Dive Brief:
- SAP added its sales and expense tracking solutions to the GROW with SAP ERP migration incentive program Monday in an ongoing push to drive customers to a service-based software consumption model.
- The software vendor embedded the Sales Cloud CRM solution and the Concur Expense application in its ERP package for small and midsize businesses, Jonathan Rhodes, SVP and head of product marketing for SAP S/4HANA Cloud Public Edition, said in a Monday blog post.
- SAP has ramped up efforts to coax customers to the cloud in recent months, as termination dates for on-prem ERP support services near. Bundling SaaS solutions with migration support through GROW with SAP and the RISE with SAP program for larger enterprises has been central to those efforts.
Dive Insight:
SAP will begin sunsetting on-prem ERP maintenance support across several of its core products next year as part of a broad restructuring plan that prioritizes service-based software delivery. But a significant segment of the vendor’s existing customer base is likely to blow past current migration deadlines.
GROW with SAP, a greenfield ERP package introduced in March 2023, mirrors RISE with SAP, a migration enticement program for enterprise customers rolled out in 2021. Both bundle the S/4 HANA public cloud edition with SAP’s Business Technology Platform solutions and migration acceleration services.
“When they decided to go cloud-first with S/4 HANA, they wrapped that package around the RISE program,” Scott Bickley, advisory practice lead at Info-Tech Research Group, said.
SAP is taking a similar approach in its pitch to SMBs. “They’re blending front-office functionality with core back-office ERP capabilities,” Bickley said.
The strategy might dissuade customers from going to Salesforce or another CRM competitor, Bickley noted. “Midsize companies aren’t in the business of building systems — the fewer vendors they have to manage, the better,” he said.
Monday’s announcement is a bid to regain traction with medium-sized companies, Forrester VP and Principal Analyst Liz Herbert told CIO Dive via email.
“Midsize buyers have typically gravitated to all-in-one solutions,” Herbert said. “This approach makes it easier to get the value out of an integrated suite and simplifies the selling, deployment and management.”
The Sales Cloud CRM and Concur application are only included in the premium GROW with SAP bundle, along with HR, engineering and supply chain solutions. Bickley expects SAP to continue adding features to the package as time allows.
“SAP is a big ship to turn,” Bickley said. “As their product roadmap is evolving, they’re starting to see these opportunities, but they can only do so much at one time.”
The company is contending with a potential bottleneck, as tens of thousands of legacy customers look to initiate an ERP migration.
“They’re dealing with about two-thirds of their legacy customer base still running on-prem and layering AI into everything,” Bickley said. “So that's taken up probably the lion's share of SAP’s time.”
