SAP Launches Cloudier Version of its Bread-and-Butter Software

February 9, 2017, 8:36 PM UTC

Business software giant SAP on Thursday introduced a cloudier version of its technology as it continues to push into the modern world of public cloud computing.

The new product, unveiled at an event in New York, promises to let business customers perform the same accounting, financial, and manufacturing management tasks as before, but in a more modern and efficient manner.

SAP, like rival Oracle, has been around for more than 40 years, and has spent the last few of them navigating a tricky transition from selling software that runs on customer sites (which it still offers) to software that performs the same functions but operates out of a shared data centers.

Many customers are turning to this public-cloud deployment rather than dropping lots of money to build and run their own data centers.

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While SAP (SAP) already offers a version of this software that companies run on their own servers, the new cloud version, called SAP S/4HANA Cloud, will include four major updates each year as opposed to one big annual update for the on-premises version. And, it promises what techies call a self-service model so that users pick and choose the modules they need.

SAP says its use of embedded analytics as well as artificial intelligence and machine learning will make its software smarter and more automated than the competition. The “smart” software will learn from user actions which features to enable and set up, for example. It should be noted that nearly every business software company, from Microsoft (MSFT)to (CRM) to Oracle(ORCL) is making the same claim.

Software rollout and updates should be as painless to users as smartphone updates, said Darren Roos, president of the unit responsible for the new software, told Fortune in advance of the event. “Every time I update my iPhone, the apps update and I’m aware of new capabilities but it’s completely non-disruptive,” he said.

That’s a tall order in this world of what major software providers calls Enterprise Resource Planning (ERP) software. These products are big, complicated packages with modules that do everything from managing manufacturing processes, to tracking inventory, to paying bills, to logging payments. It’s hard to make such complex stuff work as easily as an iPhone app.

While ERP has long been SAP’s central business, the company has branched out in the past five years or so. Starting in 2011, it’s bought online software providers including SuccessFactors (human resources); Concur (expense account and travel booking); hybris (e-commerce) and Fieldglass (temporary workforce management) to broaden its portfolio.

The product is now available from three SAP data centers in Germany, the U.S. and Australia, which cover the bulk, but not all of SAP’s markets. SAP plans roll outs in other regions in the future.

After that, the software may also be offered on third-party public clouds like Amazon (AMZN) Web Services, Microsoft Azure, Google (GOOGL) Cloud Platform, or IBM (IBM) Softlayer. That decision will be made based on customer demand, Roos said.

Thursday’s news shows progress in putting what is still SAP’s central business more firmly in the cloud as well. At the event, SAP chief executive Bill McDermott said he expects cloud revenue to outstrip revenue from traditional on-premises products next year.


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