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With the IT cloud services segment in the emerging markets expected to grow at nearly double the rate of the developed economies over the next few years, Cyprus and Greece, too, are seen as experiencing newfound growth, but not until well into 2016.
In an interview with the Financial Mirror, Hans-Peter Fuelle, Vice President and Head of Cloud and LoB SAP South Europe acknowledged that in times of crisis, there is an initial cost that some companies cannot afford to move to cloud, but there are also funds available.
“There are significant funds form the EU, structural and investment funds, that support SMEs in their information and communication technology (ICT) investments,” Fuelle said, explaining that Greece and Cyprus have used significant funds to support local SME with their digitisation.
“However, a challenge remains where the EU does not wish to fund ‘operational costs’, and cloud is of course shifting the infrastructure investment into service payments. Therefore the EU rules partly hold SMEs back from fully moving to the cloud. This is something which we hope the EU will address in the coming months.”
Fuelle said that the use of cloud solutions is still pretty much in its infancy in Cyprus, so there are no clear market segmentation trends appearing yet.
“However, early indications suggest that Cyprus mid-sized SMEs seem to be the first to engage with cloud solutions for peripheral systems which is an interesting phenomenon. Other industries, like banking, are still pretty reserved on the issue compared to banks across the EU which have adopted considerable cloud solutions to address various line of business challenges. Nevertheless, we expect a significant market adoption in Cyprus over the next 18 months.”
“Across Europe, Middle East and Africa (EMEA), we do not see any real trends in specific industries or size of organisation adopting cloud more quickly than others,” Fuelle said, adding that the repeated pattern is of companies looking to extend their existing technology investments with cloud applications and infrastructure to enable new processes and unlock new insights or reach new markets that are not possible or efficient at scale in on-premise environments.”
According to a study carried out by analyst firm IDC in 2013, the United States will remain the largest public IT cloud services market, although its share will decline from 56.9% in 2013 to 43.9% in 2017, while Western Europe, Latin America, and Asia/Pacific will each gain share throughout the forecast. Cloud spending in emerging markets is expected to experience a compound annual growth rate (CAGR) of 37.3% for the 2013-2017 period, a rate almost twice that of developed markets.
“In line with this forecast, we are certainly seeing a huge appetite (and update) from our customers across Europe for SAP’s Cloud solutions,” Fuelle said.
As of Q3 2014, SAP is the fastest growing enterprise cloud company at scale with 41% growth – beating both Oracle and Salesforce, he said.
SAP’s annual cloud run rate exceeds EUR 1.3 bln ($1.7 bln), with more than 44 mln cloud users on the market’s leading public cloud application portfolio, while SAP Jam is the leading social business platform with over 15 mln users.
“The benefits of the cloud are attractive to companies of all sizes. Companies are increasingly looking to invest in the cloud as their innovation platform – as a way to enable new processes and achieve new insights that enable them to run their business in an entirely new way – not just do the same old things using a different delivery model,” Fuelle explained.
“SAP has all the right assets to enable this. Our cloud portfolio is the most comprehensive in the industry, covering all lines of business across industries for businesses both large and small.”
“But perhaps most important, SAP recognises that the cloud is not an either-or proposition or one size fits all. Our solutions are designed to help our customers start anywhere and go everywhere, depending on their business needs,” he said.
In terms of average savings impossible to answer, Fuelle said.
“The most common misconception that we hear is that ‘Cloud is all about IT’ and ‘Total Cost of Ownership’. The reality is that cloud is far more than this. It is about driving new levels of process efficiency, collaboration, and insight. And, while it certainly offers a cost advantage, the real benefit of cloud comes in two flavours: innovation and agility, to quickly adapt processes to capitalise on changing market dynamics and stay ahead of the competition.”