SAP said it will simplify its contracts, offer business transformation as a service, and ultimately shift more customers to the cloud.
CEO Christian Klein said business transformation is no longer an option and the program, called RISE with SAP, will offer “one single handshake” when it comes to dealing with the company. “Transforming into an intelligent enterprise has never been more important,” said Klein.
Sven Denecken, chief operating officer of S/4HANA and head of product success at SAP. SAP’s offering will aim to be a concierge to the intelligent enterprise that will control service level agreements, operations, and support.
“This is a new offering that we think is a game changer,” said Denecken. RISE with SAP will aim to consolidate multiple contracts with customers and put them on a subscription model that includes more than just technology. In many ways, SAP is taking over some of the functions that it would previously offload to integrators and partners.
RISE with SAP is the first installment of a broader plan to move customers to the cloud. In October, SAP outlined a sweeping plan to move to one data structure and aggressively move customers from licenses to cloud subscriptions. SAP’s fourth quarter results will be better than initially expected.
Here’s what RISE with SAP will include:
- Business process redesign including recommendations, benchmarks, best practices, and simulations of transformation. Business process designs will be based on SAP’s experience with more than 400,000 customers across 25 industries.
- Robotics process automation and artificial intelligence services will be embedded into workflows.
- Tools and technical migration services to the cloud via multiple providers. “Part of the offering is using the right infrastructure, right geo and right size,” said Denecken.
- More than 2,200 APIs to integrate systems.
- One semantic data layer.
- Prebuilt SaaS and platform offerings with the ability to customize by industry.
- S4/HANA Cloud connectivity to business networks, assets, logistics and supply chain. SAP contends that digital business transformation is about networks as much as technology.
- S4/HANA Cloud that can be used in private or public cloud deployments.
Denecken said there are multiple partners involved with RISE with SAP and the company is working with the big four public cloud providers–AWS, Microsoft Azure, Google Cloud and Alibaba–but infrastructure will be abstracted. Klein was joined by Microsoft CEO Satya Nadella at the RISE with SAP launch with other partners. Siemens and LiveKindly also joined Klein on stage.
With RISE with SAP, the company is taking more control of the customer relationship as well as establishing a long-term engagement revolving around business transformation. Deals with customers will include one contract with SAP managing the technology moving parts in the background. “We are going to offer new technologies and understand new ways to run the business and deliver data to value,” explained Denecken. “Business transformation will be different by client but we will support them through transformation that is constant.”
SAP so far has more than 100 customers operating under the RISE with SAP model. The company said partners may have services baked into the program or form an ecosystem.
As for the contract mechanics for customers here are a few key points:
- Customers can move existing licenses under the RISE with SAP offering. Subscriptions would be tailored based on the digital business maturity of the customer. “We will allow customers to swap licenses,” said Denecken. “We are embracing that change and want the entire installed base over with S4/HANA Cloud at the center.”
- Contracts for larger companies would likely be three years and longer in some cases. Smaller customers and new ones may have shorter terms.
- SAP will offer contracts that include migration, technology and all the components underneath.
- Milestones and benchmarks will be tracked to ensure total cost of ownership and returns.
- SAP will make suggestions on cloud providers to use based on technology, platforms, and geographic requirements. “The customer selects what to run and what not to run,” said Denecken.
- The RISE with SAP effort is the first concrete move for the company’s broader ambition to move its customer base to the cloud and a subscription model.
- Existing customers may find value in moving to subscriptions, but the pressure will be on SAP to deliver digital business transformation value.
- Prebuilt connectors to SAP’s various networks may be a plus.
- It’s unclear how the SAP ecosystem will react to RISE with SAP since the software giant will be taking control of deliverables while abstracting vendors and services.
- Ultimately, RISE with SAP is likely to be good for customers because it will put SAP on the hook for delivering real value.