SAP is adapting well to the cloud computing revolution. The company has embraced the technology and now offers several distinct options for SAP companies that want to run some or all of their SAP landscapes in the cloud. These include public cloud hosting of SAP (e.g. on AWS), SAP S/4HANA as Software-as-a-Service (SaaS), cloud offerings hosted by SAP itself and private cloud hosting of SAP by third parties (like us). It can be a bit confusing, with similar-sounding solution names offering quite different functions and hosting architectures.
SAP private cloud is a good option for a wide swath of SAP users. It satisfies many of the potentially conflicting needs experienced by companies that want SAP in the cloud, but have concerns about performance, security and control. Therefore, it’s useful to understand what SAP private cloud is, and what it isn’t, especially regarding the SAP HANA and SAP S/4HANA platforms.
SAP on the Public Cloud
SAP companies initially stayed away from public cloud providers like Amazon Web Services (AWS) and Microsoft Azure. There were valid reasons for this. The public cloud wasn’t known for strong performance or customization. The platforms, versatile as they were, simply didn’t offer the degrees of configuration flexibility or administrative quality SAP users demanded. This has now changed. AWS and Azure both offer specialized services for SAP. These include choices for high-performing, dedicated hardware along with well-tuned instances of SAP software that boots up in the public cloud on demand.
The SAP Cloud Platform
The SAP Cloud Platform, its name notwithstanding, is not an ERP suite in the cloud. Rather, it’s a Platform as a Service (PaaS) offering designed around SAP development. It provides valuable tools for development and customization of HANA landscapes. It lets developers add connectivity, e.g. to Internet of Things (IoT) devices.
SAP Cloud Platform can also play a crucial role in the SAP cloud migration and upgrade processes. For example, by using the SAP Cloud PaaS, developers and SAP admins can extend the capabilities of their SAP legacy applications into the cloud. It also allows developers to build applications without requiring an investment in a HANA landscape.
SAP S/4HANA Cloud
The SAP S/4HANA Cloud is a SaaS solution that consists of a range of industry-specific offerings. These include manufacturing, professional services and financial services. SAP has positioned these services as an extension of their S/4HANA line. There’s some potential confusion here, unfortunately. SAP S/4HANA is a full-blown, heavy-duty enterprise class ERP solution and business suite. It can run on-premises and in variety of private and hybrid cloud architectures at massive scale. S/4HANA Cloud is a more limited service that is best suited to small-to-medium businesses (SMBs).
SAP S/4HANA Cloud does not need a lot of customization, nor can it offer much. It’s SaaS, so it’s inexpensive. There is no need for the kind of IT overhead required for other SAP HANA products. SAP performs maintenance and governance tasks like applying patches and upgrades. At the same time, SAP S/4HANA Cloud has limitations. It only supports greenfield implementations, meaning there is no upgrade path that will get you to it from your existing SAP landscape. You have to start from scratch. Nor does it support all countries and languages that the on-premise version of S/4HANA does.
Additionally, S/4HANA Cloud can’t run in a private cloud or hybrid environment. It doesn’t support third-party software or custom code either. However for some SMB, despite the drawbacks they view S/4HANA in an easy-to-support, economical service offering. Users get the modern SAP Fiori UX, powerful analytics tools and more.
What is SAP Private Cloud?
The term “SAP Private Cloud” refers to hosting an SAP landscape in a private cloud environment. For the sake of clarity, a private cloud comprises infrastructure (hardware, network, software, compute, storage, etc.) set up with a cloud software architecture, but operated in a private, on-premises facility. Many corporations still choose to build their own private clouds, but why would they want to do this? Why not just use AWS or Microsoft Azure if they want cloud services? The answer is that some organizations want the benefits of the cloud architecture, e.g. agility, virtualization and on-demand scaling, but in an environment they control one hundred percent.
SAP private clouds are hosted by SAP partners like Symmetry. This requires a fair amount of SAP expertise to set up and manage such an infrastructure. It also requires a significant investment from that partner. For the customer, however, the benefits include the flexibility and low-maintenance appeal of the cloud, but with a high level of control. There’s also the potential to isolate each client’s environment for the purposes of performance, security and compliance.
The SAP HANA Enterprise Cloud (HEC)
SAP HANA Enterprise Cloud (HEC) is a scalable and secure private cloud. SAP runs HEC, hosting it for customers out of their own data center facilities. HEC consists of the two upper tiers of the S/4HANA service. The S/4HANA Cloud Private Option, the lower of these tiers, is a standardized SAP private cloud. Each tenant has its own dedicated virtual private cloud. They can be hosted in whatever language, country or region the tenant needs. They have the whole range of HANA functionality, and share responsibility for governance with the vendor, just like in a standard S/4HANA landscape.
The Private Option does have a few limits, though. It lacks the ability to do a “brownfield migration.” Tenants must build a new landscape from scratch. Modifications of the software, such as custom code are also not allowed.
The top tier, the Custom HANA Enterprise Cloud, adds these options. Enterprises gain the ability to migrate their existing landscapes (the brownfield approach) and modify their S/4HANA solution in whatever way they see fit. The big drawback of this tier is the price. As an SAP-managed, fully customizable solution, it’s generally only going to be an option for companies with roughly $1 billion annual revenue or more.
SAP Private Cloud vs. HEC
It can be a little tricky to figure out the best choice when comparing HEC and SAP private cloud. The two models are broadly comparable. SAP certainly has the resources and experience to provide an outstanding private cloud. A private cloud hosted by an SAP partner may be advantageous for a number of reasons, however.
The configuration can be more personalized with a private cloud partner. It’s possible to keep older, legacy elements of the SAP landscape running on-premises while porting other parts of the landscape into the SAP private cloud. There’s more flexibility in establishing hybrid cloud links between on-premises and cloud-hosted instances of the software. The private cloud service can also be combined with specialized professional services like Basis Administration.
SAP HEC vs. AWS
SAP HEC and AWS are superficially similar. With each hosting arrangement, it’s possible to run a comparable set of SAP HANA and S/4HANA environments. There may be some performance differences, with AWS potentially being less consistently high performing. Security and compliance could be concerns as well, though that’s more a matter of perception than reality on a lot of levels. With its two-tier security model, the client is completely responsible for securing the SAP landscape itself, its data, access controls and so forth. AWS defends the infrastructure and hardware.
In terms of compliance, there may be some “deal breakers” in the public cloud. With patient records, for example, AWS is simply not currently an option under the HIPAA law. And, while the public cloud provides good backup and disaster recovery capabilities, it’s again the responsibility of the client to architect them and choose the geographic recovery zones. None of these factors mean SAP on the public cloud is inherently bad, but they could shift the balance for certain use cases. Parts of your landscape that require extremely consistent performance or low latency are probably better suited for either a private cloud or an onsite landscape.
Cloud Hosting and Your Managed Services Strategy
Thinking about cloud options for SAP should be part of a broader conversation about your managed services strategy. Today, it’s become increasingly viable, and popular, to outsource core IT operations like enterprise application hosting. This might have once been considered an irresponsible or foolish activity, but now it’s the opposite. In some cases, dedicated professionals can do it better and more economically than an in-house team—at least for certain areas of SAP management. At a minimum, managed services take some of the personnel recruiting burden off of the IT department.
If you’re in the early stage of planning your SAP cloud migration, it’s good to be flexible. Some clients come in looking for migration support to upgrade their onsite landscape, then decide to move to a managed cloud instead after pricing out the options. In other cases, we may recommend tweaks to their proposed migration timetable to minimize disruption or support a release more effectively.
Moving to the Next Generation Private Cloud
Choosing a technical partner who provides hosting for your migration is a good idea, even if you plan on hosting your own landscape. Not only will they be able to offer more options, they’ll also be willing to take more care to ensure the migration goes smoothly. As an SAP-certified provider with competencies in migration, hosting and running SAP, we want you to stay, and we want to minimize our future workload if you do stay. That means we go to great lengths to make sure your HANA cloud is delivered on time, and tuned perfectly so we don’t have to put out fires down the road.
Our next-generation private cloud addresses many of the performance and control concerns that IT managers have about migrating SAP to the cloud. It has the scalability and automation that have traditionally drawn people to the public cloud, yet with the security and compliance benefits of the private cloud. If you’re looking at your cloud options, our private cloud service coupled with our advisory and support services provides the best of on-premises performance and control but with the flexibility and economics of the cloud. Contact our team to learn more today.