SAP Cloud, Application Strategy Taps Into SuccessFactors Acquisition

At its Sapphire conference, SAP unveiled an accelerated cloud strategy for four business categories based in part on its acquisition of SuccessFactors in February.

SAP is rolling out a suite of cloud-delivered applications that are tied to its February acquisition of SuccessFactors. The strategy is to offer cloud computing and application services for businesses in four specific categories: people, money, customers and suppliers.

SAP executives detailed the company's new cloud offerings at the Sapphire Now conference, which kicked off May 15 in Orlando, Fla. The new cloud-based suite of services is another stage in SAP's evolution, as it moves away from being an on-premise software provider to a company that offers applications and services through the cloud that can be delivered to any device, anywhere.

The first new offering is the people solution, which combines SAP's payroll management software with SuccessFactors' human resources offering, called Employee Central. The money solution manages corporate financial processes, including order-to-cash and invoice-to-pay, as well as travel expenses. It also integrates with Employee Central.

The customer solution offers customer relationship management (CRM) capabilities that SAP says go "beyond the outdated capabilities of existing cloud-based sales force automation tools" by adding social media capabilities, such as the SAP Social Customer Engagement OnDemand application. It also integrates with on-premise SAP applications such as its Business Suite software and a CRM product. Finally, the supplier solution is based on the SAP Sourcing OnDemand solution for strategic sourcing, supplier and contract lifecycle management.

SAP's cloud strategy shows that the on-premise based enterprise software company is getting serious about the cloud, according to a blog post by Forrester analyst Stefan Ried.

"SAP's new cloud strategy is all about business applications in large enterprises," Ried said. "[It's] a significant move to offer business applications for large enterprises rather than just SMBs [small and midsize businesses] and a few niche cases."

The announcements at Sapphire Now and the SuccessFactors acquisition highlight the rivalry between SAP and, which delivers CRM and other business applications in a software as a service (SaaS) model. CEO Marc Benioff and SAP Chairman Hasso Plattner famously debated cloud versus on-premise software in a public forum in Silicon Valley in 2008. Benioff said SAP's on-premise platform was outdated, while Plattner said customers want to be able to customize software for their unique needs, something they can't do with a cloud-delivered application.

SAP is also developing its cloud strategy to compete against Oracle, whose CEO, Larry Ellison, initially also dismissed cloud computing, but in February acquired Taleo Corp., a maker of cloud-based HR software, for $1.9 billion.

SAP also announced at Sapphire Now support for another growing trend in the enterprise with a new series of mobile software applications for interacting within the enterprise and with customers. The business applications address travel expense management, training, preparing for a customer briefing and workplace safety. The consumer mobile apps enable mobile banking and mobile payments.