This is not good news for SAP

MUMBAI, INDIA: A new survey released by Rimini Street on SAP users has made starting revelations.

According to more than 230 SAP Business Suite applications licensees across industries, roles and company sizes from North and South America, Europe, the Middle East and Asia Pacific, said that lack of a strong business case, unclear ROI, unproven Platform, early stage product were the chief deterrents to use of any HANA platform in their work environments.

Eighty five percent of respondents said that they were committed to S/4HANA, while 68 percent cited lack of business case and unclear ROI as the top factors for their lack of commitment. Thirty six percent cited higher migration and re-implementation costs, whereas more than 40 percent cited an unproven early stage product as a chief factor.

Seventy-two percent of respondents replied that they chose to remain on their existing, stable and mature SAP ECC 6.0 platform, whereas only three percent reported they were using HANA today. The survey also revealed 75 percent of respondents running the ECC 6.0 platform were still leveraging SAP Enhancement Pack 6, or earlier releases, rather than the most current Enhancement Pack 7.

Only 14 percent of SAP licensees surveyed committed to using S/4HANA, but a majority or 33 percent replied in the negative and 52 percent answered clicked on the maybe column.

Responding to a query on reasons for not replacing current application platforms, 43 percent respondents said that the current version meets their business needs, followed by 37 percent who felt it was cost prohibitive to upgrade, and 23 percent who replied they would move to new application later.

The survey also threw some light on SAP’s expensive licensing policies and its impact.

Seventy-five percent of respondents running ECC 6.0 said they are on Enhancement Pack 6, or earlier releases, instead of the most current Enhancement Pack 7. “Seventy two percent respondents said that the current version meets business needs, with 35 percent adding that it was cost prohibitive to upgrade and 30 percent noted that they there were not enough new and valuable functionality.

Forty six percent respondents also noted that SAP support and maintenance is too expensive for support calls, 37 percent maintained said it was too expensive for functionality delivered and 35 percent remarked that it offers no support for customizations.

The survey report is not good news for SAP considering that the findings and related recommendations are critical given that the development of the new S/4HANA release is expected to require more than 400 million lines of code to be re-written and a project labor effort potentially near full re-implementation and migration for many existing SAP software users.

“Rimini Street conducted this survey to better understand the primary application strategies of SAP licensees around the world,” said David Rowe, Senior VP and Chief Marketing Officer, Rimini Street.

He said, “The results of this survey are consistent with analyst commentary and other industry surveys, and a clear theme has emerged – survey respondents cited HANA and S/4HANA as unproven, speculative products with little or no compelling business case in return for the cost and risk of implementation. Pursuing HANA and S/4HANA strategies at this time create unnecessary risk at significant expense with no clear business benefit, according to many respondents.”

“As SAP scrambles to try and show it is a relevant player in the cloud market with its S/4HANA product direction, this survey confirms that SAP licensees plan to continue driving significant value out of their long-running, stable and mature SAP applications that power the mission-critical business operations for tens of thousands of organizations around the world,” added Rowe.