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Financial Mirror (Cyprus) - - FRONT PAGE -

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.”

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