In July 2023, SAP announced that future innovations and capabilities will only be available in SAP public cloud and SAP private cloud with a RISE subscription.
The audio version is available to listen to on the SAP Press site, but my favourite go-to for quoted interviews is the diginomica site:
https://diginomica.com/cloud-revenue-growth-misses-sap-q2-future-bright-ai-according-ceo-klein
“…It’s also very important to emphasize that SAP’s newest innovations and capabilities will only be delivered in SAP public cloud and SAP private cloud using RISE with SAP as the enabler. This is how we will deliver these innovations with speed, agility, quality and efficiency. Our new innovations will not be available for on-premise or hosted on-premise ERP customers on hyperscalers. “
What can we take away from this statement? Firstly, we should note the absence of the product name “S/4HANA”. It’s not like SAP to miss the opportunity to include the product name in a discussion. Not once, but twice the opportunity was not used to insert “S/4HANA” into the conversation.SAP’s newest innovations and capabilities will only be delivered in SAP public cloud and SAP private cloud using RISE with SAP…”.
Short version: if you buy RISE, you get the newest innovations and capabilities. This is not explicitly saying they will be included in the S/4HANA product.
This is because in SAP’s own marketing material, RISE with SAP is a solution that includes:
SAP S/4HANA Cloud (one of the two “cloud” editions).
Business Process Transformation
Business Platform and Analytics
SAP Business Network
Outcome Driven Services and Tools
There are plenty of places for innovation to happen in that list and it doesn’t not mean S/4HANA specifically.
Also we have to consider this fact; for SAP to branch the S/4HANA code base from S/4HANA Private Cloud Edition and S/4HANA On-Premise Edition, would cause a lot of development and support effort from now until around 2040.
What if an “on-premise” S/4HANA customer, already at a recent S/4HANA version, decided to buy RISE with SAP? If the code base was massively different it would be a system migration to lift it into a comparable system in RISE.
Instead, by providing these new innovations in some form of BTP hosted service which would only be accessible via RISE with SAP, the S/4HANA code can remain as it is (clean core lovers would like this), albeit with some special user-exits or extensibility points or even an Addon; then the new innovations would be provided by future-proof, containerised BTP services.
This would also allow SAP to leave the option open to eventually offer these innovations, at a much later point in time, to non-RISE customers at a premium, maybe. Especially if they are truly innovative. Who would give up that option to get more money by simply un-restricting access for the wider customer base, to what would be at the future time, old innovations.
The second point we note is that these services may not be included in RISE with SAP for free.
It is, after all, a subscription based service.
“…using RISE with SAP as the enabler. “
Access is provided/enabled through the RISE subscription, but it sounds to me like this will be another request ticket with some contractual costs or additional consumption credits.
Why Restrict Innovations? Another line of questioning has to be: why? – Why restrict these new innovations from on-premise customers?
Apart from the obvious suggestion that it simply adds pressure for customers to take a RISE with SAP subscription, there is another idea and it adds to the thinking that the innovation is not being delivered directly in S/4HANA.
For “on-premise” we have to bear in mind that it does include both systems hosted physically on-premise (in a customer’s own datacentre) in geographical locations that are far from any SAP Cloud entry/exit points, and also those systems hosted in hyperscalers. They are one and same version of SAP S/4HANA On-Premise.
SAP BTP hosted services need the SAP Cloud Connector as integration between BTP and an on-premise solution.
The SAP Cloud Connector is a secure one-way TLS tunnel, over which bi-directional application comms can flow.
For customers hosted under a RISE with SAP subscription, maybe there is some new connectivity solution that can be deployed by SAP that allows a more secure, lower latency connectivity with true bi-directional flow between the SAP system and SAP BTP services. This is what would be needed to provide innovations that require true real-time AI interaction with large data sets.
Maybe this is the reason why on-premise customers will not get these new innovations outside of RISE with SAP?
You may also be interested in:
