More SAP business apps to be cloud

Software vendor vision aims to make SaaS the primary model

German software giant SAP is already a major player in cloud computing, providing partners and customers with either software services or the ability to deploy applications in cloud environments. Now, SAP is pivoting more of its applications to the cloud in a plan to make software services the primary delivery model.

SAP's plan is a recognition that cloud computing is already the preferred consumption model, but adoption of cloud is hampered by the lack of business applications delivered as a service or the inability of businesses to deploy existing applications in cloud environments.

Bernd Leukert, a recently promoted member of the SAP executive board, is driving this transition to break free from competing against Oracle and other database vendors for share of software on servers.

By moving more of SAP's portfolio of financial, human resources, asset management and logistics applications to the cloud, Leukert believes SAP will be in a better competitive position.

"There is confusion. There's no debate any more in the IT industry that the cloud will be the preferred consumption model," he said, referring to the shift toward delivering software via the internet instead of installed on clients' servers.

"A road map is something we owe the market," Leukert said in an interview with Bloomberg.

First SAP is going to devise a plan for moving Business Suite, the collection of its core business application products to a cloud services model.

It's also looking to consolidate many of its other leading applications, such as SuccessFactors and payroll, to create more holistic offerings.

Just how SAP will pull off this pivot to the cloud is unclear. That's the job of Leukert and his team of 18,000 developers.

Eventually, the plan and the products will be communicated to SAP's global channel, which is already delivering application development, deployment and support services.

If SAP successfully executes Leukert's vision, it could have a profound impact on the SAP channel.

While Leukert is correct in stating that cloud is a preferred consumption model, the need for complex cloud applications and support is opening new opportunities for providers to add value with services such as tailoring and integrating applications and even operating applications for their customers.

Several SuccessFactors partners are already acting as outsourced human resources services providers, in which they use cloud and on-premises applications to support their customers while relieving them of operational burdens.

The analyst community isn't sold on SAP's strategy, as Leukert and his team are just starting to develop their plans. Nevertheless, the vision is crystal-clear and likely even more beneficial than initially conceived.