Breaking Down SAP's New AI-First, Suite-First Strategy & What It Means for Customers

Key Takeaways:

• Integration + Innovation: A Suite-first approach aims to transition from monolithic ERP systems to a flexible cloud business suite.
• Data Quality Rises in Priority: High-quality data will be necessary in SAP Business Data Cloud to realize the full potential of AI-driven decision-making.
• AI in Action: SAP is integrating AI directly into business applications through tools like Joule, making AI-driven decision-making a part of everyday operations.
• Cloud Challenges and Opportunities: A Suite-first approach requires strategic data investment, careful planning, and balance between immediate business needs with long-term transformation goals.

SAP has started the 2025 financial year with a sharpened strategic focus: AI-first, Suite-first. This new direction underscores SAP’s commitment to embedding AI across its product portfolio while maintaining a unified, integrated cloud business suite. This strategy, championed by SAP CEO Christian Klein, means a stronger emphasis on innovation, customer value, and competitive differentiation in the evolving enterprise software market. As SAP moves forward, businesses can expect deeper AI integration and a more streamlined, interconnected cloud ecosystem.

The term "suite-first" doesn’t refer to a product or solution SAP customers can purchase. Rather, it’s a target state where an SAP landscape consists of modular components that work together cohesively without requiring extensive work on custom integrations. This strategy addresses common challenges SAP customers face on their journey to cloud, like complex integrations between disparate solutions, bloated data landscapes, and inconsistent data models across applications. SAP has simplified the move to cloud, eliminating these pains by launching the unified, cloud-based SAP Business Suite with connectivity across applications, data, and processes.

A central element of the suite-first approach is the transition from monolithic ERP systems to a modular cloud business suite. Instead of customers adopting a one-size-fits-all solution, SAP has developed a flexible, composable cloud business suite that allows businesses to select only the components they need while still benefiting from tight integration. S/4HANA Cloud Public Edition is the core and can be integrated with other SAP solutions. This integrated suite creates an ecosystem where customers can scale and evolve their systems at their own pace while continuing to drive business value.

Taking this approach with the newly-launched SAP Business Suite enables organizations to innovate, build, and run on SAP’s Business Technology Platform (BTP), where continuous innovation becomes streamlined and customers can take advantage of SAP’s new features on BTP like Business AI and AI for application development.

The Suite-first approach will be critical for businesses that prioritize continuous transformation, as this approach will require a suite that enables full transformations, rather than just a project solution. By going Suite-first, organizations are better equipped to manage end-to-end business processes within a single cloud-native environment powered by SAP BTP.

SAP’s AI-First Dimension

A large part of SAP's AI strategy is embedding AI capabilities across its entire portfolio with a clear emphasis on practical business outcomes and productivity improvements. The vision is to create an environment where AI doesn't just augment human capabilities but transforms how enterprise software delivers value. For SAP customers, AI-first means leveraging Business AI and Business Data Cloud across the entire portfolio.

Under this new direction, high data quality becomes a top priority, serving as the foundation to delivering trusted AI results.

​​SAP CEO Christian Klein has underscored the company’s commitment to AI as a cornerstone of its product strategy. SAP’s AI copilot, Joule, is poised to redefine the user experience, acting as both a digital assistant and a productivity engine for cloud software users. Joule is evolving to leverage cooperative multi-agent systems, enhancing its ability to tackle complex business challenges.

Unlike traditional AI implementations, SAP is embedding AI directly into business applications, ensuring AI-driven decision-making is an integral part of enterprise workflows.

Unlocking Unified Insights with SAP Business Data Cloud

With data as a foundational pillar of SAP’s strategy, the company launched Business Data Cloud in February to harmonize data across SAP and non-SAP systems, reducing the complexity of data integration. Unlike its predecessor, Datasphere, which required customers to set up and manage their own data environments, Business Data Cloud delivers embedded integrations (e.g. Databricks) to enhance AI-driven insights and decision-making.

For SAP Business Warehouse (BW) customers, Business Data Cloud offers a transition path rather than an outright BW replacement, focusing on connecting BW models with Datasphere and third-party data sources. BW customers can utilize a hybrid transition path to enable the staged adoption of Datasphere.

Key features include:

• Zero-copy delta sharing to allow ML notebooks within the SAP environment
• Insight Apps with prebuilt content including SAC story visualizations managed by SAP
• Datasphere + SAC integration as a semantic layer while SAC provides visualization for Insight Apps.

With these features, SAP customers can unlock data and AI-driven insights with less complexity, for faster, more integrated, intelligent decision-making.

What “AI-first, Suite-first” Means for SAP Customers

The focus on cloud has raised concerns among on-premises customers who feel left behind in terms of innovation, with the company's emphasis on S/4HANA Cloud Public Edition as the centerpiece of its strategy creating pressure for organizations to accelerate their cloud migration plans. SAP, recognizing the complexity of this transition, is taking a pragmatic approach by directing many integrations and announcements toward S/4HANA Cloud Private Edition as an intermediate step. This acknowledges the reality that many large enterprises cannot immediately shift to a public cloud model.

“To take full advantage of this strategy, CIOs and data leaders should prioritize data excellence as the foundation of their SAP transformation,” commented Javeed Nizami, Syniti CTO.

“Data quality and governance practices need to support both operational needs and AI requirements. Without clean, well-structured data, even the most sophisticated AI capabilities will deliver disappointing results. Syniti's Data First approach really complements SAP's vision by addressing the foundational element often overlooked in digital transformations: data quality and AI-readiness. Our platform provides a solution that aligns with SAP's strategy and supports continuous innovation.”