Press Release

Brazil Slow to Upgrade SAP as Support Deadline Looms

ISG Provider Lens™ report finds Brazilian enterprises waiting for incentives before upgrading to S/4HANA for Business Suite on HANA

Company Release - 8/22/2019 7:00 AM ET

SÃO PAULO, Aug. 22, 2019 /PRNewswire/ -- Enterprises in Brazil have been slow to upgrade their SAP installations to S/4HANA or Business Suite on HANA, even as older installations will no longer be supported after 2025, according to a new report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2019 ISG Provider LensSAP HANA and Leonardo Ecosystem Partners Report for Brazil finds many enterprises in the country buying new HANA licenses to stay compliant with licensing terms, while not planning to upgrade their old systems. Enterprises making upgrades are often opting for so-called brownfield deployments, in which new SAP software packages must coexist with legacy software. These businesses are using conversion tools to transfer their configurations and customizations to BW on HANA, the report says.

An estimated 1,300 SAP systems should be converted to S/4HANA or BW on HANA before 2025, the report notes. "Large enterprises are waiting for SAP incentives to update, or they are quietly betting on an extension to the 2025 end-of-support date," said Esteban Herrera, partner and global leader of ISG Research. "SAP partners are enthusiastic about the revenue stream that would come from widespread upgrades, but they worry that by waiting, enterprises will cause a logjam that opens the market up to competitors."

While adoption of new SAP tools has been slow in Brazil, the potential market in the country is large, the report says. Since 1996, SAP has won more than 3,700 customers in Brazil, and its partners employ more than 13,000 SAP consultants there, according to the report.

Although many large enterprises are opting for brownfield upgrades, the midmarket in Brazil often adopts S/4HANA as a greenfield project, in which the software is deployed as a new package. Midmarket companies are adopting SAP software to replace in-house systems or obsolete packaged ERP systems, the report says.

While the report shows a slow upgrade path in Brazil, it finds a robust managed services market for maintenance, enhancement and operations. The managed services market for SAP products is a highly competitive market, with many companies fielding teams of 150 to 1,000 consultants.

The 2019 ISG Provider Lens SAP HANA and Leonardo Ecosystem Partners Report for Brazil evaluates the capabilities of 36 providers across six quadrants: SAP S/4HANA & Business Suite on HANA Transformation — Large Accounts; SAP S/4HANA & Business Suite on HANA Transformation — Midmarket; SAP S/4HANA & Business Suite on HANA Managed Services; SAP BW/4 on HANA and BW on HANA Transformation & Operations; SAP Leonardo Transformation, and SAP HANA Cloud Infrastructure and Platform Services.

The report names Tech Mahindra a leader in five quadrants; Accenture, Atos, IBM and T-Systems as leaders in three quadrants, and FH, Infosys, Softtek and Sonda as leaders in two. AWS, Cast group, DXC Technology, ITS Group, Microsoft Azure, Resource, SAP Consulting, Seidor, SPRO and TIVIT are all named leaders in one quadrant.

Customized versions of the report are available from FH and T-Systems.

The 2019 ISG Provider Lens SAP HANA and Leonardo Ecosystem Partners Report for Brazil is available to ISG Insights™ subscribers or for one-time purchase on this webpage.

About ISG Provider Lens™ Research
The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe and Latin America, as well as in the U.S., Germany, the U.K., the Nordics and Brazil, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

The series is a complement to the ISG Provider Lens Archetype reports, which offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.

About ISG
ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 70 of the top 100 enterprises in the world, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry's most comprehensive marketplace data. For more information, visit www.isg-one.com.

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SOURCE Information Services Group, Inc.