Top Trends in Cloud Innovation

At the upcoming At the upcoming SAP Innovation Forum in the UK, Sven Denecken, VP of Cloud Solutions Strategy will be presenting an update on SAP’s Cloud Solutions. I took the opportunity to catch up and ask about the latest trends in cloud innovation.

What’s your background?
I had my own IT company, sold it to an SAP partner, and through that partner, came to SAP. I have always worked in IT, and I have always loved co-innovation, working closely with customers to create new solutions to real problems.

SAP isn’t necessarily the first name that comes to mind when people think about cloud solutions — why is that?
I think it’s because we tend to talk about cloud in relation to the consumer space — how many billions of people are using Facebook or WhatsApp.

In business, cloud is still relatively new, and the news cycles are dominated by the pureplay cloud providers.

SAP is the largest overall business cloud company in number of users: 35 million, in 191 countries and 25 industries around the world. One of our customers has the world’s largest cloud deployment, with more than 2 million users.

The number of users is the most trusted currency in the cloud. You know that if people pay for a service, then it’s providing something of value. And it gives you an opportunity to understand how people are using the software, see trends, gather benchmark information and turn this into advice and best practices in cloud solutions. This is something we’ve already done with our cloud solutions, and we have created innovative service offerings around best-practice co-innovated with customers and partners, such as social selling, collaborative onboarding, and learning.

We’re also the number one in terms of revenue among the mega-IT vendors. SAP Jam is the leading enterprise social business platform with over 12 million users — more than Salesforce Chatter or Microsoft Yammer. And with Ariba, we run the world’s largest business network, with more than 1.2 million connected companies. Half a trillion dollars of commerce is transacted each year via the platform — more than eBay and Amazon combined.

So when it comes to business cloud solutions, we are a trusted partner — just like we are in on-premise where 65% of the world wide GDP runs through our systems. That is the key difference to the consumer cloud space – you need to be serious, safe, and secure. That´s what we have been doing for 40 years and it’s the same in the cloud.

It seems clear that at some point in the future there will be a tipping point, and the default platform will be the cloud. Why haven’t we reached it yet?
Attitudes to the cloud differ by region and by maturity of the solutions. Above all, it will require trusted vendors who can deliver hybrid cloud and on-premise solutions – which by the way need to be integrated with each other to cover end-to-end business processes.

Most of the providers today only do a piece of the needed puzzle – just SFA or just HR. And most only offer cloud, so using them requires a “rip and replace” approach. At SAP we realize that most companies have existing software assets that are working well for them. Hybrid solutions will be the norm, and we’re perfectly situated to take advantage of that trend. It’s just one of the reasons our cloud solutions have been growing at more than 160% year over year.

And if you want to go full cloud – public or hybrid – we have that as well. The broadest portfolio of all vendors.

What the biggest misconception you spend your time correcting?
Businesses already realize that it’s about more than TCO. The value of cloud comes from fast innovation. Today, 75% of IT spend is decided or at least heavily influenced by the line of business, and they want fast business outcomes.

So businesses want to work in different ways, but IT is often worried about loss of control, and think they have more control if the servers in their basement.

But working in different ways means the solutions themselves have to change, and be more open to the outside world. In the past, HR solutions were built for HR departments, not employees. CRM systems were built for the VP of sales, not built around the customer experience.

In order to innovate in the new world, there has to be a more open approach, that embraces links to partners, customers and the rest of the outside world. The companies that can embrace that “loss of control” will be the winners going forward embracing the “networking way” of doing business.

For companies that do still have doubts, we did a series of blog posts on Cloud Myth Busting that tackle typical concerns about cloud deployments, including security and control over data.

How long before your job goes away, because cloud is just a normal part of business?
I think the job title will indeed go away, soon. It’s like mobile, which has now become a commodity — it’s a given that a mobile experience is available as part of a solution.

Over time, it will be less about the delivery platform and more about the business outcomes and about co-innovation.

What do you find most interesting about current cloud trends?
It’s the speed we can make changes. Eight years ago, it took five years to introduce a new innovation. Now when something changes in the market, we can course-correct every quarter. If a company needs to change its business model, or for example they realize that they are running out of next generation talent, or whatever else is happening, they can tackle the problems with dedicated solutions within a quarter.

Business success is about innovation and agility. 52% of the fortune 500 firms since 2000 are now gone, because they were out-innovated and out-simplified. The cloud is the ultimate vehicle to drive fast innovation and keeping you in business.

For example, we’ve been able to take the new predictive capabilities of InfiniteInsight and enhance a large part of our offer in just three months. We can now offer solutions that change the game like predictive selling: discovering trends in an industry, correlating that with pipeline, and advising sales people who they should contact next.

Hybris is another example. Customers today are more informed, less loyal, and expect to be treated the same way across different channels, and so companies need an effective omni-channel strategy. This has been a trend for a while, but using cloud-based solutions make it much easier and faster to integrate and scale.

Finally, I think one of the biggest opportunities for the future is business networks. Today, Ariba is a business to business market with 1.2 million companies. But you can imagine other types of networks — for example, optimizing collaboration between companies at a people-to-people level, and this can apply to many other areas as well.