Update: If you’re interested in SAP on SmartCloud Enterprise and Enterprise+, check out this webcast happening Monday, July 23, led by IBM execs and industry expert Mike Vizard: http://bit.ly/LOvVja.
May 2012, SAP announced a new cloud computing strategy
SAP offers one of the most common workload solutions in Europe and the US, and SAP already announced a new cloud strategy; SAP acquired Ariba, Inc., a software company, in May 2012 to strengthen SAP’s cloud capabilities.
Lars Dalgaard, former CEO of SuccessFactors, which was taken over by SAP at the beginning of 2012, is now the leader for cloud computing at SAP; 5,000 SAP employees will work on development and delivery of cloud solutions in the future.
SAP SaaS solution: Business ByDesign and CRM RDS
SAP had a real cloud offering in place. SAP Business ByDesign is a software as a service (SaaS) ERP solution for small and medium size companies with a per month or per user price model. At the beginning of 2012, SAP had approximately 1,000 customers, as they mentioned. There are rumors that SAP will increase the minimum number of users from 10 to 25 to increase license revenue, an indicator that it’s not really successful.
SAP built a cloud data center in St.Leon-Roth, Germany. If that is enough to cover the customers in North America and Asia Pacific will be seen in the future.
At the beginning of 2012, SAP and IBM announced a cloud solution for customer relationship management (CRM) called SAP CRM rapid-deployment solution on the IBM Cloud (SAP CRM Live). It’s an SAP CRM solution hosted by IBM.
The main features are:
- Low cost: SAP CRM Live is significantly less expensive than traditional (on-premises) applications. It provides access to an SAP CRM application with the latest functionalities at an affordable price, from 60 Eur (approximately 75 USD) per month per user).
- Rapid implementation by IBM Global Business Services: With SAP CRM Live, the Integration phase is much shorter than with traditional projects.
- SAP CRM Live is always up-to-date: The whole version-upgrade problem disappears and customers benefit from new innovative features over time.
- Integration is guaranteed: For all customers with an existing SAP ERP information system, integration is guaranteed. The consistency of the data model with SAP ERP is guaranteed.
- Performance: Performance is monitored by IBM through different service levels
- Information security and confidentiality: These remain in IBM focus.
- Service continuity: This is an IBM commitment.
What about productive SAP ERP environments?
Productive SAP environments proliferate and the functional scope of SAP applications expands.
CIOs are looking at how they can reduce infrastructure costs and complexity while supporting improved service-delivery speed and quality. The main pain points are
- High total cost of ownership (TCO) and complexity involved in managing SAP systems
- Inflexible and lengthy SAP service delivery cycles affecting time to innovation
- Need to effectively address SAP service quality issues
A cloud environment helps organizations to reduce the cost up to 20 percent or more and to reduce complexity involved in managing SAP systems, and facilitating increased flexibility to support business growth. A cloud environment for a productive SAP system should be a highly virtualized private-dedicated or private-shared cloud infrastructure that can be tailored to specific business requirements aligned with business-centric service-level agreements (SLAs).
In addition, a cloud environment should automate common labor-intensive tasks associated with managing complex software environments, helping to improve service quality and the speed of SAP provisioning, and make more efficient use of SAP skills and resources.
One important point to consider is flexible pricing options based on the resource consumption.
Starting 31 August 2012, an IBM offering for SAP Productive Environments is available called IBM SmartCloud for SAP Applications, which is based on IBM SmartCloud Enterprise+.
Find more information in the IBM SmartCloud for SAP Applications announcement letter.
SAP and the bookseller
SAP, although, offers Business All-in-One for Linux and Windows, in addition to SAP Rapid Deployment Solutions and BI Solutions from the SAP-BusinessObjects-Portfolio for Windows Server 2008 R2, at Amazon Web Services (AWS).
From my point of view, a SAP customer should have two major concerns:
- Where is my data? Amazon has three data centers in the US, one in South America, one in Europe, two in Asia Pacific, and you couldn’t be sure that your data resided in the data center you chose. For a customer, it’s a nightmare not to know where data is.
- What kind of performance and stability? SAP has very heavy system requirements and when I look at the offered configuration I doubt that it will be run with good performance. During the last month, Amazon had a lot of stability issues of their AWS platform. For web services that might be acceptable, but for a productive SAP ERP system is not OK.
I’m waiting for the day that a CIO will be asked by the CEO: You put our productive ERP system into the data center of a bookseller, and now all data is lost?
One important argument for cloud computing is that you have to pay only for what you use. That doesn’t mean cloud computing is cheaper compared to traditional SAP hosting. It depends on the requirements and there is a break-even point where traditional hosting or a private cloud solution is the correct choice for a productive SAP System.
What about test and development SAP ERP systems?
A public cloud infrastructure as a service (IaaS), such as IBM SmartCloud Enterprise or Amazon AWS, is a scalable hosted IT infrastructure with on-demand access to virtual server and storage resources. It is well suited for development and test activities, and for SAP it is an ideal platform as an add-on for a productive SAP ERP System.
You can provision and deprovision resources easily.
- Within less than 60 minutes you can create a SAP instance in such an IaaS environment.
- And you have to pay for only what you use. After finishing the test you basically delete the instance and you don’t have resources available that you don’t use.
I worked several years as an SAP Consultant and it is really a mess to get a SAP System up to running when you are under time pressure in an appropriated time frame. Normally it takes five days to two weeks to set up an SAP System.
Look at this amazing video on You Tube, where you can see how easily you can set up an SAP instance on the IBM SmartCloud Enterprise within minutes:
The figure shows IBM SmartCloud Rapid Auto Provisioning of SAP virtual instances.
My conclusion: SAP in the cloud makes sense.
Yes, it makes sense to put SAP into the cloud, if you keep in mind several important points:
- Trusted cloud provider: Select a trusted cloud provider.
- Security and stability of the cloud environment: You have to know where your data is.
- The right platform for the requirements: A SAP test and development system on the IBM SmartCloud Enterprise is the absolutely right choice. For productive SAP environments, I recommend IBM SmartCloud Enterprise+
These are my personal thoughts.