From startups to global enterprises, digital business transformation is accelerating the development of new products and processes, competencies and business models. Customer behaviors and modes of communication are changing, creating new channels for engagement and gigabytes of data to analyze and monetize. The foundation for most of this transformation falls to IT.
In fact, 59% of enterprise decision makers are adopting a hybrid cloud model
- Dave Bartoletti, Forrester Research
As the cornerstone of change, IT teams are depended upon to deliver innovative, agile, and digital solutions that make an impact on company-wide productivity, and the bottom line. How can IT teams, like yours, make both the strategic and tactical shift away from maintenance status quo to that of innovative IT services brokers?
The path to achieving agility and SAP application-driven productivity, without adding overhead or cost, is in the cloud.
Recently, hyperscale providers like AWS have advanced the cloud infrastructure in support of strategic imperatives of optimizing SAP workloads. Enterprises running SAP applications now have a tremendous opportunity to leverage hyperscale cloud in transforming their application infrastructure. The current SAP installed base has been using the application for well over two decades. Global enterprises use SAP to run many critical and complex business processes with rigidity, reliability and robustness.
Innovation and speed are typically not very common with complex SAP deployments - however today it exactly these characteristics that enable the transformation of the SAP application footprint.
As you break down the overall landscape, most SAP environments can be classified under three categories:
Traditional - This represents the core SAP ERP applications such as ECC, BW, SRM, BOBJ etc. These applications handle high volume of transactions and are tightly integrated with key business processes for global enterprises. These have traditionally been designed and deployed in accordance with standards as approved by SAP. Enterprises follow the prescribed process to ensure reliability of these applications in support of their core business operations.
Cloud Native - These represent the next generation of applications such Concur, Ariba, Success Factors etc that have more recently been integrated in the SAP application landscape. Being cloud native applications, there is more flexibility in the process and methodology of deployment and maintenance. Many enterprises have adopted these applications in conjunction with the traditional applications to gain a bit more flexibility with their SAP environment
HANA and the In-Memory Experience - This has been the largest innovation from SAP bringing real-time information to the relevant end user so key business decisions can be made in a timely manner. This has also resulted in a major shift in the technology landscape and has had a major impact on IT budgets in terms of expensive memory-intensive hardware appliances.
Global enterprises running SAP applications can benefit from hyperscale in the following ways:
Improved Economics - Shifting traditional SAP workloads to hyperscale, such as AWS, provides an opportunity to optimize the architecture and take advantage of current cloud economics. For example, a typical On Premise or dedicated BW HANA system with approximately 25TB of data will require about five nodes of 2TB appliances. The base cost for these appliances is well over $4M - capitalized over a 5 year period will still cost the enterprise about $800,000 per year. Based on the current pricing structure at hyperscale providers like AWS, a similar solution running five nodes of 2TB virtual machines can be obtained for less than $500,000 annually.
Similarly, an on-premise solution for failover would require redundant hardware as part of the high availability architecture. With some of the smarter architecture options along with rapid provisioning available at AWS, the customer can avoid this additional expense. This delivers savings in excess of 50% when comparing a hyperscale approach to on-premise or dedicated infrastructure.
Innovate with Speed and Flexibility - The challenge that traditional SAP customers face has been the risk associated with change. Both from a business process standpoint as well from an architecture and technology perspective, change continues to require meticulous planning and significant testing. The availability of the underlying infrastructure is a critical component and until recently, the process to size, procure and provision additional infrastructure has taken months. So from the time a potential change is identified via requirement definition until access to an environment to validate the requirement is usually 4-6 months. This would also require committed spend, since additional infrastructure is procured and integrated into the current landscape to make the new test environments ready. If the change is not feasible after the validation period, enterprises have additional capacity sitting idle until the appropriate requirements are identified in the future.
Hyperscale transforms this scenario dramatically. Now enterprises can spin up an additional SAP instance in a matter of hours and have their data transferred so the potential change can undergo a feasibility test in days and an outcome is immediately available. This level of flexibility and speed is just not possible with an On Premise or dedicated hosted infrastructure. With hyperscale, enterprises can mitigate risk of the change along with optimized economics to drive transformation across their SAP infrastructure
Gain Synergies with Cloud Native Applications - As the adoption of SAP’s cloud native applications grow, enterprises face a challenge of managing the flexibility of these applications within the context of their traditional infrastructure. With lighter infrastructure restrictions, the cloud native applications support quicker changes and faster end results. When integrated with traditional SAP applications, speed and flexibility lose to rigidity and control as embedded within the traditional application landscape. The net effect to the enterprise is they are forced to operate a number of their business processes at the traditional application level even after they have invested in the cloud native applications.
By transforming a traditional application landscape such as ECC or BW to hyperscale, enterprises can level the playing field and take full advantage of their investments in cloud native applications. This delivers incremental value to the enterprise in terms of quality of service and elevates their entire SAP portfolio to the cloud.
As an enterprise user of SAP applications, this is an opportune time to unlock the potential in your application infrastructure and start your digital business transformation initiative. Today’s technologies, cloud migration processes, and cloud economics contribute to delivering high value to the enterprise.
You may be wondering- are there incremental digital transformation opportunities that will bring immediate value to the enterprise?
The answer is yes. Visit our next blog post which focuses on one such process optimization project that you can tackle rapidly, with immediate relief to the business.