What is the secret behind successful companies? Clearly, there are many factors, but there is no doubt that innovation is one of the most important these days.

One way in which a company can innovate and scale its business is through digitalization, moving from a solely on-premise business to a cloud-based intelligent enterprise. To support companies, SAP provides a fast and flexible path to the cloud, driving the implementation of innovative business processes. And the cloud extension policy from SAP can help achieve this while allowing businesses to seamlessly move to the cloud at their own pace.

Whether to optimize human resources (HR) procedures, business-to-business transactions or other enterprise-wide processes, the cloud extension policy allows customers to move their on-premise processes onto a hybrid cloud solution. This offers customers the opportunity to flexibly adapt their landscape to changing business requirements. Benefits of this policy include optimization and automation of certain processes in order to become more efficient, the creation of data-driven insights to help improve business outcomes, and the acceleration of speed to value.

One SAP customer, a large player in the Australian energy and natural resources industry, was able to undergo a digital transformation while optimizing costs by purchasing a cloud extension of SAP Ariba software. This enabled the company to facilitate data-driven insights to make conscious purchase decisions and to optimize cost control as well as spend and risk management.

With the company’s move to the cloud, triggered by its quest for digitalization and innovation, some of its supplier relationship management (SRM) users were no longer needed. Therefore, by leveraging the cloud extension policy, it was able to terminate redundant SRM users and reallocate on-premise maintenance payments to the cloud. This process optimized its resource allocation to unlock value for its business. Additionally, the new hybrid solution was fully integrated between cloud and on-premise applications, offering seamless delivery and support as well as full control over the application landscape. Not only did the customer receive the opportunity to reduce its total cost of ownership, it can now access solutions from anywhere on any device, thereby getting the best of both worlds in its landscape.

With this integrated approach, customers gain the flexibility, choice, and efficiencies needed to innovate for growth across their entire business. See further recent examples of customers leveraging the cloud extension program here.

To take advantage of the cloud extension policy, the following requirements must be fulfilled:

  • The cloud solution must be eligible for the hybrid cloud strategy. A respective overview can be found here.
  • The terminated licenses must be in the scope of the extension policy. Typically, all on-premise licenses covered with SAP Enterprise Support, SAP Standard Support or SAP Product Support for Large Enterprises are in scope.
  • The transaction assumes an expanded investment with cloud solutions from SAP, given the substantial added value from this new hybrid scenario.

View the full list of requirements here.

SAP offers the cloud extension model for public cloud solutions, and also provides a model for SAP HANA Enterprise Cloud service subscriptions as well as the on-premise extension model. This allows customers to evolve their existing on-premise software with solutions from SAP HANA Enterprise Cloud or other solutions from the on-premise SAP portfolio. More information is available here.

Thomas Spandl is senior vice president and head of M-GTM at SAP.