What are the key catalysts driving cloud adoption across modern businesses? How different is the Indian scenario?
All organizations across the globe are embarking on their digital journey. There are different business models emerging as part of this digital transition. And cloud gives you that flexibility to be able to adapt to these emerging business processes. This is one fundamental reason why businesses are considering cloud, as it becomes part of the digital transformation that customers make in terms of how they can adapt to new business models.
Second, businesses now are increasingly focused on their core competencies and as a result of this, they do not want to develop their expertise in building and managing the systems in house. And to achieve this, they choose to go by the best practices and cloud becomes one option where organizations choose to develop their internal capabilities. In doing so, they identify the application, build the business processes, consume the business on cloud and pay for what they use and there is no expertise apart from using the application that’s required. It also frees up a lot of capex that you have in your business versus a cloud model that is mostly opex, in other words you pay as you use.
Organizations are moving business applications that are more permeable to use in mobile devices such as HR, CRM and procurement applications to cloud first.There are other areas like disaster recovery sites and backup sites that are being moved to cloud by default as people are no longer putting it on premise. This is the trend globally and also here in India.
And what about the dilemma Indian CIOs face while choosing between private and public cloud?
Organizations prefer to have line of business applications such as HR, procurement, travel expense, CRM etc in a public cloud as people need to access the application from anywhere. When you deploy an application in public cloud the difference is that you have to use standard best practices that a vendor will provide. Since, it is a multi-tenant application you can’t do too much of customization as it is hosted globally in multiple data centers and the speed of access is similar from various places. This is where the industry is moving.
Private cloud is deployed by large customers with a need for reasonable amount of customization in their core ERP applications. Then they could exercise the private cloud option as there is a single tenant where your application is deployed and it can allow a certain amount of customization that customers want to do. On a private cloud, you can put security specificity to anything additional that you want to do. For this reason organizations opt for private cloud.
SAP has almost 600 partners whom we work with at various levels. Right now, we do 60 -70 percent of our GB and midmarket business with partners.
The difference with the multi-tenant application in a public cloud is that in a single instance you will have many companies running with little partition. As for the private cloud, there is a specific set of hardware that is allocated on which the application runs and it is a single instance if you want to move technically.
What type of workloads or applications are Indian enterprises moving to cloud?
Horizontal line of applications are moving to cloud first. When you look at SAP strategy, there is S/4HANA which is our core that is deployed on cloud or on premise. Then we have our point solutions which are Sucess Factors, C4C for CRM and Fieldglass for managing contingency and these solutions are deployed on public cloud.
Then there are core applications where business processes are running which is where organizations are charting their road map as to how they want to move to cloud. When organizations approach us to embark on their S/4HANA journey, we give them the deployment option in HANA enterprise cloud.
How are you tapping net new customers for SAP Cloud? Is it direct or through channels?
SAP traditionally has been very partner focused and what we do with large customers of SAP is that we work with them directly and make sure that we are partnering with them long term, provide solutions, work closely and co-innovate and make sure that they are on top of the game.
For our midmarket business, especially General Business (GB) and even Small and Medium Business (SMB), is the business that we extensively do with partners. SAP has almost 600 partners whom we work with at various levels. Right now, we do 60 -70 percent of our GB and midmarket business with partners. Our directions are to take 100 percent of our business to midmarket through our partners. If you look at GB midmarket, where we required new customers, there we have worked extensively.
Which industry verticals do you see the early adopters of cloud in India coming from?
In India, I would say, we have already crossed the chasm. It is no longer in the early adoption stage. It is pervasive as all businesses are looking at cloud adoption. If I would cut to one or two years back, then businesses who were in emerging sectors like e-com and IT services adopted cloud earlier. Now, everyone is on the bandwagon, almost every organization has a cloud strategy.
What type of channel partners work with SAP on its cloud offerings? Why should they work with SAP instead of competition?
SAP is a cloud company driven by HANA and we work very closely with our existing and new partner ecosystem, whom we have identified based on their specialization in certain industry verticals or in a solution area. We have a fairly strong program of signing up of these partners, enabling, training and also in terms of working collaboratively in the market to make sure they get their initial earnings in SAP cloud solution. We have one of the best partner enabling programs where we have set up a partner advisory board and a representative organization for partners who we continuously interact with. They keep advising us about the new things and better ways of interacting with partners and what we need to do about the same. Our partner incentive program is fairly strong in terms of commission that they earn in selling SAP software. Another key draw for the partners is the business that they receive in implementation of SAP application. We also work with them for enabling their business as well as in setting up their digital road map.
What is your GTM with respect to aligning with channels on your cloud portfolio? What type of companies can partner with SAP?
For our cloud journey we work closely with a partner ecosystem and we have identified them based on specific industry verticals or solution area. These are partners who are specialized on each of our line of business applications. We are investing a lot in building the cloud market in tier 2 cities also. Not only we work in GB in tier 1 cities like Delhi and Mumbai, we again have a specialized commercial team which works with customers in tier2 cities where we are investing and building markets. Here, we look at partners with specialized skills and competency and also the partner ecosystem in specific city depending upon their potential and their activities in that area. Once we have identified the partners we have a specific team in SAP which is fully allocated for partner enablement. There is a sales team which makes sure that these partners are successful, go to the field with them and help them identify opportunities and also involve SAP expertise. In tier 2 cities, we help partners with remote presales activities.
If you were to pick your set of priorities (business wise, company wise or technology wise) for the Indian market in 2016 and beyond, what would they be?
We work with our customers for their digital transformation and are able to work around our 5 pillars. We take a holistic approach with our customers in terms of defining the vision with them of their digital transformation which includes cloud deployment thus offering them flexibility. It’s a full blueprint we try to chalk out for them and the customers will move based on their priorities.