SAP users slowly warming to the cloud

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New research released today by the UK & Ireland SAP User Group has revealed that SAP users are now starting to consider SaaS (software-as-a-service) or cloud computing to deliver business-critical applications to their organisation. 61% of the SAP users surveyed said that they saw their organisation using SAP's SaaS offerings in the future. However, the research also revealed that nearly three quarters (73%) believe that SAP had been slow to bring its SaaS suite to market. Indeed, 16% of respondents said that they ended up using another vendor's technology in another area of their business because SAP did not have an appropriate SaaS offering for their needs.
 
"It is clear that more users are now starting to consider SaaS as a way to deliver applications to their business" said Craig Dale, Chief Executive of the UK & Ireland SAP User Group. "Rightly or wrongly, SAP has been criticised for being slow to bring its SaaS offering to the market, but hopefully the result is a more robust and compelling offering.  Users potentially stand to benefit from SAP's hybrid approach whereby organisations have some processes in the cloud, whilst others are kept within the business.  This means that users don't have to put their business-critical processes in the cloud if they feel it is too risky, but can still reap the cost and flexibility benefits for other areas of their business."
 
Currently, only 17% of those surveyed said that they were using SaaS/cloud computing to deliver business-critical applications to their organisation.  However, nearly half (49%) said that they planned to use such services in the next 12-18 months, indicating a growing acceptance of this new delivery mechanism for IT.  Interestingly, the research revealed that over half of the respondents (55%) thought it was more difficult to establish and meet SLAs by keeping all their applications in house, indicating that they actually see the cloud as a better way of meeting their requirements.
 
Unsurprisingly, reduced costs (35%) and quicker deployment times (32%) were cited as the biggest benefits for using SaaS/cloud computing by users.  However, when it came to the biggest barriers, opinion was much more evenly split. Compliance/data protection fears (34%) were cited as the biggest barrier, followed by lack of control (26%), lack of customisation (20%) and the risk of network / server outages (20%).  This highlights that there still needs to be a lot more education and reassurance when it comes to organisations deploying SaaS/cloud computing services in the future.
 
"Following SAP's recent announcement regarding its new Business ByDesign ERP suite, there will no doubt be a lot of renewed interest in software-as-a-service from SAP users. With any technology adoption, it is essential that you look before you leap.  Therefore, in the coming months, and at this year's annual user conference, we will be aiming to further educate our members on the pros and cons of SaaS as different organisations will have different business needs," added Craig Dale.

"The research findings reinforce the fact that SAP believes in a hybrid model that combines on-premise and on-demand offerings, a mode that allows customers to evolve their businesses and choose which offering fits which business need best. We have been listening closely to our customers' needs directly and through our relationship with the SAP User Group, and as a result will continue to offer both of these options providing our customers with the choice and flexibility they require," said Tim Noble, Managing Director, SAP UK & Ireland.

Noble continued, "We truly believe we came to the marketplace early enough with SAP Business ByDesign.  Innovation is more than just having great ideas and developing nice software. Innovation is only innovation when it is also implemented at the customer and being used productively. This is why we have been working with pilot customers until now to ensure the solution is robust and ready for volume business."

The UK & Ireland SAP User Conference 2010 is taking place in Manchester, 21-23 November 2010.  During the conference there will be a dedicated stream on SaaS where delegates can find out more about SAP's SaaS offerings and how they could benefit their organisation.
 
The survey questioned 100 SAP user organisations in the UK and Ireland providing a snapshot of members' views on SaaS/cloud computing and the business challenges they were facing.
 
About UK & Ireland SAP User Group
The UK & Ireland SAP User Group's membership is open to users of SAP products in the UK and Ireland. Membership consists of organisations of all sizes and includes some of the largest private companies and significant public sector organisations in the UK and Ireland.

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