Your SAP HANA landscape is a crucial piece of infrastructure — and like any other business infrastructure, you want it to just work. Businesses are waking up to the peace of mind and reliability the managed cloud can bring them. But when it comes to the cost benefits of SAP HANA, most businesses still have a very basic understanding of how cloud ERP saves money. Hint: it goes way beyond cheap hosting.
SAP HANA Cost Benefits: The State of Small to Medium Enterprises
Many SMEs move to the cloud because it makes life easier, while saving money. Cloud hosting allows you to harness your vendor’s infrastructure and expertise in a stable, efficient and cost-effective environment. SMEs can put aside all the worries that come with running a data center, such as physical security, climate control, hardware failure, upgrading and service equipment.
Hardware isn’t the only place where the cloud can improve peace of mind. Any time you hand a piece of IT infrastructure to a trusted vendor, that’s one less thing to worry about. Strategic managed IT services lets companies focus more effectively on what they do best, while outsourcing tasks like disaster recovery, SAP Basis, cyber security, and SAP GRC to a provider with expertise in those areas.
SMEs Have Diverse Needs That Need to Be Factored In
There’s nothing wrong with moving to the cloud to make things easier, increase peace of mind, focus on core tasks over context, or realise other traditional benefits. These are all excellent reasons to move to the cloud. However, most SMEs lack a complete understanding of the cloud — particularly in the realm of SAP HANA cost benefits. The cloud affects SAP HANA pricing in many ways beyond the basic cost of compute. SMEs have diverse needs, and your company may not be satisfied by a standard approach to SAP cloud managed services.
Part of the problem is a lack of information. Enterprise vendors often address messaging to the typical needs of their larger enterprise customers, or fail to differentiate based on customer size, which can send a confusing message to smaller enterprises. This can make it harder to identify the right vendor strategy to maximise SAP HANA cost benefits.
For one thing, larger enterprises tend to be more conservative than SMEs in the way they adopt SAP HANA implementations. Migrations often involve extensive pilot projects and gradual transformations, occurring over multiple stages, supported by techniques like temporary hybrid cloud adoption as a bridging strategy.
This can lead smaller businesses to underestimate the short and medium-term ROI of cloud migration and outsourcing, and obscure other SAP HANA cost benefits. It also makes it harder to weigh public vs. private and managed vs. unmanaged cloud hosting options accurately to determine the ideal SAP HANA solution.
Additionally, from an IT perspective, SMEs encompass a huge range of landscapes, with very different SAP HANA migration, hosting, and management needs. Agile startups tend to have modern, up-to-date HANA landscapes. They may be looking to derive SAP HANA cost benefits from tweaking and consolidating their vendor portfolio, or may be driven by more tactical and strategic considerations, such as reducing risks by creating a more agile and scalable landscape.
Older and more conservative SMEs tend to have very different needs. They’re often looking for a way to update inefficient legacy landscapes, and derive additional SAP HANA cost benefits from improving performance and reliability, and modernising both business and compliance processes.
SME’s Can End Up Missing the Big Picture
With the rapid speed of SAP cloud transformation, even basic IT strategy can be a major challenge, and developing a sophisticated approach to costing is much harder. SMEs in particular often have a less well-developed frameworks to evaluate SAP HANA cost benefits. Here are some of the major cost factors that go into running an SAP HANA data center:
- Server, networking, and other infrastructure costs
- Costs of replacing old and obsolete equipment
- Electricity and climate control
- IT maintenance costs (including 3rd party contractors)
- Building maintenance costs
- DR and Backup costs
Other factors can be even harder to cost. Most SMEs have their IT teams do double duty as SAP and/or cyber security support, and have to calculate the direct cost and opportunity cost of this approach. How much productivity are you missing out on when you team has to drop everything to update SAP or hunt for bugs? Is your system slower or less reliable than it would be in a managed SAP cloud hosting, and if so, how much does that cost?
What would be the SAP HANA cost benefits of a cloud MSP who has time to update your landscape more quickly, and catch bugs before they cause performance degradation? What about managed cyber security and compliance? How much is it worth to decrease risk? What’s the ROI on quick, hassle-free audits?
SMEs are usually less able to field adequate support services internally than larger companies, which makes it even more important to get the whole story. For a smaller company, without the ability to field their own around-the-clock security monitoring, or an on-call SAP Basis support, the right cloud vendor can make your landscape safer, and help you avoid future downtime, compliance penalties, and other pricey missteps.
SAP HANA Cloud Cost Benefits — 5 Key Factors
1 – Hosting:For most SMEs, the key hosting question isn’t whether to move hosting to the cloud, but how and where. As we explained above, the cost of SAP hosting involves a complex combination of factors that go well beyond hardware. SMEs that have already invested in their own hardware, licenses, facilities, staff, and so on will want to get the most out of their investment while maximising the SAP HANA cost benefits of cloud migration.In some cases, this can mean a hybrid cloud bridging strategy, moving assets over as hardware ages. However, without the right vendor, this can delay your transition to a managed cloud model in the short term. Most managed enterprise cloud providers will not be able to provide full support for on-premises hardware, and many can’t integrate it into a single SAP HANA cloud landscape. At the very least, this can force your company to continue running a physical data center, which reduces the SAP HANA cost benefits.
Symmetry is unique in our ability to completely take over the running of your hardware in cases like this. We can physically transport your servers to our secure data centers, hook them up to other elements of your cloud in a unified network, and operate them, taking you out of the hosting and hardware maintenance game entirely. And when you’re ready, we migrate their data into our cloud with minimal disruption.
The other issue is what sort of cloud to use. A managed SAP cloud can save you in the neighborhood of $129,000 on TCO in the first 3 years. Public cloud providers may still provide cheaper hosting in some situations, but their SLAs tend to be inadequate for HANA, which requires consistent, high throughput — not just high uptime. In those situations, the costs of performance degradation quickly overwhelm any SAP HANA cost benefits from their hosting pricing.
Additionally, the public cloud precludes the kind of in-depth visibility and managed services, which are key to other SAP HANA cost benefits. That’s why it’s crucial to not look at hosting in isolation, but as part of an integrated strategy handling your SAP landscape, and non-SAP workloads as well.
2 – Going From CapEx to OpEx: Onsite ERP costs aren’t just high — they’re also unpredictable, particularly for SMEs. When you have a fairly large data center, costs become more predictable. An individual server may need repair quicker than another one, but it evens out across the data center. You can plan ahead for server aging and growth, and buy enough spare capacity to cope with any surprises. But if you only have a few servers, CapEx can be a major strain. A new SAP HANA appliance, or needed repair or upgrade can be a major expense relative to your normal IT budget — even if it’s predictable as the server ages. And when one server is a big expense, it’s hard to budget spare capacity for growing demand, or to calculate the point where maintaining an older server becomes more costly than its worth.
Switching from onsite CapEx to OpEx in the cloud has significant SAP HANA cost benefits — provided you have the right cloud vendor. Costing schemes in the public cloud are complex, and you can end up paying more than you were led to believe. The managed SAP HANA cloud can offer more reliable cloud cost management, allowing you to plan monthly expenditures, and avoid unpleasant surprises.
3 – SAP HANA Support Services: The cloud isn’t just infrastructure and software. The cloud services you choose affect the way your landscape is configured, run and managed. Companies can increase their SAP HANA cost benefits by leveraging a managed cloud hosting provider. By single-sourcing SAP Basis, IT and cyber security, compliance, training, and other support services, you can decrease expenditures on staffing compared to on-premise hosting.Single-sourcing also generally decreases overall costs compared to a multi-vendor approach. Vendor management is simpler, which can represent significant cost savings in itself. Even more importantly, there’s less risk of costly disruption based on unclear responsibilities and miscommunication.
A single vendor approach means your MSP can work as an extension of your own company, in a way a collection of independent companies can’t. With the cost of downtime averaging around $100,000 per hour, the improvement in reliability this brings can have significant SAP HANA cloud cost benefits.
4 – SAP HANA Cloud Productivity: A managed SAP HANA cloud improves productivity by improving performance through effective planning and management. A dedicated team sises and runs your landscape in a managed private cloud, designed to offer reliable power and throughput. They apply performance tuning as needed, and fix errors before they lead to performance degradation, ensuring end users never have to slow down and wait for system responses.That means more productive workers, and lower burnout and frustration. Particularly for companies that have struggled with unreliable ERP, these SAP HANA cost benefits can be even more significant than those directly related to IT expenses.
5 – SAP HANA Opportunity Cost: A lot of work goes into SAP HANA. Your SAP Basis support team needs to check logs, perform needed maintenance, schedule background tests, manage transports, and do various other tasks. You also need to provide security monitoring, user administration, various compliance-related work, and training. Most of these tasks aren’t full-time jobs within your landscape and SAP skills come at a premium, so many SMEs make their IT team wear multiple hats.Unfortunately, this approach comes with hefty opportunity costs. When there’s a bug or your DR system isn’t working, your IT staff need to be able to drop everything and fix it. That means they can’t work on the strategic tasks you hired them for. And generally, your developers aren’t SAP administration or cyber security experts — they’re developers doing their best to do something they weren’t trained to do — so you have to pay for more hours of work (often, with poorer results) than you would with expert IT admin services.
The managed cloud makes all these tasks affordable, while reducing the opportunity costs of making your developers waste time keeping SAP ticking. These SAP HANA cost benefits are particularly pronounced for SMEs, which might have no way to make up those 10 hours the lead developer spent tracking down a network error last week.
An MSP Maximises SAP HANA Cost Benefits
SAP HANA cost control isn’t about budget shopping for the cheapest pieces — it’s about looking at your landscape as a whole, and finding the best SAP HANA solution overall. Working with a managed services provider allows you to maximise SAP HANA cost benefits, without having to sacrifice reliability, security or effectiveness.