SAP insider Magazine
EXPERT OPINION/ HPE
SAP’s Cloud Sovereignty Shift Why the future of enterprise ERP is moving back to the data center to secure AI and data control.
By Radhika Ojha
T he path to SAP S/4HANA has long felt like a one-way street leading directly to the hyperscale public cloud for most enterprise leaders. However, according to Jim Loiacono, Sales Lead, HPE World- wide SAP Private Cloud, that assumption might be the single greatest barrier to actual business value. Loiacono recounts a recent experience with a Texas-based customer who spent nearly two years navigating Cloud ERP conversations before finally hearing an offer that resonated with its actual op- erational needs. The company’s ultimate choice? Cloud ERP Private but hosted by SAP within the customer’s own data center. “If I could offer SAP customers only one state- ment of advice, it would be that SAP customers should evaluate all deployment options for Cloud ERP,” Loiacono says. He adds that the industry often conflates Cloud ERP with Data Center Migration, but the two are not inextricably linked. “While moving to Cloud ERP requires a shift from perpetual licensing to a subscription model and sharing database ad- ministration responsibilities with SAP, it does not mandate moving your systems away from where they currently run—whether that is on-site or in a colocation facility,” Loiacono explains.
The Iceberg of Integration One of the primary reasons for resistance to Cloud ERP adoption is the incorrect assumption that mi- gration to a hyperscaler is mandatory. This mis- conception creates unnecessary risk and business disruption. SAPinsider recently reported that the top two reasons for hesitating on SAP Cloud ERP Private are the perceived value and the total cost. Loiacono argues that mitigating both cost and change actually results in higher value. However, to understand the real cost, one must look beneath the surface of the Cloud ERP label. Enterprise-scale SAP customers understand that ERP is just one critical organ in a much larger digi- tal body. Loiacono uses a sharp analogy: “These application dependencies can create differences in perceived value like a waiter’s perspective versus a head chef’s perspective of what is happening in a restaurant kitchen—the waiter has a partial per- spective, and the head chef has a full picture.” Without proper due diligence, decision-makers— the waiters in this scenario—may fail to realize that high-level subscription and migration estimates represent only the tip of the iceberg. They often significantly understate the total cost of a holistic migration by ignoring customer-specific dependen- cies like custom code, multi-level integrations, and
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