​SAP doubles down on S/4HANA, rolls out public cloud editions

The enterprise software firm has added automation to its 'next-generation' intelligent ERP S/4HANA Cloud offering.
Written by Asha Barbaschow, Contributor

SAP has unveiled the latest advancements to its S/4HANA ERP suite, which is being launched as a multi-tenant public cloud effort and includes a bevy of new features.

For the new release, SAP has added a new architecture of in-memory technology, combined with contextual analytics, digital assistant capabilities, and machine learning.

The announcement was made at SAP Capital Markets Day at the New York Stock Exchange on Thursday, where SAP touted its enterprise resource planning (ERP) suite as enabling customers to instantly adjust and adopt business processes and models, and act on real-time insight and advice.

Included in the updated ERP suite is S/4HANA Professional Services Cloud for project management; S/4HANA Finance Cloud, which includes procurement and order management capabilities; and S/4HANA Enterprise Management Cloud, which combines professional services and finance capabilities for real-time business management.

"We're not launching a new product here, because S/4HANA has been in the market before," said Sven Denecken, SVP product management and co-innovation at SAP. "But we are seeing that the market is picking that up in a much, much higher speed than ever before and that's why we are doubling down on this cloud innovation -- especially for complete entire ERP suites."

Also: SAP aims to step up its artificial intelligence, machine learning game as S/4HANA hits public cloud

SAP's public cloud push for S/4HANA comes as rivals are making similar moves. Oracle has its own ERP in the cloud and just acquired NetSuite. Workday has been cloud native since inception. Microsoft has launched its ERP in the cloud and is seeing solid growth.

Speaking with ZDNet, Denecken focused on the artificial intelligence (AI) functionality the new release includes. He explained that SAP's digital assistant is actually injected into the capabilities across the solution, rather than it being merely a chatting tool add-on.

"What this machine learning concept -- this digital assistant -- can bring together in that next-generation ERP is combining data and then giving the user the right contextual insight and advice to make the right decision," he said.

"While the concepts of machine learning have been around for a while, we need to give them a business context.

"These concepts of AI or machine learning have come down from the PhD level to something very tangible that can be used now to optimise your business processes."

In addition to S/4HANA tweaks, SAP also announced its innovation road map, which will see the quarterly flow of ERP cloud updates released to the market.

The quarterly updates include setup wizards based on machine learning and AI; pre-populated settings; and additional cloud-to-cloud integration and external application programming interfaces (APIs) to integrate with other applications and legacy systems.

In addition, SAP has detailed plans for including blockchain digital ledger capabilities and Internet of Things (IoT) capabilities that it said will support broader global, digital business models, as well as plans for partners to build localisation and industry vertical extensions.

"The next-generation of intelligent ERP in the cloud I see as the first of a series of innovation updates that customers can now expect to see from SAP," Denecken said.

"We'll continue to provide those updates and some new innovations throughout the year, but we want to make it clear to the market that with that system of trust that we're putting out there in the cloud, with that change is also time to reconsider how you're going to run your business and make it more agile.

"I think we're all going to be surprised with just how much customers are going to consume an ERP in the cloud going forward."

S/4HANA adoption doubled year over year to more than 5,400 customers in 2016. In the fourth quarter, SAP signed up 1,300 S/4HANA customers, which included Nike and Ameco Beijing.

For the 2016 financial year, SAP reported €5.12 billion in operating profit.

Cloud subscriptions and support revenue stood at €2.99 billion, with new cloud bookings increasing 31 percent to €1.15 billion. Its cloud subscriptions and support backlog, consisting of expected future cloud subscriptions and support revenue, reached €5.4 billion at year-end.

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