This finding is significant because it challenges the prevailing narrative that cloud adoption is accelerating at the expense of on-premise deployments. The study, conducted in collaboration with SAP, found that while cloud adoption is growing, it is still relatively low for large enterprises. The study also found that the majority of large enterprises are still using on-premise systems, with only a small percentage opting for the cloud. This finding is particularly interesting because it suggests that large enterprises are not yet fully embracing the cloud, despite the potential benefits it offers.
**1. Focus on the Public Cloud:** SAP is shifting its focus to the public cloud, recognizing its potential for growth and profitability. This shift is driven by several factors, including:
* **Increased demand for cloud services:** The global cloud computing market is experiencing rapid growth, with projections suggesting it will reach $800 billion by 2025. * **Competitive pressure:** SAP faces increasing competition from cloud-native companies like Salesforce and Microsoft, who are aggressively expanding their cloud offerings.
* SAP’s S/4HANA is a cloud-based ERP system that aims to replace its legacy ECC system. * SAP has set a deadline of 2025 for the transition to S/4HANA. * Only 33% of SAP users relying on the legacy ECC system have started the transition to S/4HANA. * The transition to S/4HANA is complex and requires significant investment.
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