SAP Cloud: PaaS versus On-Premise total cost ownership

sap cloud versus onpremise mauricio rojas kio networks3

I have been invited next week to speak in Central America (Panama & Guatemala). The event is dedicated to present our SAP offering named SAX that stands for “SAP Advance Xperience”. We have been sometime ago walking and talking to customers about the offering and our advantages and a repetitive pattern comes up: customers inevitably compare on-premise solutions with our off-premise model.

This note is focus on giving some guidelines to bring a fairer comparison between our SAP cloud against your “build and support yourself” model.

Before going forwards, I have to say that last week we were recognized by SAP itself as the “SAP Latin America Partner Excellence Award 2014 for Managed Cloud as a Service”. Then, I want to use a few words more to congratulate to all experets that were involved in the construction of this product, and specially to Cloud, Storage, Yellow and Swat teams, Congratulations!

Let’s start.

First of all, I want to share a nice note by Derek Singleton called “5 Key Considerations When Comparing The TCO Of On-Premise And SaaS Systems”. Despite this note is about SaaS instead of PaaS, it brings good information about other components that you need to consider: management, hardware, capacity, uptime, security and so on. Also, you can read “SAP Managed Cloud as a Service (MCaaS)” presentation by VMS AG that brings info how to save 30% thru MCaaS vs OnPremise.

Let’s take out the SAP licenses cost for a moment on this comparison, probably you could buy them directly from SAP or any of their certified resellers, and you can opt to any financial help in the market to reduce this investment to affordable monthly payments. PaaS solution is mostly addressing “bring your own license model” that brings the following items to help you with the rest of the things:

  • Uptime: a cloud model like this not only provides servers, it provides “uptime”. That means this adds stand-by servers, cluster capabilities, redundant networks connections with different carriers (core devices in a multi-homed topology), backup on primary and secondary storage to avoid any lost of data due to hardware/software/human failures or corruption, monitoring at all levels, different security resources and considerations to avoid unavailability because of some threats, etc.
  • Knowledge & Management: we count on a hundred people with different skills to different systems (SAP is more than a couple of system types today). We provide basis and infrastructure support as part of the service for different Operating Systems and Databases. We have an Active Embedded Partnership with SAP that helps us to access SAP experts directly at any moment. Also we count on certifications like SAP Hosting and Run SAP to warranty the customer that we are blessed from SAP to bring such managed services (also, we’ve got the recognition for Managed Cloud last week). How much time and money you need to find the right and committed people to take care of something so important like your SAP systems? I am not talking about only the SAP specialists (usually you need more than one). I am also talking about the storage, security, backup, server, and network guys with experience to manage SAP systems, and the final challenge is making them work as a team.
  • Capacity: Now, you can start buying a couple of servers, but you need to ask yourself some things first:

How much time do you need to set them up? Weeks or maybe months? Are you sure this is what you need?

Did you consider infrastructure for DEV and QA? How do you think to resolve system copies and refreshes?

Will you get the right performance? Is your storage and network fast enough?

What are your plans to add additional capacity or speed in the future?Did you consider backup infrastructure?

sap cloud versus onpremise mauricio rojas kio networks

  • Security: Nobody can commit protection against 100% of the threats. At least, you can try to fight with the most common and dangerous ones before and after they occurred. More than firewalls, you need people that could help you to set them up with the appropriate rules for every SAP application and support them over the time; you have to set a DMZ with the right resources to protect the confidentiality/availability of your data/service. A good and fast backup solution to recover any threaten data affected from internal/outsides attacks (i.e. social engineering). Good monitoring solutions at any level (SAP apps, servers, storage, network, security) to detect problems in advance or get accountability of them. Also, we have something called “hardening multitenant” that warranty your performance and information end-to-end from storage to application.
  • Go-to-market: Let’s see again all the things that I have just mentioned and think for a moment how much time it is going to take you to get and put them to work smoothly. We already have everything ready to start working now for you today.

sap cloud versus onpremise mauricio rojas kio networks2

Probably we can add more items, but let‘s stop this part of our analysis here. Let’s review these items again and let’s price them!

Do you think you can replace them, in time, with just a bunch of servers? I don’t think so, and probably if you took the time to read this note, you don’t. Let us help you to build a business case gathering the required info from your SAP operation/ownership cost, and then we’ll show how much money your organization will save the next years. Yes, the next years, you cannot compare solution using the costs you need to budget for today, money value change over the time.

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