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A Modular Platform-as-a-Service

SAP Business Technology Platform is a Platform-as-a-Service which can be used to integrate SAP and non-SAP systems in the cloud and on-premise (with SAP Integration suite), or to extend side-by-side with existing systems in order to provide greater functionality to an older system (with SAP Extension Suite). 

Other key components of the package include SAP HANA Cloud, SAP Analytics Cloud, SAP Business Planning and Consolidation, SAP Intelligent RPA, SAP Conversational AI, and SAP IoT.

SAP BTP replaced and expanded on SAP Cloud Platform in March 2021 and forms the technological foundation for Rise with SAP: the company’s subscription-based “business transformation as a service” which aims to simplify the process of digital transformation and cloud service adoption.

It is just over a year since this change, so IgniteSAP is looking this week at how SAP BTP is contributing to SAP’s long-term strategy of accelerating cloud adoption. For information on how to train and qualify to implement SAP BTP read this article from IgniteSAP.

The Structure of SAP Strategy

Like the software itself, we can look at SAP’s long-term business strategy as a hierarchical structure which can be broken down into constituent parts. Each of these parts contribute to the functioning of parts further up the hierarchy: and each part is also made of parts which allow it to perform its own functions. 

This structural hierarchy is not only found in software, but in business (and just about everywhere else) so it is an extremely useful concept for assessing SAP’s corporate strategy because consciously or unconsciously, business managers and software engineers are influenced by this idea in their approach to dealing with complexity. 

Regular Revenue Streams

To begin with we can consider one goal of SAP as a technology corporation. Like any other business it is not just to “make as much money as possible” but to create stable and regular revenue streams, and in such a way that these expand in number and capacity.

SAP aims to expand market share, but also expand the market, and stake a claim in emerging markets. 

Historically, SAP sold a software solution to a customer and then (perhaps) they would have the opportunity to make another sale some years down the road when that customer wanted to upgrade the functionality of their system.

In order to drive investment for growth SAP needed to have an even more stable and more predictable revenue. With the advent of the internet and then of cloud computing the emphasis of the product, and consequently the transaction, changed. 

With the move from on-premise to the cloud, the sale is not of a product to be installed in a physical location, but rather a periodic charge for continued access to a suite of services and functions.

This is good from SAP’s perspective because this means a more predictable, more diverse sources of revenue. The predictability of this income meant that SAP was more able over the last decade to allocate large amounts of capital to long-term investments like acquisitions of companies with complimentary technologies and new product development.

Customers Always Need Persuading

SAP now faces a customer base which understands the need for change, and the advantages of changing from on-premise implementations to cloud-based service provision: but customers have to be persuaded beyond the threshold of their unconscious bias towards their already-working IT software and infrastructure. 

SAP’s long-term corporate strategy is manifested within a hierarchy or scaffold of software solutions that act as a set of stages in the customer lifetime: from limited investments in single solutions that feel safe, to being fully invested in the integrated set of SAP solutions and services. 

As long as the services represent good value, and add to the viability and resilience of the businesses belonging to SAP customers, this is a mutually beneficial arrangement. However, SAP customers don’t know that intuitively until they experience it, and so they are asked by SAP to take several smaller jumps towards being fully invested in SAP. This has the added benefit of being less disruptive during each implementation phase, particularly if the software is designed in such a way that it is modular and can be integrated as a series of extensions: as is the case with SAP BTP.

Use of SAP Products Accumulates

In SAP’s 2nd Quarter Financial Report for 2021 Christian Klein illustrated the cumulative effect that SAP experiences as customers adopt SAP products:

“Strong Rise momentum leads first to strong adoption of S/4HANA Cloud and our Business Technology Platform… through our Business Technology Platform customers then adopt our integrated line of business applications.”

Customers choose to adopt SAP BTP because they have Rise, but equally they may also have chosen Rise because they were interested in SAP BTP. The SAP Business Technology Platform also has a free tier option and a Pay-as-you-go option for a similar reason. SAP is confident that exposure to SAP software leads to further adoption of other SAP products.

Confirmation bias is partially responsible for the inertia that causes potential customers to be wary of new SAP products and, paradoxically, confirmation bias also helps lead them to adopt new SAP products when they have had a positive experience of SAP.

Technology for Cloud Growth

SAP Business Technology Platform is a crucial part in the hierarchy of SAP’s long-term business strategy as it is the technological foundation for Rise with SAP. As we have seen, this group of cloud-based business process software components, which includes a centralised database, analytics, Robotic Process Automation and others, provides a Swiss army knife of tools which can be used to quickly set up entirely new systems or bolt on extra capabilities in a modular fashion. 

SAP has also taken great strides towards empowering developers and non-technical users with the ability to formulate their own extensions and solutions to their own business needs. 

By creating a myriad of cloud-based tools for business, and even providing the means to address entirely unique business needs, SAP is directly addressing the needs of their users, while simultaneously encouraging them to take the necessary steps towards becoming intelligent enterprises that can adapt to the economic conditions of the future. 

SAP has created a wide variety of routes into the adoption of their products, and this latest evolution in their provision of software solutions for business gives users the widest possible selection of choices, while still guiding them towards success in their transformation into cloud-based enterprises. 

Are you looking to find a new role in the cloud-based SAP ecosystem? Then get in touch with IgniteSAP and our team of expert advisors will guide you through the process of finding your ideal position to fulfil your career ambitions.