At the recent All Cloud Connect series of conferences, SAP discussed how cloud is changing the IT landscape, its cloud strategy, and how new investments in the HANA Enterprise Cloud offering and data centres around the world are helping customers to take advantage of the benefits.
The world in the grip of a digital transformation, the likes of which we have never seen. Organisations cannot simply copy the processes and paradigms of the analogue world onto digital platforms, according to Sven Denecken, global vice president for cloud strategy, SAP SE.
Presenting at SAP’s All Cloud Connect conference in Sydney, Denecken said that against this backdrop, the motivation for embracing the cloud today is very different from the past, when it was primarily to reduce total cost of ownership of IT assets.
“Companies today are looking for innovation and agility, and cloud needs to stand for simple and faster time to value. We need to enable you as customers and partners to look and adopt those cloud applications, the infrastructure, the database, the platforms, basically everything as a service, because then we are talking about transformation and innovation,” he said.
This also plays into the changing role of the CIO and IT departments in general.
“We need to move away from the classical ‘survival role’, which is managing the current status, towards being a revenue contributor. It’s actually not possible without looking at what I would call the layers of digital transformation – cloud, data, social, and devices,” Denecken said.
While pure cloud vendors may present a simple pitch – that is, on-premise is bad, and cloud is good – SAP believes hybrid models will become the reality for most organisations. This position is not surprising, given SAP’s heritage in on-premise, but it still speaks to a pragmatic evolution of the thinking beyond the cries of ‘everything will be cloud’ of a few years ago.
“The strategy needs to be, where can you accelerate with the cloud but with the right mix of solutions that you own on-premise – solutions that are managed, maybe by IT or by a partner or vendor,” Denecken said.
“Your starting point of that journey will define that right mix, because we are not living in a ‘rip and replace’ world. We need to understand which kind of delivery methodology, which kinds of solutions make sense.”
With that in mind, the SAP strategy offers a comprehensive cloud platform for customers to be able to adopt elements as needed or the whole shebang. This includes four key components:
- Line of business applications, covering the areas of employees, customers, suppliers and money;
- Full ERP in the cloud;
- The SAP HANA Cloud Platform; and
- A consistent user experience via Fiori.
“We are building our company strategy around this one innovation platform. We are putting the applications [on that platform] irrespective of the deployment model – on-premise, managed cloud – and we are building analytics as one user experience on top of it,” Denecken said.
For IT leaders to achieve success with cloud, taking into account the perspective of line of business leaders, who increasingly wield the budgetary power to make technology decisions, is more and more important.
“The CIO and the role of IT is changing from classical database and network governance, to really helping the line of business, who are only thinking about problems in their area they want to solve, to look at the broader picture,” Denecken said. “But let’s give them something to start, where they can see and feel the value very fast. Because one thing is clear for IT, it’s if you don’t win in the line of business, you won’t win as CIO.
HANA Enterprise Cloud explained
One of the hallmarks of SAP’s cloud strategy is offering customers choice around deployment, and the HANA Enterprise Cloud offering aims to provide just that for organisations looking to leverage the power of the in-memory platform. Launched a little more than a year ago, there are now around 100 customers globally which have chosen this option.
Simon Dale, head of HANA Enterprise Cloud, SAP Asia Pacific Japan, explained the offering is not just any infrastructure and service set, but a virtual private client offering specifically designed to run complex SAP solutions.
Customers in the APJ region are using the service not only because of the cost advantages, but also for the agility it provides to experiment and undertake proof of concept projects with much lower risk and cost.
“You can accelerate or identify business cases in a way that wasn’t possible before. You can build proof points to support a business case which is bringing innovation to the company,” Dale said.
For example, an Australian retail customer is running a proof of concept on the SAP Fraud Management solution, a pure HANA big data analytics application. The project was up and running within 10 days of the customer giving the go-ahead.
While organisations can quickly gain access to the HANA platform on its own via the HANA marketplace, to implement applications such as Business Suite on HANA or SAP Customer Engagement Intelligence on mobile for example, is more complex.
“Now we are talking about a scope which is unique to you which is not simple. It may be a new implementation project or it might be some kind of migration. The point is that right at the outward assessment is when we figure out what you are trying to achieve, and we can say, ‘this is what we can do’,” Dale said.
“If it’s a migration, take a Suite on HANA system for two or three months, get yourself so far, and then take it back and put it on premise. If it’s a QA system you need for a period of time, rent it from us. You can use this as a very flexible backup system for any kind of project scenario, and if you want, you can take it all the way into production, and then you’ll sign a multi-year contract for us to run and manage it.”
Choose your own adventure
For customers looking to utilise the HANA Enterprise Cloud service, Dale emphasised there is considerable flexibility around deployment models – in terms of payment methods, rapid deployment solutions, and the choice to work with an external partner or SAP’s Application Management Services.
“As an organisation, we are still learning how to sell the true value of this, but it’s a subscription-based service. You are subscribing to a certain amount of capacity and a certain workload scope which we have agreed in the assessment phase,” Dale said.
“We have introduced a whole new way to access capability, so for new licences or for incremental licences that you are going to buy from SAP, or to move your existing ones into Suite on HANA or BW on HANA on the service, then you can subscribe to everything. For example, with the Fraud Management application, the customer will pay ‘x’ dollars per month to run it. Then they get the whole [solution] delivered as an outcome to the service level agreement.”
Local data centres giving cloud offering more legs
Recognising that while many customers are enthusiastic about the concept of cloud, data sovereignty and performance issues can be something of a dampener, SAP is investing in data centres all around the world.
In the APJ region, Japan led the way with data centres in Tokyo and Osaka, and several customers are already in the process of undertaking deployments and migrations to the HANA Enterprise Cloud. The first customer go-live was planned for July, which is a complete migration of an SAP landscape of around 15 solutions.
In April this year, SAP announced that Australia would have the first of a series of data centres based in Sydney.
The local data centre was established in response to customer demand, with many Australian businesses and agencies keen to access real-time in-memory computing, but reluctant to invest in an on-premise deployment, have their data hosted offshore or battle issues with latency and performance.
On the launch, SAP ANZ general manager, platform solutions, Paul Muller, said there was both a solid technology and business value proposition behind having a local data centre option.
Muller said the ability to move existing SAP licences to this managed cloud service appeals to businesses seeking to reduce capital expenditure.
“This allows them to free up some of their investment in networks and hardware to have them managed in a data centre. In a cash-tight economy, that will enable them to invest in other areas of innovation, ideally with SAP,” Muller said.
Muller expected to see faster adoption of the Enterprise Cloud offering amongst customers, due to its flexibility.
“Many customers have a desire to move to HANA, but in order to look at changes in configuration around their hardware and their project cycle in addition to capital expenditure, having this available means that they can move to the facility and also adopt HANA much faster than their usual cycles,” he said.
Initially, new customers have to purchase SAP on-premise licenses that can then be transferred to the cloud, but Muller said the company will be making announcement on subscription-based models “in due course”.
As well as the HANA Enterprise Cloud offering, Australian customers also can access the SuccessFactors product portfolio from the Sydney data centre.
This article was first published in Inside SAP Winter 2014.
