Cloud won't do for critical applications, SAP says

Its own cloud offering Business ByDesign is delayed until the company gets its strategy right

SAP does not expect mission-critical applications to move to the cloud in the near future, the company's chief technology officer said on Wednesday.

Customers are deploying development and test systems on clouds using virtualization, Vishal Sikka said on the sidelines of the company's TechEd event in Bangalore. But they are not deploying production systems on clouds because they have key requirements around reliability, integrity, disaster recovery and security, which the cloud does not currently offer.

One size cannot fit all and even five years from now customers will more likely have a mix of private clouds, public clouds and dedicated on-premise systems, Sikka added.

Instead, simpler applications are likely to move to the cloud and augment customers' current investments in technology, said Sikka.

When you deliver sales-force automation from the cloud and there is a breakdown or failure, it is not a very big issue, he said. "But if you cannot make a payroll or you cannot close your books there are very serious consequences of it," he added.

Many SAP customers are, however, already using its software to deliver cloud-based services, Sikka said.

Concerns about the reliability of service delivery from the cloud are among the reasons that SAP has taken time to roll out globally its Business ByDesign software-as-a-service, according to Sikka.

As Business ByDesign is a mission-critical business suite for midsize companies, SAP has to be first satisfied that it is able to scale the service while maintaining integrity and reliability, Sikka added.

Sikka did not disclose when the software would be available on a commercial scale. It is already being used by close to 100 customers, including some in India and China, as part of a limited rollout. Currently, SAP is delivering the service to customers from its data centers.

The company plans to partner with other companies as it scales the offering to a commercial level, said Clas Neumann, senior vice president and global head of SAP Labs.

Business ByDesign has been a challenge for SAP in more ways than one, according to Sikka. It has a new architecture that is service-oriented from the ground up, uses analytical technology extensively with main memory, separating the components inside the application and the user interface from the application, he said.

The business and pricing model and the delivery from the cloud pose other challenges. "We need time to get the basics of the business right before we take it to scale," he added.

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