SAP Services Will Make Or Break SAP's Platform Strategy

Over the past few months, SAP Services has embarked on a major software-enabled services transformation of its offerings and operating models. The strategic intent is to increasingly rely on IP-based solutions (including SAP’s Rapid Deployment Solutions portfolio and assemble-to-order methodology) to deliver outcomes faster, with lower risks for clients and, eventually, support value-based pricing. Next on SAP Services’ transformation road map? I believe that the organization needs to quickly change the perception of the rest of the SAP ecosystem, which still views SAP Services as a competitor.

SAP Services’ business model used to merely rely on staffing “rock star” consultants on client projects in order to facilitate the implementation of complex solutions. The new strategy aims at positioning the 15,000 service professionals on SAP’s newer solutions (e.g., cloud, mobile, HANA . . .) in order to ensure that early projects generate the promised outcomes. In order to achieve this goal, the delivery teams need to be much more focused on collaborating internally (with the R&D team, for instance) as well as externally (with clients). SAP Services will also need to increasingly work collaboratively with its partners in order to ensure the success of the overall SAP-as-a-Platform strategy.

SAP Services needs to:

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Old ROI Methods Are Holding Back The Adoption Of New Technology

My colleagues at Forrester and I have been puzzling over the discrepancy between the wealth of attractive new mobile, cloud, and smart computing technologies in the market, and the relatively weak record of actual growth in tech spending that our tech market forecasting numbers show.  Certainly, the recessions in Europe and weak economies in the US, Japan, China, India, Brazil and other emerging markets explain part of the weakness in tech buying.  In addition, cloud computing’s impact on the timing of tech spending (reducing initial upfront capital purchases of owned hardware and software while increasing future subscription payments for use of these resources) means that  spending that in the past would have occurred in current years has now been pushed into the future.  Lastly, as a recent Economist article pointed out, business investment in general has been low compared to GDP and to cash distributed to shareholders this decade, as CEOs with stock option compensation have focused on meeting quarterly earnings-per-share targets instead of investing for the longer term (see Buttonwood, “The Profits Prophet,” The Economist, October 5, 2013). Still, even taking these factors into account, tech investment has been growing more slowly relative to economic activity than in past cycles of tech innovation and growth.

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Four Common Approaches To Private Cloud

In 2012, I wrote a blog titled Private Cloud: 'Everyone's Got One, Where's Yours?' which looked at the perception of private cloud versus the reality of the environments that carry this name. Although reported interest and adoption were high, most environments fell short of the basic characteristics of cloud. Almost 1.5 years later, Forrester continues to see interest in and reported adoption of private cloud -- according to Forrester's Hardware Survey, in 2014, 55% of North American and European enterprises plan to prioritize building an internal private cloud, and 33% already having adopted private cloud. Despite the increased awareness in private cloud shortcomings, Forrester found that only 1/4 of these "private cloud" environments establish self-service access for its users. What's most interesting is that most of these enterprises aren't looking to private cloud for cloud-specific benefits. 

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Four Common Approaches To Private Cloud

In 2012, I wrote a blog titled Private Cloud: 'Everyone's Got One, Where's Yours?' which looked at the perception of private cloud versus the reality of the environments that carry this name. Although reported interest and adoption were high, most environments fell short of the basic characteristics of cloud. Almost 1.5 years later, Forrester continues to see interest in and reported adoption of private cloud -- according to Forrester's Hardware Survey, in 2014, 55% of North American and European enterprises plan to prioritize building an internal private cloud, and 33% already having adopted private cloud. Despite the increased awareness in private cloud shortcomings, Forrester found that only 1/4 of these "private cloud" environments establish self-service access for its users. What's most interesting is that most of these enterprises aren't looking to private cloud for cloud-specific benefits. 

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Are cloud platforms saying goodbye to the hypervisor?

OpenStack, CloudStack, Dell, IBM SoftLayerand othersare pushing a new agenda in cloud computing, one that eschews the hypervisor. Is this the future of cloud platforms or just another feature?

So far the latter seems to be the prevailing trend as the majority of public cloud platforms and private cloud software solutions start with the foundation of server virtualization. The bare metal options are being positioned more for two purposes:

  • Auto-provisioning new nodes ofthe cloud - bare metal installation of the cloud solution and the hypervisor

  • New compute resource types inthe cloud - using new automation capabilities to add a complete physical server to a customer’s cloud tenancy, as if it were just another virtual machine.

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