Overview of SAP’s Cloud Strategy

Just five years ago, many companies were skeptical about the concept of getting business software from their telephone socket – otherwise known as cloud computing. But thanks to rapid data transmission, more powerful hardware, and improved security, an increasing number of organizations are deploying on-demand software.

SAP Business ByDesign is the first fully-fledged ERP suite coming from SAP that users access and work with through the Internet. From accounting and purchasing through production, SAP Business ByDesign maps all the processes that exist within an organization. Server racks in company basements are a thing of the past. SAP takes care of the hosting.

In addition to SAP Business ByDesign, SAP offers other on-demand applications such as SAP Carbon Impact, SAP Sales OnDemand, and SAP BusinessObjects BI OnDemand. The software is designed for different activity areas and profiles and is aimed at employees and large companies who wish to use the application as an enhancement to their existing core solution. However, SAP also targets small businesses and midsize companies, who – with the cloud application – gain a particularly practical and cost-effective way of using business software and thus managing their business processes. Prices and licenses are flexible and can be tailored to meet the individual needs of each customer.

The benefits of open standards

On-demand solutions form part of SAP’s product strategy, which also comprises on-premises software such as SAP Business Suite and on-device applications for mobile devices. One of the great advantages of on-demand solutions is their openness: They can be integrated with on-premises software as hybrid applications and also operated optimally using smartphones and tablet PCs like the iPhone or the iPad.

In mid-2011, SAP released a software development kit (SDK) for SAP Business ByDesign. On this basis, partners can develop special add-ons. These mini applications are available in the SAP Store, where SAP Business ByDesign customers can buy them. Thanks to open standards, the applications can be integrated easily with other systems and back ends. For more information on this topic, see the article, “Business ByDesign: Add-on Infinitum”.

Cloud strategy

Customers can choose between three options: private, public, or hybrid cloud. SAP’s cloud strategy is divided into three areas: suite on-demand with SAP Business ByDesign, line-of-business (LoB) on-demand solutions, and content and collaboration on-demand solutions. LoB comprises applications such as SAP Sales OnDemand, SAP Travel OnDemand, SAP Sourcing OnDemand, or SAP Carbon Impact. The content and collaboration area includes solutions such as SAP StreamWork, SAP BusinessObjects BI OnDemand, SAP EHS Regulatory Content, and future products coming out of the Crossgate acquisition.

Technology platform

The technology platform comprises the “core” architecture based on ABAP, the “edge” architecture based on Java, and the SAP HANA database as well as shared platform services. In the future, SAP’s cloud applications should be able to take advantage of in-memory technology (see the article “HANA: The Bigger Picture”). The combination of hardware and software makes it possible to store data or databases in the working memory, where they can be accessed much faster.

The core comprises the LoB and the industry-specific applications. The edge includes all the SAP apps and collaboration software such as SAP StreamWork.


Security is a key topic with cloud software. After all, customers don’t want sensitive and highly confidential company data getting into the wrong hands. All SAP’s on-demand applications are certified in accordance with ISO 27001, SAS 70 Type II, and ISAE 3402, and meet current security standards. This also applies to the data centers in Walldorf and St. Leon-Rot, Germany, where the solutions are hosted. All the entrances and exits are secured using biometric fingerprint scanners, video cameras, and sensors.