SAP Operations in the Cloud – Public, Private or SaaS?

Every 3-5 years companies take decisions about their future  SAP Operations. Should I stay In House using own IT staff, move to Public Cloud (e.g. Amazon, Azure), use a Private Cloud (e.g.Basis Consulting) or should I skip SAP entirely and implement a completely new ERP solution based on for example SaaS (Software as a Service)? Since most companies using SAP have  invested a lot of time and effort  in their SAP environment, the three first choices are the most likely. Then the question is, which of those three should I choose? Of course, there isn’t a “one size fits all” answer. Cost alone isn’t the answer, technology alone isn’t the answer, and security alone isn’t the answer either. In fact, none  of the answers are correct isolated, but normally a combination of these are. The right answer is the one that best enables the success of your business model.

If we skip the SaaS discussion and look at the difference between Public vs. Private Cloud, this table gives an indication of when to use what:

Public Cloud is suitable forPrivate Cloud is suitable for
The application need massive scale requirements (e.g. Dropbox, Netflix)The application is for your cooperation and the users are known
Rapid business growth (speed of deployment is important)Rapid delivery is important but not crucial for the business (days vs. months is OK)
Require Geo-DistributionThe users are geographically defined
SLA is not importantSLA is important
You trust the Public Cloud for your dataLaws and regulations don’t allow storing of data outside your region/country. Data security is important
Default security and compliance reports from public cloud vendor is sufficientCompliance and audit from internal or/and 3. party is required
Staffing is done by your own staff or a 3. partyOperation for the application is a part of the service
The application utilize stateless services ( any service instance can serve any request)The application is not stateless (e.g. the SAP Message Server)
Network latency is not an issue for the applicationNetwork latency can be an issue for the application
I/O subsystem is a not a critical componentI/O subsystem is critical (e.g. most SAP systems and specially HANA)
Integration to other systems by using stateless services (eg Web Services)Integration points are point to point, can be syncron and have a private network connection (e.g FTP, bank integration)
Acceptable to lose service without the possibility to call “public cloud” vendor for incidentsDuty on call service for the whole application chain is important
Local support in native language is not importantLocal support in native language is preferable
Acceptable to have planned downtime at public cloud vendor choicesInfluence on planned downtime is important

When looking at the table above  (and considering I am working for a Private Cloud company) the most obvious choice for a SAP (legacy) application is to go for a Private Cloud provider. That said, it’s also possible to run SAP applications in the Public Cloud and it has been certified by SAP since 2010. Each company has different requirements/needs and like all other answers in the IT business: It depends.

The Public Cloud vendors have reached far and they are delivering excellent services. Amazon’s Elastic Compute Cloud (EC2) recorded 2.41 hours of downtime across 20 outages in 2014, meaning it was up and running 99.9974% of the time. Those are impressive figures given the massive complexity of the service. For Azure, in year 2014, they experienced 92 outages totaling 39.77 hours.

The SAP note 1380654 gives more information about SAP support in Public Cloud.

But remember that “classic” SAP is not a true SaaS (Software as a Service), built as Gmail, Netflix, Dropbox etc. It’s an OLTP or OLAP application, usually with very high I/O requirements and a lot of interfaces that you need t to control. And SAP ERP “classic” with HANA is about as far from SaaS as you can come. It’s dependent on a Message Server,  a separate database and the IO requirements are enormous.

This is where SaaS comes in. SaaS is normally multi tenant applications like Gmail, Netflix and also SAP is shifting it’s focus and are now delivering SaaS applications like SuccessFactors, Concur, FieldGlass, Cloud 4 Customer and Ariba.

Multi tenant applications are maintained and supported by the software vendor. It’s built on a single platform, one single application, one code-line and multiple customers are residing within one Multi-Tenant framework. SaaS is usually also subscription based and you don’t buy a license and maintenance as we do for non SaaS products. It looks like more and more vendors are going in this directions and maybe in 20 years nearly all business applications will be in the public cloud. Until then, the safe choice is a Private Cloud – and Basis Consulting when we are talking about SAP.

Svein Kolden, BC employee

About Basis Consulting

Basis Consulting is certified as SAP Advanced Hosting Partner and SAP certified in SAP HANA Operation Services. Our Data Center is specially designed for SAP and we host 350 SAP systems for 200.000 end users. We keep SAP operation secure and simple for our customers.