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Cloud Migration Expands France’s SAP Ecosystem

Large companies partner with providers to adopt cloud hosting and S/4HANA while midmarket evolves more slowly, ISG Provider Lens report says

The SAP services market in France is growing as more enterprises migrate to SAP S/4HANA and the cloud for greater agility and resilience, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

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“In-house management of SAP applications is becoming a thing of the past in France”

The 2022 ISG Provider Lens™ SAP Ecosystem report for France finds many companies in France are turning to service providers for the expertise and resources they need to transform their SAP deployments and manage SAP applications. The growing complexity of SAP systems and the need for cloud hosting have triggered major migrations by large enterprises, though midsize companies remain more cautious, the report says.

“In-house management of SAP applications is becoming a thing of the past in France,” said Lyonel Roüast, partner and president, ISG SEMEA. “Many companies still retain their traditional ERP, but the move toward managed services contracts has strong momentum.”

The COVID-19 pandemic boosted French interest in cloud services after many companies found it hard to ensure the availability and security of their information systems at the height of the crisis, the report says. SAP applications, which are often critical to business, have been among the first entrusted to cloud infrastructure.

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“Enterprises in France are finally recognizing the capabilities of cloud service providers,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Most still favor private clouds, but hybrid clouds are gaining acceptance.”

At the same time, the increasing complexity of SAP solutions has overwhelmed the IT departments of many companies in France, ISG says. This trend is generating more interest in the sophisticated tools available through SAP S/4HANA, SAP Business Technology Platform (BTP) and the RISE with SAP program. Service providers are becoming major partners in rolling out these solutions. However, some SAP customers in France are still wary that BTP and RISE with SAP will tie them too closely to SAP.

Companies in the French midmarket are taking a different approach to both SAP modernization and service provider selection, the report says. Most midsize SAP customers are still using the traditional ECC6 ERP suite, which SAP plans to stop maintaining in 2027. They have not begun using the cloud and are apprehensive about making major changes. The French midmarket also more strongly favors local providers due to proximity, ease of interaction and the absence of a language barrier.

The report explores a wide range of trends in the French SAP ecosystem, including the importance of customization capabilities, the talent crunch facing service providers and the differing strengths of global and local providers.

The 2022 ISG Provider Lens™ SAP Ecosystem report for France evaluates the capabilities of 29 providers across four quadrants: SAP S/4HANA System Transformation, Managed Application Services for SAP ERP, Managed Platform and Cloud Services for SAP, and SAP Business Technology Platform.

The report names Accenture, Atos and Capgemini as Leaders in all four quadrants. It names DXC Technology and TCS as Leaders in two quadrants each and IBM, oXya and T-Systems as Leaders in one quadrant each.

In addition, T-Systems is named as a Rising Star — a company with a “promising portfolio” and “high future potential” by ISG’s definition — in two quadrants. PASàPAS and Wipro are named as Rising Stars in one quadrant each.

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