For ERP software providers like SAP, creating an overall strategy that’s comprehensible for buyers is a major challenge. SAP encompasses a tremendous range of individually tailored landscapes. Many have unique tech stacks of SAP and third-party software, connected with novel business logic and custom code, to accommodate business roles that are different from those their competitors use. Along that path, there are several choices that need to be made: Business Suite or S/4HANA? Fiori or Screen Personas? SAP Public or SAP Private Cloud? The list goes on and on.
How do you help make sense of all the options? How do you create understandable, clearly marked paths pointing enterprises across a range of industries and sizes to the right services? Answering these questions has been a major focus of SAP cloud strategy, from the tiered service of the HANA Enterprise Cloud to the innovative delivery model of the S/4HANA Public Cloud. Here’s what you need to know.
SAP HANA: What Do You Mean By “Cloud?”
Let’s start with some background to make sure we’re all on the same page. HANA is the general name for SAP’s in-memory RDBMS. SAP HANA can be hosted in a number of ways. Companies can host it onsite, or use a public cloud hosting provider like AWS or Azure.
Alternately, they could host in a private cloud, or in a custom hybrid cloud. For example, a company might decide to host SAP production in Symmetry’s private cloud, host development and testing environments in a public cloud, and store low-latency data on premise.
However, public cloud has another meaning outside of hosting strategy: the Software as a Service (SaaS) cloud. In SaaS, the provider delivers a standard utility to multiple tenants, whose data is hosted in the same cloud. This is used because it’s very efficient, low cost and scalable — the provider can spin up some more compute and clone some new instances any time demand increases — although it does have certain downsides that we’ll cover in a moment.
As SAP has refined its cloud strategy, this overlapping terminology led to confusion for some tenants. Historically, an “SAP S/4HANA Cloud” just meant a normal S/4HANA landscape hosted in the cloud. But as SAP has developed SaaS offerings, they’ve started to use the term “public cloud” in the SaaS sense.
SAP S/4HANA Public Cloud
SAP has started to roll out a new series of ERP suites — the SAP S/4HANA Public Cloud. This cloud consists of a range of industry-specific offerings in areas like manufacturing, professional services and financial services, distributed by SAP in an SaaS model.
SAP has positioned these services as an extension of their S/4HANA line, which can make it hard to see the distinctions. The SAP Public Cloud does offer HANA-like functionality, and a range of integrations with SAP products like SuccessFactors Employee Central and Ariba Network.
SAP also touts advanced features like predictive analytics and machine learning. Their language can sometimes make it look like the only difference between the SAP Public Cloud and other flavors of S/4HANA is where the cloud is hosted.
In reality, they are very different products. The SAP S/4HANA Public Cloud is a solution for SMBs that don’t need a lot of customization. Because it’s SaaS, it’s inexpensive and doesn’t require the IT overhead of other HANA products. Customers also benefit from having the SAP perform maintenance and governance tasks, like applying patches and upgrades, or hunting down vulnerabilities.
But the SAP S/4HANA Public Cloud is also limited in a lot of ways. It only supports greenfield implementation, which means you won’t be able to get there with an upgrade — you’ll have to start over in the new landscape. It also doesn’t support all countries and languages that the on-premise version of S/4 does.
Additionally, you can’t host it in a private or hybrid environment, and you have to connect through the public Internet instead of, say, creating a high-speed connection directly to your data center. And there are a lot of things you may have to leave behind, like unsupported third-party software, custom code, and highly optimized business processes
Every solution has benefits and drawbacks, and for many SMBs, the benefits of the SAP S/4HANA Public Cloud far outweigh the drawbacks. If you’re looking for an off-the-shelf ERP solution and don’t need any customization, it’s a great choice (and it still has the award-winning SAP Fiori interface, powerful analytics and other features that draw businesses to HANA). But for many companies, it won’t replace traditional SAP HANA offerings.
The SAP HANA Enterprise Cloud — Private Option
The SAP HANA Enterprise Cloud (HEC) represents SAP’s upper two tiers of S/4HANA service. The middle tier, called the S/4HANA Cloud Private Option, is an attempt to offer companies a lot of the flexibility of the HANA, in a standardized SAP private cloud. Each tenant has their own dedicated virtual private clouds which can be hosted in whatever language, country or region they need. They have the whole range of HANA functionality, and share responsibility for governance with the vendor, just like in a standard S/4HANA landscape.
However, the Private Option has a few limits. The biggest one is the lack of brownfield migration. Like SAP Public Cloud users, Private Option tenants will have to 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, giving enterprises the ability to migrate their existing landscapes 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.
The SAP Cloud Platform
The SAP Cloud Platform isn’t really an ERP offering in the same way, but you can’t understand the whole SAP cloud landscape without it. As the name implies, it’s a Platform as a Service offering designed around SAP development. For HANA tenants, it can provide valuable tools to develop and customize their landscapes or add additional connectivity — for example, to IoT devices. That can make it a great tool for getting more value out of HANA.
The SAP Cloud Platform can also play a crucial role in the migration and upgrade itself, for example by extending the capabilities of legacy applications into the cloud. It can even be useful on its own, allowing developers to build applications without investing in a HANA landscape.
Third-Party SAP HANA Private Cloud
SAP’s three-tiered offering does a very good job of showing each customer their own road to the HANA cloud. There’s an entry level, cloud-native solution for SMBs, a highly customized option for the giants, and a mid-level offering for companies that need some limited customizability. But in reality, these levels are only one part of a vibrant SAP community, populated by third-party application hosting providers, VARs, cloud integrators and other providers.
With all the different choices in the SAP technology landscape, it’s hard to know what to look for. If you have niche technological, security or compliance needs, you can use those to rule out some providers. For example, if you’re trying to move onsite IBM iSeries to the cloud, find a provider who can host an IBM iSeries cloud landscape.
Otherwise, you’ll have to bring in your own outside specialists and undergo an extra stage of transformation for your HANA migration. Similarly, if you’re in an industry like life sciences or pharmaceuticals, you need someone with 21 CFR Part 11 compliance experience.
Don’t just take their word for it — make your provider prove it to you. Ask lots of questions, look at case studies and talk to some of their clients. A good consultant should be happy to answer your questions, and should have questions of their own during the meeting. Trust your gut. If they’re too quick to reassure you and move without really answering your questions, find another provider.
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.
New England Biolabs is a great example of this. They were launching an innovative IOT service — the NEBnow Freezer Program — and SAP ECC 6.0 was lacking in certain crucial production planning, product costing and eProcurement functions. Originally, they planned to upgrade straight to S/4HANA, but their original timetable would have delayed production planning. We worked with them to plan a rapid migration to Suite on HANA, with a subsequent move to S/4HANA. This effectively supported both their launch date and their ongoing IT needs.
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.
By contrast, companies that primarily profit from the migration itself have a financial interest in getting it done, and moving on to another client. But for providers like us, whose revenue comes chiefly from hosting and managed services, getting it right the first time is always worth the extra work.
Cloud Hosting and Your Managed Services Strategy
Your cloud hosting options restrict your SAP support strategy much less than they used to. It’s no longer necessary to retain a portfolio of different providers to manage your AWS, private cloud and onsite facilities — a good provider can serve as a cloud integrator, SAP Basis administrator, security chief and compliance officer.
However, that doesn’t necessarily apply to SAP cloud services, or other specialized providers. The SAP Public Cloud limits your choices to its own cloud. For the Private Option in HEC, you may have limited ability to integrate with applications hosted on other clouds, making it difficult to design a hybrid SAP environment incorporating onsite and cloud resources into a single landscape.
Even when a multi-cloud environment is available, there are going to be tradeoffs. A multi-cloud environment will tend to be more challenging in areas like integration, compliance and monitoring challenges, which can decrease its overall benefits.
You also need to deal with cloud-specific limitations. In general, large cloud providers don’t have the same insight into the state of their hardware as a private cloud provider like Symmetry does. That can make it more difficult to pin down and correct performance issues in the public cloud, since you can’t see what’s happening at the hardware level.
SLAs are also different between the public and private cloud. Public cloud providers can guarantee very high availability, but in most cases, they can’t guarantee performance, whereas enterprise private cloud providers can guarantee both.
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.
However, as cloud services become more powerful, there’s less and less need for a multi-cloud strategy. The Next Generation Private Cloud has the scalability and automation that have traditionally drawn people to the public cloud, with the security and compliance benefits of the private cloud, and the public cloud has become steadily more reliable. There are still plenty of times where you’ll need different kinds of clouds — for example, the HANA Cloud Platform as a development platform, and HEC for hosting — but the number of use cases that demand multiple hosting providers is rapidly shrinking.
Take the First Step to the SAP HANA Cloud
SAP HANA is a complicated range of products and services, and what’s right for one company may not be right for another. Whether you’re looking for a complete migration and managed services provider, or just want someone to help you brainstorm your migration, we’d love to help you plan your journey to the HANA cloud.