“Who pays when the SAP data center goes on strike and the solution is down?”
Data Center going on strike? That portion of a quote from Hermann-Josef Haag, spokesperson for the DSAG HR management working group made me stop in my tracks. In 20 years of covering cloud applications I have seen most clients protect themselves with SLAs for uptime and recovery. But in the downtime scenarios we discuss it is hardware or telecom failure, or poor systems management hygiene, or an act of God, never a union strike. Especially since even massive data centers are managed by only a handful of humans.
Haag points to a broader caution in Germany (and many other EU countries) about cloud computing. There are concerns about data residence, inadequate local vendors with that model and general discomfort with someone else running your infrastructure.
Haag made his comments as part of SAP’s recent decision to ”offer a new on-premise HCM option based on SAP ERP HCM with a comparable functional scope (except for the SAP E-Recruiting application and SAP Learning Solution).” It is intended to be deployed alongside, and integrated with, SAP S/4HANA. The solution is planned for availability in 2023, with maintenance planned at least through 2030.”
Many of my analysts friends in the US are aghast that SAP would announce a NEW on-premise product. Jarret Pazahanick commented on LinkedIn SAP has “made a major mistake with the announcement below and will ultimately regret this strategic direction.” Another who shall stay nameless told me “I look forward to SAP taking us back to 80 column cards”. Ouch!
I am less sanguine. Markets evolve differently. I have been to over 60 countries and have only driven in one which has right-hand drive, and I have never driven a stick-shift car. My nightmare scenario is a rental car company has lost my reservation and I have to struggle with a right-hand wheel and stick-shift But here’s the reality. Citizens of 75 countries around the world including Japan, UK, Australia and India drive cars on the “wrong side”. Last year, nearly half the cars sold around the world were still manual transmission. Seriously. That’s 5 decades after Playboy magazine ran an article with a two-page shot of a Corvette shifter covered in cobwebs and the headline “Bye-Bye Stick Shift.”
Ford and Daimler and Toyota learned a long time ago you cannot “fight city hall”. Give customers what they want. I think SAP needs to do the same. Give the German speaking market on-prem, give the N American market clouds.
Even though its cloud acquisitions – SuccessFactors, Ariba, hybris, Concur etc – were not cheap, they have helped keep SAP competitive on this side of the pond. With what we have seen in the first couple of years of S/4HANA the ship is tilting back to the on-premise world. Oh sure it promises three options – public cloud, private cloud or on-premise but the public cloud option is a tiny portion of the deployments.
It’s still early in the S/4 journey. I think SAP should go talk to Mercedes and Toyota and Ford about how they deliver both right hand and left hand drive and a mix of automatic and stick-shift (and many hybrid gear configurations).
The US market has evolved very differently from the European market. Time to develop a clearer, two-tier strategy.
Photo Credit: Amazon
(Cross-posted @ Deal Architect)