend to agree that the results do show what a representative swath of SAP customers are thinking and planning.

What was presented in the ASUG Research session confirmed what has been inferred since the last quarter of 2018, which is that the move toward S/4HANA is gaining significant momentum:

  1. 56% of ASUG members surveyed have plans to move to S/4HANA
  2. 16% have started to move
  3. 16% are already live
  4. And only 12% have no plans
  5. Finally, implementation increased by 33% from January 2018 to January 2019

When asked what the barriers to SAP S/4HANA migration are, ASUG respondents confided that:

  1. 55% need a business case / business justification
  2. 41% indicated that it’s “not a priority for my company”
  3. 34% cited “product maturity” as a barrier
  4. 34% cited “cost/lack of financial resources” as a barrier

IDC conducted a survey in April 2019 of 300 SAP clients made up of IT and LOB executives from 10 countries and from organizations with 1,000 to 25,000 employees across a multitude of industries.

This interesting June 2109 report was authored by Mickey North Rizza, and it revealed that:

  1. 54% are planning on deploying SAP S/4HANA within 3 years
  2. 43% are consolidating several ERP instances to one SAP S/4HANA, the so-called Bluefield implementation
  3. 33% will do a system conversion from ECC to keep current data, configuration and customizations – this approach is often referred to as a Brownfield implementation
  4. 23% will do a completely new implementation – the Greenfield implementation in which only data will be migrated over to a new S/4HANA instance from the ECC instance
  5. 9% currently have S/4HANA in production in one form or another
  6. 18% are currently deploying S/4HANA

Before we get into the analysis of all these numbers and findings, let us also examine what ASUG and IDC have found about WHY SAP customers are making the move to S/4HANA.

IDC was very clear in its explanation of the importance given by customers of moving to SAP S/4HANA:

  1. It is a large part of the SAP customers’ digital transformation strategy
  2. SAP customers need more speed and agility from their systems
  3. SAP customers require innovation
  4. SAP customers need to scale quickly
  5. SAP customers acknowledged that S/4HANA is SAP’s future strategy

ASUG Research asked its members the question “Which, if any, are motivators for you to move to SAP S/4HANA?”, and we subsequently learned that:

  1. 63% said that a motivator is “Staying current with the latest technology”
  2. 59% cited “Improved performance”
  3. 58% cited “Optimization of existing business practices” 
  4. 57% answered “Faster access to analytics”
  5. 45% said “Better set-up to introduce new tech”

SOME ANALYSIS AND POSSIBLE CONCLUSIONS

Neither research project cited any SAP customers mentioning the lack of support for running ERP on any database except SAP HANA after December 31, 2025, or that SAP ECC will be entering “End of Mainstream Maintenance,” which means that while SAP ECC will continue to be supported (albeit at a higher maintenance cost), there will no longer be any new features or innovations added to this product.

Could we, therefore, conclude that for most SAP ERP customers, the requirement to move to HANA and S/4HANA is basically a fait accompli if SAP products will continue to be used to run the business? While there are still some SAP customers who have made their less than happy feelings known about 2025, the data from these 2 separate research efforts seem to conclude that SAP customers are indeed moving in significant numbers to S/4HANA, and for more positive reasons than that they don’t have a choice. The prevailing business value reasons appear to be innovation and better performance according to both research projects.

Now that we have established that the move to S/4HANA is well underway, the impact on SAP customers’ infrastructure globally is the next topic to examine. There is no question that the legacy infrastructure which has supported and is today running most SAP ECC on Oracle, SQL Server, or DB2 (aka AnyDB) can’t support also running SAP HANA. But new options have emerged, passed SAP certification requirements, and now been proven in the market that are presenting a different approach, simplifying operations and delivering enhanced value. Legacy approaches of using an appliance or TDI for in-memory databases have struggled with limitations on flexibility, advanced capabilities (like snapshots), time to deploy and scale, and management simplicity.

As a result, many SAP customers have been looking at local cloud-like capabilities and public/hosted/managed cloud so that they can speed migration to S4/HANA, provisioning, and scaling, and provide better resiliency, agility, and flexibility.

While there has been momentum for SAP HANA and S/4HANA adoption entirely in the public cloud, as S/4HANA adoption is entering more and more the mainstream, there appears to be a more diverse perspective emerging. This is shown in the ASUG research where one third would deploy solely on-premise, about a quarter in a hybrid approach and the rest on some form of public cloud. Many ASUG members who have deployed HANA or S/4HANA in the cloud have expressed their displeasure at both costs as well as the lack of standards for cloud implementations. These ASUG members have openly said that it costs more to deploy in the cloud and that a deployment on one public cloud cannot easily be moved over to another due to different cloud standards and approaches.

NUTANIX & HCI IN THE NEW AGE OF SAP S/4HANA INFRASTRUCTURE

As the industry leader in Enterprise Cloud, Nutanix delivers the easiest and fastest to implement on-premise private cloud and hybrid cloud infrastructure for the current or soon to be SAP S/4HANA customer.

The Nutanix enterprise-grade hypervisor, “AHV,” along with the Nutanix hyperconverged infrastructure solution, (AOS), is certified to run SAP HANA and S/4HANA and can help speed and simplify both the transition from ECC and any interim ECC refreshes in the lead-up to HANA. Indeed, with Nutanix, SAP S/4HANA customers don’t have to go to Amazon AWS or Microsoft Azure to be able to provision a new Sandbox, Development, or QA environment in minutes instead of weeks.

Nutanix’s hyperconverged infrastructure (HCI) based approach provides the ideal platform to meet the unique requirements of the SAP HANA database and associated app servers. And Nutanix’s easy to implement disaster recovery solutions perfectly complement the SAP HANA System Replication methodology favored by most SAP HANA customers today.

If you are an SAP ERP customer, you may be moving to SAP S/4HANA sometime soon. Your plan will require a new SAP infrastructure to replace your legacy approach. Your new SAP environment will need to have cloud-like capabilities with the same cloud-like effort and resource levels. It needs to be highly scalable and agile, it needs to be very automated and resilient, and it needs to easily support the requirements of a modern business continuance and disaster recovery strategy for SAP S/4HANA.

We’re continuing to expand what Nutanix can do for you when it comes to SAP solutions. In addition to our previous HANA and NetWeaver certifications, we recently added support for SAP Business One HANA and Cascade Lake processors to the list.

Take the next step and read the ASUG paper about infrastructure for SAP, then come visit us at www.nutanix.com/sap and at SAP TechEd in Las Vegas or Barcelona to learn more. If you’d like to have a personal 1x1 discussion to get more information, see a demo and share your specific needs and details, send a note to sap@nutanix.com

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