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Cloud Lessons Learned for SAP Applications and SAP HANA: Q&A on Evaluating Cloud Cost Savings, Speed, and Performance

May 28, 2015

Review our Q&A with IBM's Chuck Kichler, Global SAP CTO and IBM Distinguished Engineer, and Susan Wallace, IBM Global Portfolio Manager, IBM Cloud Services, who shared business benefits and technical considerations in a move to the cloud.

In addition to addressing cloud implementation challenges, integration with on-premise systems, data security issues, test automation, and cost of migration, they answered questions such as:

  • Do you recommend moving the entire SAP landscape (dev, qa, sandbox) to the cloud?  
  • How can cloud help us de-centralize our SAP operations while keeping the entire organization on a single environment?
  • How do you preserve existing investments in application and infrastructure when moving to the cloud?
  • To migrate to S/4HANA, don't you need to re-write all your existing Enhancements?  
  • If we implement an SAP HANA solution in the cloud, does SAP ERP need to be on the cloud, too?
  • What is the impact in the WAN or Internet network to move the cloud environment?

View the Q&A replay and transcript below to review the discussion from this live chat session.

Live Blog Q&A on Evaluating Cloud for SAP Applications and SAP HANA: Live May 28 12:30pmET


SAPinsider: We'll kick off today's Q&A in about an hour, so post your questions to our moderator, SAPinsider Features Editor Natalie Miller, at any time. At 12:30pm EDT, our panelists, IBM Distinguished Engineer Chuck Kichler and IBM's Susan Wallace, will post answers to your questions here.


Natalie Miller, SAPinsider: Welcome to today’s Q&A on lessons learned from moving SAP applications and SAP HANA to the cloud.

IBM’s Charles Kichler and Susan Wallace will join us to take your questions for the hour today. Chuck Kichler is IBM Global SAP CTO and IBM Distinguished Engineer, and Susan Wallace is IBM Global Portfolio Manager, IBM Cloud Services.

 Welcome, Chuck and Susan, and thank you for joining us today!


Susan Wallace, IBM: Hi, happy to be here.


Chuck Kichler, IBM: Hi. Chuck Kichler (@cloudubq). Global SAP Practice CTO, IBM Distinguished Engineer. I’ve been doing SAP since 1993 starting as SAP Basis consultant. Now leading IBM’s CAMSS – Cloud, Analytics, Mobile, Social, and Security strategy for SAP. Excited to chat today.


Natalie Miller:  Before we go to questions from our readers, I want to first ask about one of the drivers that companies have to consider when evaluating cloud implementation. 

Although there’s much discussion on scalability, faster implementation, and security, where have you seen cloud impact the speed of data processing and data loads for SAP systems?


Susan Wallace: So to address the speed question, here is a case study with some of the proof points on operational efficiency and how cloud sped up key processes:

Edwards, Ltd
Headquartered in Crawley, England, Edwards is a leading developer of innovative vacuum technologies used in manufacturing, industrial and scientific environments. The company was founded in 1919 and has more than 3,200 employees worldwide who design, manufacture and support its products. It is a 94-year-old company serving a USD 6 billion marketplace, has a turnover of USD 1 billion a year, and has recently been acquired by Atlas Copco.

Business need

To support continuing business growth, Edwards needed a scalable SAP hosting solution from a trusted provider with international presence.


IBM Global Technology Services developed an IBM Cloud Managed Services and IBM Cloud Managed Services for SAP Applications hosting infrastructure designed to meet the company’s requirements.


The IBM Cloud platform supports Edwards’s strategic growth objectives and delivers 70 percent more computing power while driving down costs:

  • Increased computing power by 70 percent
  • 50 percent faster SAP Customer Relationship Management processes
  • 40 percent faster overnight run times for the SAP Advanced Planning and Optimization (APO) tool
  • 30 percent faster SAP Business Warehouse® (BW) load processing
  • 50 percent faster SAP R/3 batch processing


Chuck Kichler: Cloud helps you where you are most dynamic. In SAP, non-prd is the most dynamic. Imagine bringing up additional test platforms. While they may not be identical, they will allow you to test the functionality.


Natalie Miller: Great example, Susan. Thanks, Chuck. We can definitely circle back to those key cloud drivers throughout today’s chat, but there are a number of questions from readers waiting. So I’ll let you get started on those now!


Comment From Edwin Giraldo

Is it recommended to run the entire landscape (Dev, QA, Sandbox) in the cloud? Or is a hybrid cloud landscape better? What is the best model in terms of cost?

Chuck Kichler: Not sure how you are using “hybrid.” Some talk about hybrid as non-production on cloud and production on-premise. A lot more now talk about some on-prem and PaaS and SaaS applications. In general, put what is most dynamic in the cloud. If you choose to run your PRD on-prem and your non-PRD on cloud, you'll need to look at how close the infrastructure is and the latency of the interfaces. The issue with cloud is distance. It can't be the same as in your own data center, but cloud can still be very valuable to your organization.


Comment From Tejani

What are biggest challenges one needs to be aware of with an initial cloud implementation?

Susan Wallace: Some of the challenges we see are lack of buy-in across the business. So your Supply Chain VP wants to move to cloud but IT is not on board, or security folks are hesitant. The key is to get everybody on board, start with a POC, and then expand where it makes sense.
Another aspect is determining the best workloads to move to cloud. If you have really old versions of SAP applications, the migration will be much more involved than with more recent software or greenfield workloads.


Comment From Raman

How do you ensure data security in a cloud environment from an end customer perspective? What are the other potential roadblocks and common misconceptions cloud customers will likely face?

Chuck Kichler: In many ways, cloud is just as safe – or safer – than your data center. Every corporate data center is hooked to the Internet, so in theory you can be breached. I think the biggest issue is people use cloud and don't put in the effort to secure it. You can. We've built entire corporate data centers inside of our SoftLayer implementing multi-layered security. We all use shared networks. We have hundreds if not thousands of communication streams in a small SDLC line, but we don't worry. We use similar encryption and protections in cloud data centers.

If you use our IBM Cloud for SAP, we include the security. We deliver SAP on cloud as a PaaS so you don't have to come up with all the security. We'll be glad to walk you through it.
Regardless, being on cloud can be as safe as your own data center, but you do have to do your homework.

Susan Wallace: Here is a link to our fully managed IBM Cloud for SAP Applications.


Comment From Tom

What technical hurdles should we be aware of when it comes to migration from an on-premise SAP environment to a cloud-based environment?

Chuck Kichler: If taking an on-prem system to cloud, the biggest one is:  Does the provider offer the right SLAs to support my business now and in the future?
Then you have to look at distance. If everyone is at HQ using the system, or you transfer lots of data to it, then it may not be great idea. If you user population is diverse, uses lots of mobile, remote, etc., then cloud can be a great answer. Also, some clients just want to be out of the data center business - it's not core to them.


Comment From Priscilla Wynn-Brown

What are the benefits of hosting an SAP HANA solution in the cloud?

Chuck Kichler: The benefit of SAP HANA on the cloud is twofold: speed and cost. You don't have to buy all the gear, build up the skills, and then deploy it. That alone will take time. You can focus on the use of HANA for your business. If you need more or less, you don't have to change your infrastructure, the cloud provider does. If a new CPU comes out that works better, you can just migrate.

The more dynamic the requirements are, the more cloud will be the answer.


Comment From Tom

How can cloud help us decentralize our SAP operations while keeping the entire organization on a single environment?

Susan Wallace: This is one of the sweet spots for cloud. Cloud allows you provide access to your SAP applications portal. You can determine who should have access and what level of access. The term that is being used is a "single pane of glass."


Comment From Raman

How do you still manage apps, services, data, and infrastructure that are no longer on-premise or completely under your control from an end customer perspective?

Chuck Kichler: That is good question with an involved answer! I strongly recommend use of a RACI chart identifying who is responsible for what.
You are correct, some pieces go outside of your control, but you will still be responsible for them. The CIO/CTO doesn't get off the hook. IT becomes more of a broker function.
I strongly suggest you work with partners whom you trust. The top cloud providers, such as IBM, can provide you with services that you can depend on.


Comment From Michael C

I am looking at CRM, ECC in the cloud for a standalone instance (PAAS). Would you recommend Business Suite on HANA? Any advice on cloud integration for our on-premise systems? Any recommendations on GRC, as I don't want to add a cloud instance?

Chuck Kichler: As to ECC, I'm advising clients to move into the S/4HANA functions. It really changes SAP. You basically are running transactions on an analytics database. You get full capabilities of HANA. As for CRM, I'm a fan of using SaaS-based solutions, and SAP's Cloud for Customer and CEC is a great option.

There are multiple products in the market and most cloud providers can help, but you can extend your network so everything looks like it is all part of your LAN. I'd think GRC would work in this case across the data centers, but I need to do the research on it.


Comment From Raman

How do you preserve existing investments in application and infrastructure, and what are some of the challenges in protecting these investments while at the same time providing integration?

Susan Wallace: A couple of points: You can supplement existing investments by moving selected SAP apps to the cloud — new applications, new department — as a way to facilitate mergers and acquisitions. As your current infrastructure gets to the end of contract or is costing you more than the value it is providing, then you can move to cloud. Cloud adoption is a journey, not a transaction.


Comment From Tom

How can we leverage IBM's Cloud infrastructure to reduce computing resource waste and automatically manage the scale of SAP computing resources based on current and future changing business needs?

Susan Wallace: Here is another case study that will shed some light:

Melissa Kikizas

Business need

Pasta and semolina producer Melissa Kikizas realized that reducing inventory levels across its warehouses in Greece would enable it to unlock significant financial benefits – but how could it avoid the risk of under-stocking?


Melissa Kikizas deployed end-to-end business processes based on SAP ERP software hosted in an IBM private cloud, enabling it to identify and maintain the optimal stock levels at each of its warehouses.


Today, Melissa Kikizas has reduced its warehouse inventory levels by 10 percent – improving cash flow while streamlining its processes to ensure that there is always stock on hand to capture and fulfill every sales opportunity, plus reducing delivery delays by 20 percent.


Comment From Mekala Rao

We have built an SAP HANA application using the HCP. What kind of comments can we share with any prospects who have security concerns on the cloud?

Chuck Kichler: Congratulations on jumping in on HCP. I've very excited about getting going on HCP and DevOps in general. IBM built about 350 HCP apps in few months for SAPPHIRE NOW and plan to have 1000 by EOY.
SAP spent a lot of time thinking about security for SAP applications. The security capability for logging in and out is built in. The data on HCP in HANA is encrypted. You can build your apps stateless so no data is stored, or you can use HCP just to build the apps and then distribute them to the devices.
In the case of mobile, you will want to have a strong MDM - Mobile Device Management - tool in place.


Comment From Tejani

Are these cloud applications truly multi-tenant? What role do multiple realms play? How can one go about making these applications multi-tenant if multiple companies are involved?

Susan Wallace: Tejani, so you have choice when it comes to multi-tenancy. SoftLayer offers dedicated, bare metal. So it is hosted in a SoftLayer data center but the compute environment is dedicated to you. In an IBM managed cloud for SAP, the infrastructure is multi-tenant but customers are separated via   LPARs. So there are no "noisy neighbors." Security protocols are in place to ensure that your data is only accessible by you.

Chuck Kichler: SAP on-prem apps like ECC, BW, CRM, SCP (APO), etc., are not multi-tenant. Apps like SuccessFactors, Ariba, and most SAP SaaS applications are.

Multi-tenancy has to be designed into a product. In the case of ECC, there is some facility in it based on using of multiple clients within an instance, but it is a seldom used feature. You'd have to do some work in each product.

You might consider using SAP Business ByDesign, which is multi-tenant, or using SAP S/4 HANA public cloud. We are using the former for large mid-market clients and for subsidiaries in a two-tier ERP model.


Comment From Edwin Giraldo

How is the integration with legacy systems? What is your experience with integration in near real time?

Susan Wallace: Integration with legacy systems is an important aspect of adopting cloud and this is true for SAP and non-SAP environments. Our IBM team has worked with hundreds of clients to move workloads to cloud -- both legacy apps as well as born-on-the-cloud applications -- and integrate them together.
Chuck, would like your input here…

Chuck Kichler: Integration between legacy (definition of legacy: anything already running) is very similar to how you do it today. You do have to be aware of distance, which can cause latency and issues with crossing WANs instead of LANs.

If you are doing true real-time (A then B then C) where items are sequenced and need to be at real-time, not just real fast, then I question a cloud model unless everything required can be put on the cloud.

One really good way to do integration is with cloud based integration. HCP (HANA Cloud Platform) provides HCI (HANA Cloud Integration). I think it works best where you have diverse points of integration coming into your cloud based app.


Comment From Guest

To migrate to S/4 HANA, don't you need to rewrite all your existing Enhancements?

 Chuck Kichler: No. As you turn on S/4 capability like Simple Finance 2.0 and Simple Logistics, your data is migrated. New functions will be available via new t-codes. Some functions will no longer be available, but SAP tried to not to remove core ones. There also is a compatibility table view that allows S/4 HANA to dynamically build legacy table views. It does have a performance impact, but it will allow old code to keep working. I'd recommend that if you use it a lot, you do migrate it to the native HANA code and tables.


Comment From Edwin Giraldo

What happens with SAP SP updates in the cloud?

Chuck Kichler: For on-prem SAP apps like ECC, BW, etc. you are responsible for you own application support. Most providers including IBM have broad range of what version you can run. You can't go out of support, but it is your call how and when you update.

If you move to an SaaS-based application, then the provider will give you a schedule. For instance, for SuccessFactors, it is quarterly. You have no choice. They do help you and warn you, but the quarterly update will be delivered. In most cases, it has no or minimal impact.


Comment From Raman

When evaluating key cloud partners and service providers, what are some important questions to ask?

Susan Wallace: Here’s my list of key questions:

  • Can you help us to determine which workloads to move to cloud?
  • Do you have standard tools to do a workload assessment?
  • What are my deployment options? Public, private, hybrid, self-managed, managed, on-premises, off-premises?
  • What are your SLAs?
  • Are your SLAs at the infrastructure level or at the VM level?
  • How many data centers do you have?
  • Where are they?
  • Do you have disaster recovery?
  • Do you offer AIX, Windows, and Linux?
  • Do you have deep expertise in migrating SAP Applications to cloud?
  • What are the tools and processes you use for migration?
  • What is the average number of years of experience that your SAP Architects have?
  • Can you handle SAP and non-SAP workloads?
  • Can you optimize my SAP landscapes?


Comment From Chetan

How does moving from ECC to S/4 HANA impact the role of the SAP security team within the organization? For instance, does it necessitate a drastic shift away from their traditional knowledge of the SAP authorization concept in ECC?

Chuck Kichler: Thus far, SAP has not indicated a dramatic shift in security. Job roles still remain. There are new tables and t-codes, etc. to be secured. I keep hoping SAP will modernize security, but it is a very tangled web and difficult to solve without creating more problems.


Comment From Venkat

How much cost savings can we get if we move existing applications vs. greenfield deployments?

Susan Wallace:  Venkat, we are seeing on average 20% cost reduction when moving existing SAP applications to cloud. Greenfield gives you the speed of starting on cloud vs. migrating. 


Comment From Aga

You mentioned a 20% cost reduction. Which costs will decrease the most (i.e. resource cost, infrastructure costs, etc.)? Can you elaborate?

Susan Wallace: It is combination of resource cost (although we have some clients that move their resources into higher-value roles vs. SAP maintenance) and infrastructure cost (new servers, data center space, heating, cooling, electricity, etc.).


Comment From Priscilla Wynn-Brown

If the company decides to implement an SAP HANA solution in the cloud, must the SAP ERP system be on the cloud, too?

Chuck Kichler: No. You can connect on-premise solutions to cloud solutions. The HANA DB will be very quick, but you do have to account for the latency between the locations. In most cases it works well. If you happen to be transferring huge amounts of data, then it might not be a good idea. Often I hear people say "Well, it is not real time." First, very few things require it. I'm sure your CFO would be thrilled if he could get a complete financial picture that was within 5 minutes of real time. Most companies can't see their finances across all areas within 5 days or 2 weeks, so 5 minutes of lag is nothing in today's business world.


Comment From Raman

What are your recommendations for building strong business cases for cloud and what are the key decisions that need to be made related to cloud?

Chuck Kichler: Look at what can change with dynamic capability, speed, and introduction of new technical capabilities. Business is moving at the speed of technology. Your new competitors are coming in via all cloud-based systems, adapting to business change and technical change overnight. Can you?


Comment From Raman

What resources, services, and tools do you recommend people consider when it comes to helping them on the cloud journey?

Susan Wallace: I would recommend a few things. The first would be a workload assessment to determine which workloads – and which SAP workloads - are most suited for cloud. At IBM we have a Cloud Advisory team that can do this assessment and then provide a roadmap for next steps to take.
At the business level is critical to understand what are the business strategic imperatives and how cloud can address them.
For example we had a client located in Italy that wanted reach new customers in Brazil. They did not want to take the time or money to build a data center so they took advantage of the IBM Cloud Data Center in Hortolandia, Brazil, and were up and running reaching new clients in 3 months rather than in  years.


Comment From Edwin Giraldo

How is the process of test automization in the cloud?

Chuck Kichler: Testing on the cloud of SAP apps is similar to on-premise. There are a few SaaS and cloud-based test tools you can use as well. We've used Worksoft and Panaya successfully with cloud-based SAP systems. In general, the testing focus is on the end user, which does move even if the SAP system is on the cloud.


Comment From Guest

Is there a HANA offering on SoftLayer?

Susan Wallace: Yes, we have two HANA offering on SoftLayer. The first is SAP HANA One - a small 64gig environment with HANA license included. Great way to get started quickly to do POCs, sandbox, and demos. We also have SAP HANA on SoftLayer with a set of managed services up to 2 terabytes. And if you need something larger with a full set of integrated managed services, then we have that option as well, with high-performance XIV storage; choice of Windows, Linux, or AIX; and SLAs starting at the VM level all the way to the app level.

Comment From Greg

Thank you for answering my question regarding HANA on SoftLayer, but is there something similar to what AWS and Azure with SAP are doing? SAP's websites are not showing any information on SoftLayer.

Susan Wallace: Amazon has SAP HANA One and SoftLayer has SAP HANA One. Here is the link.


Comment From Vamsi

Hi, Are  SAP BW / BI / Business Objects,  BPC, and Lumira now available on the cloud? How can we implement new analytics and so on over cloud?

Chuck Kichler: If you are discussing HCP - HANA Cloud Platform - many of these tools are there. You really have three options:

1) Build the app on HCP and download it locally to run against a local DB;

2) Build an app and run it on HCP against a DB; or

3) Build everything including the DB up on HCP and run it all there.

Your call. Your control. The cool part is HCP will continue to evolve and you don't have to do all the maintenance work on the tools. Not bad for ~$3K/month.


Comment From Fredy-UCSS

What is the impact in the WAN or Internet network when moving to the cloud environment? Will it be necessary to incorporate appliance devices to improve performance?

Chuck Kichler: HATE to say it - it depends! If you write light-duty apps, not bad. Most of us live off mobile apps over very tiny wireless networks, so bandwidth can be minimal. If you have large transfers, you'll have to plan for it by sizing the network accordingly. IBM does offer lots of POP and data center options so you don't have to go far. You also get free transfer between all IBM data centers - very different from our competitors. The appliance will only be necessary if your users are seeing poor performance. It would be similar if it was on-prem in your data center.


Comment From Michael C

We have a new standalone implementation in China using ECC and CRM to be hosted. Would you recommend Business Suite on HANA? Also, what cloud integration techniques have been used around GRC to avoid a separate instance of GRC, as we do have a global instance?

Chuck Kichler: Use of Suite on HANA (SoH) or S/4 is a business decision. I'm a big fan of S/4 as it exploits the capability of HANA. Your use of GRC will be mostly dependent on whether you set it up for multiple instances.
As to crossing WAN with GRC, I need to do some research, but there are some clever ways to make a WAN look like a LAN for applications that are sensitive to multi-hops.


Comment From Pranitha

What is the approximate cost involved for moving certain applications to cloud for a medium-sized company?

Susan Wallace: Pranitha, it is a tough question to answer not knowing the application, size, etc. Here is a link to our website, or we can do a TCO model with you and give you very specific pricing based on your environment.


Comment From Fredy-UCSS

Is possible to incorporate other solutions in the ECC interface, for example, Google Apps, Opensoft, or would we only use Office 365?

Chuck Kichler: SAP is getting better at being open, so you have support of ODATA, REST, JSON, etc. for standard APIs. You can get the list of available APIs, plus build your own by wrapping BADIs, BAPIs, etc. Lots on SCN on this topic.


Natalie Miller: As Susan and Chuck wrap up a few last questions, I first want to thank everyone who joined us today, and for your great questions. Just a reminder that the chat replay will be available at the conclusion of the event, and we will alert you when the edited transcript is posted.


Susan Wallace: Thank you, all. This was great Q&A chat. You all kept Chuck and I very busy. You will receive a link to the transcript. We hope this was helpful and we look forward to working with you in the future! If you would like to go deeper with our SMEs, register for our one-day free SAP on Cloud Roadshows.

Natalie Miller: Thanks again to all who joined today! For more on cloud services and IBM’s options for SAP customers, read the recent article by  Chuck Kichler  and Jan Jackman, visit the  SAPinsider Cloud Channel, or attend one of IBM’s upcoming  one-day forums on SAP in the Cloud. Learn more about the forum agenda and the upcoming dates across various cities –including Phoenix, Denver, New York, and Philadelphia –  here.

Chuck Kichler: Please feel free to reach out to me any time. You can follow me lots of different ways – LinkedIn, Twitter, and my blog here and posts here.  I'm not as diligent at blogging as I should be, but I'm working on it. :-)


Natalie Miller: Before we go, I want to again thank our panelists today. Chuck Kichler and Susan Wallace, thank you for joining us and supplying such great answers to our readers’ questions!

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