Analyst Firm Warns Users Need To Understand What They’re Buying
Embarking on the journey of cloud migration is no small feat. Understanding the potential risks and rewards associated with different cloud strategies is essential as industries continue digitalizing. Here, we will highlight the potential risks of losing control over operational costs and how to navigate these complexities.
RISE with SAP: A New Era of Cloud Migration
The German software giant SAP has positioned one of its methods for cloud migration as a one-stop solution for businesses aiming to transition their systems to the cloud. This program, known as RISE with SAP, is designed to transition legacy applications, like the common ECC platform, to SAP’s latest S/4HANA smoothly. RISE with SAP is not a monolithic program. It offers different variants tailored to the specific needs of businesses. These include options for public cloud, private cloud, and a “bring your model.” Each option carries unique benefits and risks that companies need to understand.
A Shift from Capital to Operational Expenditure
One significant change in adopting RISE with SAP is the shift from a capital expenditure (capex) model to an operating expenditure (opex) model. This change can significantly impact how organizations account for and report their IT spending. It can also shift the control of specific cost components from the user to SAP, reducing the client’s control over running costs from an IT operations perspective.
Addressing the Risks of the Private Cloud Variant
Organizations considering the private cloud variant of RISE with SAP need to understand the various risks; for instance, the total cost of ownership of an ERP system transitions to the total cost of operation with RISE services. This shift can impact future budgets, control, and, ultimately, the IT department’s influence. While some argue that returning to on-prem is cheaper, analysts advise that the transition is costly. So, what is the future?
The Cloud Is the Future
Since its launch in 2021, RISE with SAP has undergone several changes, including new SKUs, product variants, and license entitlements. In its Q2 results in July, SAP reported that customers worldwide continue to choose RISE with SAP for their end-to-end business transformations. The cloud is the future, and businesses must adapt to stay competitive. SAP’s cloud-first approach aligns with industry trends worldwide. However, organizations need to understand the nuances of this model, including the financial implications of moving from capex to opex, to make informed decisions.
Before embarking on your cloud migration journey with SAP, it’s essential to understand what you’re buying. So, PCX encourages you to take the time to evaluate different options and choose the one that best aligns with your operational needs and financial expectations. If you need more honest advice on technology, we ensure that only the highest quality products are delivered. Search our electronics inventory today or call us Toll-Free at 800-993-9047 and International at 714-374-3070–we’ve got your back.