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Big SAP customers eager to move to the cloud

But security and integration concerns over cloud services linger, according to the study

By Chris Kanaracus
June 12, 2014 04:20 PM ET

IDG News Service - Some of SAP's largest customers plan to nearly double what they now spend on cloud deployments in the next year -- good news for a company that is trying to position itself as a key player in that market -- according to research commissioned by IT services provider HCL.

SAP's largest customers are keenly interested in moving to cloud deployments, and in a big way, research commissioned by IT services provider HCL suggests.

Some $39 billion worth of SAP "landscape," a commonly used term for the development, test and production systems SAP customers have, may move to the cloud within two years, according to the study conducted for HCL by Vanson Bourne.

The study also found that 45 percent of companies spent more on SAP cloud investments during the past year and will almost double that spending during the next 12 months.

While companies are looking to cut costs, 59 percent cited "agility and speed" as another reason to move to the cloud, while 46 percent named "access to new technologies," according to the survey.

But some longstanding enterprise concerns about cloud computing remain in effect, judging from the survey results. Thirty percent said integration with on-premises systems had been an inhibitor and another 36 percent raised concerns about security and privacy in the cloud. Thirty-eight percent said they simply haven't had the budget to buy cloud services.

Few large SAP customers are considering a wholesale move to the cloud. Eighty-eight percent of survey respondents said they would use a hybrid approach, keeping some systems on-premises.

When SAP customers do adopt the cloud, it won't just be for SAP's packaged SaaS (software as a service) apps. Some 56 percent said they intend to use SAP's Hana Enterprise Cloud at some point. SAP is offering hosted versions of its flagship Business Suite on the service, which runs on Hana, an in-memory computing platform that lies at the center of its overall product strategy.

SAP's decision last year to let customers essentially trade in on-premises software licenses for new ones in the cloud was a popular one among respondents, with 74 percent saying the move has encouraged them to adopt cloud services.

"These stats are not surprising and only highlight the groundswell of opportunity represented by cloud solutions going forward," an SAP spokeswoman said via email Thursday.

Vanson Bourne surveyed 100 executives from enterprises with at least than US$1 billion in annual revenue. Sixty-seven percent of the companies had at least $5 billion in revenue. Fifty respondents were in the U.S., 40 were in the U.K., and the remaining 10 are based in Australasia.

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