Organisations are already under pressure to increase agility while reducing costs, and are now challenged with an uncertain future. Cloud solutions have for years been touted as the solution to many challenges, but anyone who has worked in IT long enough knows that it’s far more complicated than it looks on the surface.
Today, we asked Phil Quinton, Global Cloud Specialist for his views on how this is affecting SAP clients.
Phil Quinton
Phil is our Global Cloud Product Manager, coming from a heavy infrastructure background. He’s a bit of a geek with an obsession for detail, and a pathological hatred of printers. Phil’s primary drive is to solve client’s problems.
1. What are the main challenges you see clients facing when considering moving SAP to the Cloud?
From the business side, a lot of our clients are facing upgrades to the latest version of SAP when, in all honesty, most of them may not need to. That’s not to say there aren’t any advantages within the modernisation SAP software is undertaking; just that clients are actually quite happy with what they currently have. The SAP upgrade path looks very costly, and if the client is going S4, then there is also functional change and disruption which has an internal cost to the business. Right now, I think many companies are thinking twice before moving to S4.
From an IT perspective, the move to a cloud has been a gradual process, ramping up in the last few years with increased confidence in the major cloud providers’ ability to provide reliable platforms on which to run older deployments and newer applications. As these cloud platforms tend to be all things to all people, they’ve very quickly created a whole new way of delivering infrastructure that has created a skills shortage within organisations, who are thinking twice about hiring right now.
2. Sounds like clients are stuck between a rock and a hard place?
In a way they are. Unfortunately SAP clients are experiencing the effect of support obsolescence, now commonplace in the software industry. It’s generally frowned upon to run your business on out-of-support technologies, forcing you to purchase the next version, which in this case also requires business change. That said, SAP doesn't have a captive audience anymore; there are alternatives that compete in the same space.
3. So should clients look at moving away from SAP?
Not at all; companies running SAP have more options than they may think. For the most part, clients want to stay on SAP but reduce costs and improve agility with the least amount of friction.
4. How do clients reduce their costs without moving to another ERP solution?
It depends on their current IT cloud migration strategy. Ultimately you need to focus on your data, its size and how it is leveraged. The more data you have in your SAP production database, the more it will cost you going forward. It affects the size of your non-production landscapes, as well as how much it will cost you in infrastructure… especially if you are going to HANA. If you can reduce the size, you can reduce your cost. There are ways of rationalising your non-production landscape, such as removing a project track or reducing the data footprint during a refresh, rather than a full copy of production.
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From the IT side, moving from on-premise to a cloud provider, wrapping in some Managed Services is one way. Private Cloud is great if you want something simple and straightforward with predictable costs. Public Cloud, such as Microsoft Azure, is a good target when moving a wider range of systems and services and you want to have more fine-grained control over pricing.
5. Isn’t the cloud less secure than on-premise?
It’s a very good question, and you’d be convinced it’s the case if you look at recent reports in the IT press. When you look at architecting a move to the cloud, security jumps to the top of the list of concerns, often due to the risk of reputational damage. I wonder how many companies with their own on-premise hardware think about what would happen if someone broke into their server room and stole their disks? If you saw how much security there is at the data centres we use for our Private Cloud, you’d probably start worrying about leaving your equipment on-premise...That aside, regardless where your data is, if you leave the front door open someone is going to have a go at lifting it.
6. So the cloud is only as secure as you make it?
Correct. Approach it inside out, and not outside in. Start with the data itself, reduce it, anonymise it, encrypt it and then you secure it. If you don’t need it, don’t keep it. Migrating to the cloud is like moving house; use it as an excuse to get rid of anything you don’t use or need. It’s stressful to do; we all like to hoard our data, but ultimately you’ll be thankful you cleaned out.
7. Tell us the main challenges and business drivers clients face?
Regardless of the sector, budget constraints are the key driver and every part of every business is being driven to reduce costs. With a move to the cloud, there is a reduced cost of ownership, as the need to keep updating outdated hardware and maintain support infrastructure is reduced. All hardware has a limited lifecycle, servers become old within just a few years, and this problem is taken away once a client has moved to the cloud.
SAP clients have struggled for a long time with being agile and flexible. Needing a new environment for a POC, an extra training system for just a short period of time was always difficult. Flexibility is key in a cloud environment, enabling additional systems to be quickly spun up and retired as needed, within a very short period of time. That agility gives clients a competitive edge, enabling them to drive their business forward with new ideas.
Security of systems is becoming more and more vital, as cybercrime becomes more prevalent, and legislation becomes stricter with greater penalties. Cloud providers take many of those issues away from the clients taking on that responsibility.
8. Which are the questions that you ask the client beforehand to identify the best options for their cloud journey?
It's really important to understand what the client is trying to achieve. Their plans for their SAP estate over the next 3-5 years are key. Whether they are just trying to keep their existing system going, or if they have plans to migrate to S4HANA, they may require different approaches to a cloud migration. The client's existing landscape is key. Someone who had a simple ECC, three- tier environment would have very different requirements so someone who is also using SRM, CRM, a separate environment for HR, BW, or any combination of them. Any cloud application such as Success Factors or other third-party applications and the connectivity requirements of those may dictate a specific approach.
Many clients have an existing cloud preference or policy for infrastructure other than SAP. It’s important to work with these policies and build on the relationships a client may already have. This will probably dictate which cloud provider the client needs to move their SAP environment to.
In some types of business, there are data sovereignty and privacy constraints that need to be taken into account and we need to understand those to help advise our clients. We have a lot of experience with public and private organisations, so are able to guide our clients through what can often seem like a maze of legislation and requirements.
Last, but by no means least, would be any budgetary constraints a client may have.
9. What are the key business benefits of moving your non-production environment to the cloud, even if you keep production on-premise?
This is a really common scenario, and is often an approach clients will take as a first ‘foray’ into cloud. It proves the possibility, showing performance and ease before jumping all-in with the productive environment. It would also allow you to run parallel SAP project tracks in the cloud, while maintaining existing infrastructure on-premise, not compromising or risking your productive environment. It is possible to quickly spin up new systems with zero-procurement effort.
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10. For which industries are cloud solutions particularly relevant?
Cloud solutions can help any industry. We have clients in many different sectors, from the fast moving retail industry where agility is key, to the public sector which needs to be very cost focused.
11. What savings are people seeing when they reduce their non-production environments on the cloud?
Clients can expect to see at least a 25% reduction in cloud spend, especially with HANA instances, when using our software and services to move a client’s SAP landscape to the cloud. We have many examples of this. Our approach is not just to ‘lift and shift’; we ensure that only data that is required for a particular environment is moved. This makes sure that our clients only pay for what they require within their new cloud environment, resulting in excellent ROI.