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SAP’s Way to the Cloud

SAP customers don’t like change—and for good reason. After all, mission-critical software is a conservative business, and SAP is the epitome of a conservative company. But even a company like SAP must eventually follow new trends like cloud computing to remain relevant and competitive.

In the past, SAP maintained a focus on developing solutions in-house complemented by solutions and technologies acquired externally. With a few exceptions, these solutions were tightly integrated in the portfolio and integrated with the standard technology. In any case, customers could choose to run these solutions on-premise or hosted by an SAP-certified provider.

It has been a long road from SAP’s early efforts with service-oriented architecture (SOA) in 2004 (called Project Vienna). SAP’s next cloud attempt was Business by Design, released in 2006. With the acquisition of SuccessFactors in 2011 and Ariba in 2012, SAP sent a signal to the market and its customers about its direction into on-demand software and cloud computing. Today, SAP follows a dual approach:

  • Supporting the deployment of Business Suite and NetWeaver on IaaS and PaaS offerings from Amazon, Azure, and certified service providers with real experience in running mission-critical business applications, including their own HEC and HCP
  • Acquiring established SaaS solutions to complement Business Suite, including Ariba, SuccessFactors, Fieldglass, and Concur

Given the current amount of change and transformation within SAP’s cloud strategy, this section provides only a snapshot of the current initiatives on which SAP focuses.

Classic SAP Solutions on the Cloud

In principle, all the classic SAP Business Suite and NetWeaver solutions described in Hours 6, “SAP NetWeaver and HANA,” and 7, “SAP ERP and Business Suite,” can be implemented on IaaS and PaaS offerings.

At this writing, SAP has certified 220 partners for hosting, 105 for cloud, and 35 for HANA. Among them are large service providers like Virtustream, T-Systems, Telstra, Suncore, Secure-24, NNIT, MKI, and Singapore Telecom; consulting companies like Accenture, Atos, CSC, CapGemini, Deloitte, and IBM; and specialized boutique providers like Freudenberg IT, Ciber, Finance-IT, OEDIV, Gisa, and Novis.3

SAP’s own hosting organization was sold to T-Systems and Freudenberg IT in 2009. SAP does not own or operate Hana Enterprise Cloud itself, either, but acquires the services from Softlayer, an IBM company.

The most prominent cloud providers offering SAP solutions are Amazon and Azure, even though they can’t offer anything other than IaaS. It has become a common practice in many enterprises to keep the mission-critical production systems on premise or at a classic full-service hosting provider, while utilizing cloud offerings for non-production systems that are needed only temporarily for development, testing, or training.

If you are a user, you will not see any difference in the way that the SAP Business Suite and NetWeaver solutions are operated; all the business processes should behave identically whether on premise or in the cloud, and the user interface should look exactly the same.

HEC Versus HCP

For the quite special demands of HANA, there are cloud options available from SAP (as well as from a variety of cloud service providers):

  • HANA Enterprise Cloud (HEC): Despite its name, HEC is not a cloud service but a classical hosting service for HANA. SAP sells the service on its paper, but the infrastructure is actually hosted by Softlayer. For certain solutions, SAP offers a subscription pricing as an alternative to the perpetual license option that continues to be available.
  • HANA Cloud Platform (HCP)4: HCP is a real subscription-based IaaS offering, aimed for development projects and providing HANA-based application services for a monthly subscription. Sizes ranging from 1 GB up to 1 TB can be ordered from the SAP Service Catalog Portal.

Both of these cloud offerings requires customers to buy their own HANA licenses. SAP recently announced that it would change the license model to a pay-as-you-go model, but the prices will rise from the “maintenance fee” of 22% to 50% of license list price per year.

Technically, all HANA cloud offerings are based on the so-called tailored datacenter integration (TDI) model that allows sharing server, storage, and networking resources.

Alternatively, SAP HANA App Services provides HANA instances with services for mobility, collaboration, security, systems management, and more—all orderable from the SAP Service Catalog Portal5 (see Figure 8.3).


FIGURE 8.3 Subscription page for HANA App Services on the SAP Service Catalog Portal.6

As discussed in Hour 6, “SAP NetWeaver and HANA,” the HANA cloud offerings start at a very attractive price level for small development environments. With more features and options, the price rises significantly, as shown in Figure 8.3. Even with a monthly subscription fee, an annual contract is required. Note that system provisioning can take up to 48 hours.

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