Companies will move their core human resources (HR) IT systems from their datacentres to the public cloud with six years, it was claimed this week. Businesses are moving their HR systems to public cloud with increasing speed, said Mike Ettling, global head of cloud and on-premise HR at SAP.
Research from analysts has suggested that 70% of HR leaders plan to replace their technology in the next two years. “If you look at the age of HR systems on-premise, the peak of innovation was five years ago. All the market dynamics indicate a massive move to HR in the cloud,” he said. Ettling predicted there would be significant interest from small and medium-sized companies in cloud-based technology. “That is a market no-one has touched yet, which we are going to start addressing aggressively in 2015,” he said in a briefing to analysts in Amsterdam.
In emerging markets such as Hungary, the Baltics and Ukraine, companies are leap-frogging on-premise HR technologies altogether and moving directly to cloud services. In emerging markets, companies are leap-frogging on-premise HR technologies altogether and moving directly to cloud services. “We have seen emerging markets quit copper wire and go to mobile. I see the same trend [in HR technologies], skipping on-premise and doing straight to cloud.” But the timetable for multinational companies to move to cloud services will be slower, he conceded, given their investments in legacy technology. “When you are a 30,000-strong multinational, you can’t do that in less than 18 months. Budgets and business cases will take time,” he said.
SuccessFactors, SAP’s HR technology company, faces aggressive competition from cloud-based rival Workday in North America, in what Ettling describes as a “dog fight”. But in Europe and the rest of the world, Ettling claims SuccessFactors is easily ahead of the game. “We are winning. We are building momentum in our business and we are getting our story right,” he said.
Ettling denied suggestions that the company has been slow to adapt its technology to meet changes in the way companies appraise their staff. The company has introduced innovative learning capabilities in 2014, and plans major changes to its technology for appraisals and succession planning next year, he revealed. Thomas Otter, vice-president for product management at SuccessFactors, said the company is catching up rapidly with its rival’s technology. “The space where Workday seems to have a competitive edge is shrinking every three months, and every three months we take on new capability,” he said. SuccessFactors has strengths in global benefits and payroll for multinational companies that Workday cannot match, according to Otter. “We massively respect our competitors. They are genuine and very smart people, but we are burning our own track,” he said
