SAP already shifting focus from ERP migration disaster in pursuit of AI-driven growth

Summary

SAP has begun to shift focus away from its failure to hit legacy software and cloud migration targets and onto the latest so-called "innovation" elements of its portfolio, such as AI. From the beginning of next month, Thomas Saueressig will see his role expanded from chief customer officer to lead the new Customer Value Group to support the expansion of SAP's cloud and AI-powered solutions as part of a board-level reorganization. He was previously head of product engineering. At the same time, CEO Christian Klein is also setting up a new unit to encourage adoption of AI and introduce a new way of charging for AI consumption, according to reports. Last week, The Register revealed that five years after launching its rescue plan to lift ERP users to the cloud and switch them to the latest software, SAP is off target by about €2 billion. Mainstream support for its widely used legacy ERP software ECC – still relied on by global manufacturing and industrial companies – ends in 2027 while extended support at a 2 percent premium is available until the end of 2030. Gartner estimates that by then, more than 10,000 SAP customers will continue to run major parts of their business on ECC, with the larger, more complex organizations over-represented in this group. There is also an option to continue to get SAP support for ECC until 2033, provided the customer signs up to a migration plan. In October 2020, Klein promised a new strategy after cuts to its sales and margin outlook caused a 23 percent share price crash. The resulting plan – RISE with SAP – promised to lift and shift complex SAP environments into public, private, and hybrid clouds. In addition, it planned to move users of legacy ERP software to the latest product S/4HANA. SAP is understood to have ceased publishing figures on ECC migration since the vendor replaced its product RISE with SAP S/4HANA Cloud Private Edition with SAP Cloud ERP Private Edition, creating confusion over licensing. However, SAP said it expected...