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Investing in Infrastructure Modernization
Based on our evaluation of the guidance to date, SAP believes that this funding is ideal for the modernization of core systems.
As a result of fund freezes and eventual revenue downgrades, many long-term capital projects to modernize critical on-premises business systems such as ERP (including procurement and expense management) and Human Capital Management tools (including external workforce management), were slowed or halted altogether as funds were shift- ed to support critical and direct pandemic-response efforts.
The influx of funding in the form of ARPA represents a critical opportunity to expedite modernization efforts. Public sector organizations can utilize the funding to move aging on-premises systems to more reliable, secure, flexible, and dynamic cloud-based functionality. By doing so, governments stand to leverage significant long-term TCO benefits from the proven cloud migration models available from experienced business application providers. With a shift to OpEx-focused cloud expenditure model, organizations are essentially amortizing and often reducing the mixed long- term CapEx/OpEx cost of software licensing and maintenance. Additionally, by transitioning to a “fit-to-standard” public cloud service or a private cloud system operating on a hyperscaler, organizations can avoid the significant expense and resource investment of periodic “lift and shift” on-premises upgrades.
Underscoring this opportunity is the ARPA investment goal of reducing long-term operating costs, recommended by the Government Finance Officers Association and other independent, non-profit organizations.
SAP customers experience a 75% lower TCO by moving to a public cloud model
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