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SAP set to add cloud services for vertical industries

It's 'high time' SAP did this, analyst says

By Chris Kanaracus
June 2, 2014 04:16 PM ET

IDG News Service - SAP is hoping to grab a bigger piece of the money its customers spend on cloud-based software by creating a new series of industry-specific services.

The announcement comes on the eve of SAP's Sapphire conference in Orlando and a couple of months after Salesforce.com said it planned to go after six verticals in its own bid for further growth.

SAP's ambitions are broader, with the intent of eventually covering all 25 industries it now serves, according to the announcement.

A new Industry Cloud organization will be led by SAP executive Simon Paris. "Working in industries with highly specialized challenges, we will focus on our customers' most relevant business problems and then work creatively and collaboratively to develop industry cloud solutions," Paris said in a statement.

SAP has already made some steps in the direction of industry-specific cloud services. Monday's announcement cited a preconfigured ERP (enterprise resource planning) suite for chemical companies; the Circular Authority for Insurance application; and the use of its Hana in-memory computing platform by a number of health care startups.

While the announcement may amount to SAP putting a stake in the ground, it's an important one for the company to make, according to one observer.

"I think it's high time they did this," said analyst Ray Wang, founder and chairman of Constellation Research. "Customers are turning to other vendors in the cloud like Veeva for pharma, Accela for public sector and others."

Targeting industries plays to SAP's strength "and customers are looking for this," Wang added.

More details of the announcement are expected to emerge this week at Sapphire, which continues through Thursday in Orlando.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

Reprinted with permission from IDG.net. Story copyright 2014 International Data Group. All rights reserved.
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