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BRIAN BURKE
SAP IN THE
CLOUD
AN EXECUTIVE GUIDE
The definitive resource for successfully
establishing your organizations cloud
strategy for SAP solutions
SAP IN THE
CLOUD
AN EXECUTIVE GUIDE
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Brian Burke
SAP in the Cloud

An Executive Guide
From the publisher of SAPinsider

SAP in the Cloud: An Executive Guide
by Brian Burke
Copyright 2016 Wellesley Information Services. All rights reserved.

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ISBN 978-0-9906151-9-4
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About the Author
Brian Burke, IBM SAP Global Alliance Executive, has
been responsible for the IBM/SAP relationship for the
last twenty-five years of his total thirty-five years with
IBM. Brian is the IBM SAP Alliance go-to-market leader
for SAP HANA, for both IBMs on-premise Power solu-
tion and IBMs cloud offerings for SAP HANA in the
United States. He has been involved in all aspects of SAP
projects, including infrastructure, software, and services.
Brian has spent significant time at SAPs headquarters in Walldorf,

Germany, and at SAP Labs in Palo Alto, California, with both IBM and
SAP product development teams, as well as at the IBM SAP International
Competency Center. He is based in West Chester, Pennsylvania, within
minutes of the SAP Americas headquarters in Newtown Square.
The opinions expressed in this book are the authors and do not necessarily represent the
opinions of IBM.

Acknowledgements
The insiderBOOKS team would like to thank the many contributors

both named and unnamedwho made this, our first book, possible. We
look forward to a long and successful road ahead. And we cant wait to
hear what you, our readers, think about how were redefining reading.
Also, special thanks go to the team at Bohlin Carr, Inc. You guys are
miracle workers.

Contents in Brief
Foreword About This Book................................................................................13

Chapter 1 Introduction: Why the Cloud?........................................................15
Chapter 2 What Is the Cloud?...........................................................................19
Chapter 3 The Business Case for the Cloud.....................................................33
Chapter 4 SAP in the Cloud...............................................................................45
Chapter 5 Cloud Economics..............................................................................55
Chapter 6 Workload Analysis............................................................................75
Chapter 7 SAP HANA in the Cloud.................................................................87
Chapter 8 SAP Applications in the Cloud......................................................103
Conclusion ...........................................................................................................123
Appendix A Benefits Estimator Metrics.............................................................127

Appendix B Becoming a Digital Enterprise Starts with Cloud.......................131
Appendix C Melissa Kikizas S.A. Enters a New Era of IT...............................141
Appendix D Additional Resources......................................................................149
Figure Index ...........................................................................................................152

Contents in Full
Foreword About This Book..................................................... 13

Assumptions......................................................................................13
Chapter 1 Introduction: Why the Cloud?.............................. 15
Chapter 2 What Is the Cloud?................................................ 19

Enter, the Cloud.................................................................................21
Public Cloud..............................................................................21
Private Cloud.............................................................................21
Hybrid Cloud.............................................................................24
Hybrid Cloud Use Cases..........................................................24
What Does a Hybrid Landscape Look Like?.........................24
How Much Cloud?............................................................................28
Hybrid Is the Future..........................................................................30
Chapter 3 The Business Case for the Cloud.........................33

The Challenges of the Cloud............................................................34
Pacesetters, Challengers, and Chasers:
What We Learn from Cloud Adopters...........................................35
Lessons Learned from Pacesetters..........................................38
Cloud Considerations.......................................................................40
What Role Will You Take?........................................................40
What Are Your Business Drivers?...........................................40
What Are Your Current Resourcesand
Where Are the Gaps?................................................................42

Chapter 4 SAP in the Cloud................................................... 45
Drivers in the Move to the Cloud...................................................46
Driver #1: Budget Constraints.................................................46
Driver #2: Application Portfolio Complexity........................46
Driver #3: Rethinking Support Models..................................47
Driver #4: Aging Infrastructure..............................................47
Doing Your Due Diligence...............................................................48
Evaluate Current Scalability.....................................................48
Do Your Provider Homework..................................................48
Dont Shortcut Planning...........................................................49
Getting Cloud Ready.....................................................................50
Cloud Implementation: Customer Experiences............................53
Encouraging Implementation Lessons...........................................54
Chapter 5 Cloud Economics...................................................55

Estimating the ROI: Cost-Benefit Estimator.................................56
Example #1: Small High-Tech Company...............................57
Example #2: Mid-Size Manufacturing Company..................63
Example #3: Large Retailer.......................................................68
ROI as a Starting Point: Opening the Cloud Discussion.............73
Chapter 6 Workload Analysis..................................................75

Clearing Up the Confusion on Workload......................................75
Workloads Role in Evaluating Cloud Opportunities...........76
Workload Analysis Digs Deeper.....................................................77
1. Workload Characteristic Fit Analysis.................................78
2. Quantitative Workload Fit Analysis...................................79
3. Workload Assessment Analysis...........................................80
4. Workload Affinity Mapping Analysis.................................81
Pinpointing High-Priority Applications for the Cloud................83
Can We Do Without It?............................................................84
Troubleshooting for Transaction Speed.................................84
Cloud Discovery................................................................................85

Chapter 7 SAP HANA in the Cloud.........................................87
Two Flavors of SAP HANA..............................................................88
Breaking Down the Pieces.......................................................89
SAP HANA On-Premise Versus CloudHow Do
You Decide?........................................................................................91
An Introduction to TDI............................................................92
Sizing and Cloud Pricing..........................................................92
Getting the Sizing Right...........................................................93
Will It Fit?...................................................................................95
Too Mission-Critical for the Cloud?.......................................95
A Few Words on High Availability.................................................96
Security and the Cloud.....................................................................98
Migration Versus New Instance....................................................100
Migrating SAP S/4HANA..............................................................101
Chapter 8 SAP Applications in the Cloud............................103

Financials.........................................................................................104
SAP S/4HANA Finance in the Cloud...................................105
Modules in the Cloud.............................................................106
SAP Integrated Business Planning........................................106
Human Capital Management (HCM)..........................................107
Overview of Features..............................................................107
Integration with SAP ERP HCM...........................................108
Migrating SAP ERP HCM to SAP SuccessFactors.............112
A Look Ahead..........................................................................112
Customer Relationship Management (CRM).............................114
SAP Cloud for Sales................................................................114
SAP Cloud for Service............................................................115
SAP Hybris...............................................................................116
Business Intelligence and Analytics..............................................116
Supply Chain Management (SCM)...............................................118
SAP Business ByDesign..................................................................120
SAP Business One...........................................................................121
A Cloudy Attempt, Perhaps...........................................................122

Conclusion ............................................................................... 123
Case Study: Freescale Semiconductor, Inc...................................123
Case Study: Edwards Limited........................................................124
Cloud Considerations.....................................................................125
Appendices ............................................................................... 127

Appendix A Benefits Estimator Metrics.............................................................127
Appendix B Becoming a Digital Enterprise Starts with Cloud.......................131
Appendix C Melissa Kikizas S.A. Enters a New Era of IT...............................141
Appendix D Additional Resources......................................................................149
Figure Index.............................................................................. 152

FOREWORD
About This Book
Weve published this book for a wide range of audiences who are looking
for an introduction to, or an explanation of, SAP solutions for the cloud.
The purpose of this book is to provide an overview of the cloud and
an understanding of how SAP products work in it. It is ideal for executives
who want to learn about how to incorporate SAP and its cloud strategy
into overall corporate goals and objectives.
This book has been written for IT executives and managers who have
to explain SAP in the cloud to the executive team, partners, or cus-
tomers. The author goes into great detail on sizing, scaling, deployment
models, and practical steps to generate a business case for moving SAP
solutions to the cloudand the corresponding ROI.
SAP has built its latest solutions around SAP HANA and its fast pro-
cessing speed. SAP HANA is also intertwined with SAPs cloud strategy.
SAP in the Cloud: An Executive Guide explores SAP HANA options for the
cloud, as well as the next-generation SAP S/4HANA, which will serve as
the foundation for SAP cloud-based applications and hardware.
Finally, this book explains, at the ground level, how individual SAP
products for the ERP suite, including financials, human capital manage-
ment (HCM), supply chain management (SCM), and more, can be com-
bined with the cloud to increase reach, enhance customer access, improve
data collection, and more.
Assumptions
This book is for SAP customers or potential SAP customers. In all cases,
we assume you are familiar with SAP products.

CHAPTER 1
CHAPTER 1
Introduction: Why the

Cloud?
Im going to be very honest and frank about SAP, SAP HANA, and the
cloud. I dont want to sugarcoat this. Here are two things you need to
remember (and probably already know):
1. No surprise, but SAP solutions are not email. By that I mean you
cant throw an SAP solution in the cloud, push a button, and expect
it to work.
2. Not everything built by SAP is made for the cloudat least not
today. Will that change? Absolutely. But today, a move to the cloud
must be a carefully thought-out decision specific to your SAP envi-
ronment.
Many of you are probably thinking, Ive spent ten or twenty years and
significant budget on an on-premise SAP solution, and now all Im hearing
is, We have to be on the cloud.
Executives everywhere have been bitten by the cloud bug because,
not surprisingly, they perceive that there is a financial advantage to it.
And theyre on to something. The cloud has been shown to drive business,
powering expanded reach into mobile, social media, and big data, and to
provide greater business agility. Cloud projects have also calculated mea-
surable savings through resource pooling to reduce cost of ownership, and
through a more flexible architecture that better supports business changes
and improves customer reach.
Cloud confusion and concern, though, are often centered around
whether the cloud makes sense for the current SAP workload. How would
your enterprise activities and SAP processes run in the cloud? Which
resources should move to the cloud, and what are your options for making

1 | Introduction: Why the Cloud?
CHAPTER 1
this move? What about all the options: Private cloud or public? Managed
cloud? On premise or off premise? If you are confused, youre not alone.
SAP has been listening to the CEOs and CFOs of its customers and
potential customers, and has made a large commitment and commensu-
rate financial investment in moving its offerings to the cloud. If you are an
SAP customer, youve been hearing a lot from SAP about the cloud, and
you know the company is passionate about it, as are its partners.
At the same time that SAP is investing heavily in the cloud, SAP
HANA is revolutionizing SAP solutions, producing lightning-fast calcu-
lations to crunch massive amounts of data in the blink of an eye.
More recently, SAP released SAP HANA Cloud Platform, an in-
memory platform-as-a-service (PaaS) offering upon which SAP appli-
cations can be built, extended, and run. This dynamic cloud platform,
SAP believes, will accommodate an increasingly mobile, social, and
networked world.
And finally, the cloud is a driving force behind SAP S/4HANA, which,
make no mistake, is a complete recode of SAPs suite and solutions. Here,
the functional logic behind SAPs solutions is being rewritten to take
advantage of SAP HANA and the cloud.
In the traditional SAP three-tiered modeldatabase server,
application server, presentation serverthe application server is where
the business logic has always lived (see Figure 1.1). The developers of
SAP HANA have moved the business processes to the database layer and
eliminated the aggregate database indexes. This is a revolutionary shift in
SAP solutions.

Introduction: Why the Cloud? | 1
CHAPTER 1
3-Tier Native SAP HANA
Display UI rendering
Client rendered UI Client
Application server UI rendering

Control
App code Database interface
Extended
application services
Control
Queries
App code
DBMS Queries SAP HANA
Data Data
Figure 1.1 Traditional three-tier applications versus native SAP HANA

applications
Does this mean SAP is retiring the business suite? Not on your life.
SAP understands that not everyone is going to jump on SAP S/4HANA
right away. However, wherever you are on the adoption curve, there is a
roadmap for SAP S/4HANA that every SAP customer should be taking
into consideration.

1 | Introduction: Why the Cloud?
CHAPTER 1

CHAPTER 2
What Is the Cloud?
CHAPTER 2
When it comes to computing, the cloud is a misnomer. A cloud in the
sky is far off and remote, but a computing cloud can be as close as your
data center. And rather than being dispersed and lacking definition, a
computing cloud can be on a single dedicated server.
The cloud is simply a model of computing in which a shared
collection of servers, networks, databases, applications, and services can
be provisioned, usually requiring minimal management by the client or
service provider.
Before diving into the cloud, first consider another disruptive tech-
nology: the smartphone. The smartphone is everywhere, and its used for
far more than just making calls, texting, or web browsing. Think about
phones from an access-to-information perspective, and how they have
changed your business relationship with smartphone users. By tapping
into these new information streamsincluding apps and data transac-
tions across a mobile infrastructurecompanies are reinventing these
business relationships again by expanding their reach to customers and
by consuming the information that they are producing.
Here are the facts:
Ninety-one percent of all Americans keep their mobile devices
within reach at all times.1
By 2020, sixty percent of connected devices will have sensors and
automatic nodes.2
Source: Study by Morgan Stanley (http://blog.hubspot.com/blog/tabid/6307/bid/24082/9-

1
Amazing-Mobile-Marketing-Statistics-Every-Marketer-Should-Know.aspx).
Source: ABI Researchs Internet of Everything Research Service (https://www.
2
abiresearch.com/press/more-than-30-billion-devices-will-wirelessly-conne/).

2 | What Is the Cloud?
Eighty percent of all data is unstructured or semi-structured and is

growing at fifteen times the rate of structured data.3
This last point is an important one: We now live in a world of unstruc-
tured data. Twitter feeds, Facebook posts, LinkedIn updatesthey are all
set in fragments and segments. It is not data that typically goes into a rela-
tional database so that you can consume it, analyze it, and do something
CHAPTER 2
with it. This is now a world of Hadoop and big data and analyticsall of
these things help you organize and consume mass amounts of informa-
tion, and use it to your organizations advantage.
But thats not all. Consider that a growing source of data is not even
generated by people: The Internet of Things (IoT) is the consumption of
traditionally non-networked devicesanything from a cars sensors and
gauges to refrigeration units and appliances. Businesses today are now
folding in IoT data, crunching it, and using it to improve their processes,
their products, or their customers experience.
My company recently worked on a project for a company that runs
powerboat races and wanted to enhance the user experience by using data
generated by the gauges and sensors on the boats. The company wanted a
way to capture that information to enhance its viewers experience, both
live and on television, to enable them to access real-time stats from every
single boat.
Its not like this wasnt possible before the cloud. What the cloud
brings now, though, is the mechanism to receive that data, process it, and
make it available and useful to those who watch the race, whether its on
television or online. Before the cloud, the company could wire up sensors
and gauges, put the data they collectively generated on the network, and
then point that to some type of application running somewhere. Now,
with the Internet of Things, you can use templates to leverage, distribute,
and consume that information globally via cloud data centersin a much
easier and more standard way.
What can be done in the cloud is only limited by the imagination of
developers and the business needs behind them. But sorting out how to
get the most out of the cloud for your business requires some understand-
ing of exactly what the cloud is and what it can do.
Source: http://www-03.ibm.com/systems/data/flash/ap/downloads/CIO_summit_
3
presentation.pdf.

What Is the Cloud? | 2
Enter, the Cloud

The cloud comes in three flavors:
Public cloud: Typically virtual computing resources in an external
internet data center that is distributed across a large geographical
area.
CHAPTER 2
Private cloud: Similar to the public cloud concept in terms of
orchestration and automation, but deployed within a customers
data center (or managed by a third party).
Hybrid cloud: A cloud-based approach that is combined with one
or more IT deployment models.
I have found that the majority of SAP customers will find themselves
adopting a private or hybrid approach, for some very specific reasons I
will cover as we explore these three models.
Public Cloud
Public clouds are owned and operated by companies, such as IBM and
Amazon, that offer access over a public network to computing resources
that are likewise public. With public cloud services, users dont purchase
hardware, software, or supporting infrastructure, which is owned and
managed by providers.
When it comes to cloud-based SAP solutions, we are almost never
talking exclusively about a solution located entirely in a public cloud.
Some pieces may reside in a public cloudfor example, software-as-a-
service (SaaS) business applications such as exposed parts of a customer
relationship management (CRM) system, or a platform-as-a-service
(PaaS) offering for developing cloud-based applications (see sidebar on
the next page). However, most customers find that their SAP solutions are
far better serviced on a private cloud or hybrid cloud.
Private Cloud
When my team is talking with customers about running SAP solutions in
the cloud, ninety percent of those discussions are about a private cloud.
In a private cloud, the infrastructure operates solely for a single organiza-
tion, whether managed internally or by a third party. The infrastructure
can be hosted either internally or externally.

The Layers of Cloud Computing:

Understanding IaaS, SaaS, and PaaS
Infrastructure as a service (IaaS). The cloud, despite its
nebulous name, is a well-defined and precise set of computing
CHAPTER 2
assets linked to a network. With IaaS, there is a cluster or clus-

ters of physical servers that forms the cloud resource, consisting
of the hardware and the hypervisor, the low-level code that takes
inventory of hardware resources and allocates said resources
based on demand. The hypervisor also enables virtualization,
so the resources can be pooled if that is the customers desire.
With IaaS, processing, storage, networks, and other computing
resources can be provisioned so that a customer can deploy and
run operating systems and applications.
Software as a service (SaaS). SaaS provides network-based

access to commercially available software. Browser-based
examples include Netflix and Gmail. Some companies offer
entire suitesfor example, Microsoft Office 365 or Adobe Cre-
ative Cloudwhere the client is installed on the customers
machine but managed by SaaS.
Platform as a service (PaaS). The line between PaaS and the

other two layers, SaaS and IaaS, is somewhat blurred. PaaS
allows developers to build and deploy web applications on a
hosted infrastructure that contains both the computing plat-
form and services, which is the solution stack. The platform can
run on a wide variety of operating systems: Windows, Apple,
Linux, Android, etc. The solution stack is the operating system,
run time environments, source control repository, and all other
middleware upon which developers can build and deploy their
own applications.

Private clouds can take advantage of the clouds efficiencies while

providing more control of resources and steering clear of multi-tenancy
issues, in which apps or databases on a single server compete for resources
or even bleed into one another.
Typical features of a private cloud include:
A self-service interface to control services. This allows IT staff to
CHAPTER 2
quickly provision, allocate, and deliver on-demand IT resources.
Highly automated management of resource pools. This offers flexi-
bility for supporting everything from computing capability to stor-
age, analytics, and middleware.
Sophisticated security and governance designed for a companys
specific requirements.
To be a private cloud, there must be automation and orchestration
mechanisms to allow you to provision and deprovision services or even
servers. By automation, we mean patterns or automatic packages of
install standardsnot just a catalog of operating system (OS) types, but
a standard set of middleware and application packages. Orchestration
might require, for example, a tool such as VMwares vCloud Automation
Center. There should also be a clearly defined set of services, offerings
that can be presented to a non-technical user who might need to deploy
a stack of an application suite.
A private cloud can be deployed inside your companys data center
or managed by a third party, and it is fully customizable. It operates for
your company alone, so you can do whatever you want with it. Its secure
by design because it either resides inside your corporate data center wall
or adheres to the rigorous security standards of your third-party provider.
The vast majority of SAP implementations in the cloud are in a private
cloud or use some form of a private cloud.
Unlike a public cloud resource, which is very easy to access and for
which its very quick to spin up resources, private clouds are limited by the
size of the infrastructure you have built. With a public cloud, you can pay
by the hour if you need to, and you can provision and deprovision very
easily. But private clouds are generally paid for with an upfront capital
expense.

Hybrid Cloud
A hybrid approach is the intersection of classic or traditional IT and the
cloud. Currently, only a small portion of SAP cloud deploymentsmaybe
ten percenttake a hybrid approach; however, we see this as the future
of cloud computing using SAP solutions. Hybrid deployments come in
many forms and are somewhat more complicated to describe, hence why
CHAPTER 2
so much of this book will be devoted to discussing SAP solutions in a

hybrid landscape.
Hybrid Cloud Use Cases

What does a hybrid approach do from a business perspective? At a high
level, it produces flexible pricing with standard self-service offerings. The
hybrid cloud allows enterprises the flexibility to acquire many different
technical resources as needed. From the IT side, a hybrid cloud approach
provides simplification of managementthats the biggest thing.
For example, many retailers deal with high-business demand peaks,
such as during a holiday season. Rather than build out their technical
infrastructure based on the peak season demands and then have that
infrastructure sit idle for the rest of the year, retailers can implement a
hybrid cloud model. For day-to-day retail activity, these enterprises can
build out their on-premise infrastructure based on their normal, steady-
state needs; during peak periods, they can expand in the cloud by leasing
extra capacity.
Or perhaps a company has a typical IT deployment in a standard data
center, and it wants to leverage a cloud-based CRM solution. Upon imple-
mentation of that solution, the company is, by definition, in a hybrid state.
As this example makes clear, a hybrid environment does not necessar-
ily mean leveraging multiple cloud environments; its leveraging the cloud
with more than one IT deployment model.
What Does a Hybrid Landscape Look Like?

When we talk about hybrid cloud, we are also talking about a hybrid
landscape. Lets drill down into four scenarios that might require a hybrid
approach.

A common scenario is when a company needs its systems of engage-

ment (SOE), such as a customer-facing website or Facebook page, to
integrate with its systems of record (SOR), such as its SAP solutions (see
Figure 2.1).
SOR/SOE Secure Integration
CHAPTER 2
Private
Cloud Disaster
Recovery
Private Foursquare
Cloud SOR
Facebook
Twitter
SOR/SOE
Secure Integration TripAdvisor
SOR Amazon.com
Traditional IT
Figure 2.1 Hybrid scenario #1: Integrating systems of engagement with

systems of record
You might have some back-end system that runs inside your data
center, and you want pieces and parts of the data in that system to be
available to mobile users around the world. How do you do that? You can
build out a mobile app, put it in the cloud, and distribute it globallyand
have it securely reach back into that back-end system to provide the data
so it doesnt have to leave the confines of your data center.

You could also develop an application in a pay-by-use model, and

when its ready for production, you can port it either into your on-premise
private cloud or into a traditional deployment in your data center (see
Figure 2.2).
Independent Workloads
CHAPTER 2
Private Public
Cloud Cloud
Hybrid
Production Management Dev/Test
(On-Premise Cloud) (Off-Premise Cloud)
Pre-Production
(On-Premise Traditional IT)
Figure 2.2 Hybrid scenario #2: Managing independent workloads
The hybrid model is similar to another model of years ago when stra-
tegic outsourcing became the vogue. When companies hired vendors for
strategic outsourcing, someone had to have the role of managing and
maintaining those contracts and making sure those outsourcing organi-
zations were adhering to the service-level agreements (SLAs) and per-
forming all the tasks they were contractually obligated to do.
With the advent of all of these cloud deployment models, there has
to be a role for someone within the organization to understand all of the
cloud resources that you are leveraging, know how you are leveraging
them, and ensure that your provider is adhering to the SLAs and other
contractual obligations. While there are tools to help track this, this is a
role that we describe as a cloud service broker (see Figure 2.3).

Hybrid Cloud Management

Cloud Service Broker
Aggregation
Private Savvis
CHAPTER 2
Cloud Governance
Amazon Web
Billing Services
Salesforce
Integration
Microsoft Azure
Customization
Facebook
Implementation
Traditional IT Management Twitter
Figure 2.3 Hybrid scenario #3: Serving as the cloud service broker
Many clients who build private clouds will, at times, conduct activ-
ities that will require additional capacity for a short period (a seasonal
business fluctuation, for example). Therefore, they will have an orches-
tration mechanism within the private cloud to reach into a public cloud,
provision those resources, and then deprovision those resources once the
capacity issue is over (see Figure 2.4).

Capacity Access
Private Public
Cloud Cloud Service
Hybrid
CHAPTER 2
Modeling/Simulation Modeling/Simulation
Workload Over Capacity
Client Data Center
Figure 2.4 Hybrid scenario #4: Accessing overflow capacity
How Much Cloud?

Cloud applications might run on dedicated or shared cloud systems, on
premise inside your organization or off premise through a vendor.
Remember that, by definition, a hybrid cloud model is the con-
sumption of two or more IT deployment models (see Figure 2.5). And
remember, both models do not have to be cloud. So you could adopt
an enterprise, traditional IT model coupled with some computing
resources or SaaS offerings that youre leveraging inside of other public
cloud providers.

Cloud Native Apps/Services
CHAPTER 2
Enterprise Cloud Enabled
Applications
Traditional IT Dedicated Dedicated Shared

On-Premise Off-Premise Off-Premise
Cloud Cloud Cloud
Figure 2.5 Hybrid cloud defined: A hybrid model is the connection of one or
more clouds to on-premise systems and/or the connection of one or more
clouds to other clouds
You could also have deployed applications to a private cloud built

within the confines of your data center, or you are running automation
and orchestration alongside of the traditional IT deployment model that
you have inside your walls, as well. That could be considered a hybrid state
in this definition.
There are many use cases for a hybrid approach. Start with an appli-
cation you have deployed in a public cloud. The data produced by that
application might be needed by another application deployed inside your
enterprise data center. The integration involved in transferring that data,
by definition, puts that in a hybrid transactional state.
To improve composition, orchestration, and management of your
SAP workload, you could build out a private cloud of all the automa-
tion and orchestration mechanisms that the cloud offers. You could also
orchestrate the provisioning and deprovisioning of resources within the
public cloud from that private cloud infrastructure.
If you look at the two arrows back in Figure 2.5, the top arrow rep-
resents native cloud apps and services. These follow the development of an
application in some form via an off-premise cloudAWS, IBMsimply
porting it as its running to other cloud deployment models. The bottom

arrow follows an existing, traditional IT application that is running in

a traditional IT data center and migrating it to one of these other cloud
deployment models.
For example, lets say an organization puts a team of developers on a
project to develop an application, but they only want them spending fifty
percent of their time in doing so. Instead of setting up an infrastructure
CHAPTER 2
to develop that application, they can provision computing resources in

the cloud, pay by the hour, use them when they are needed, and then spin
them down when theyre not. Once that application is developed, built,
and ready to run, they can simply port that running application over to
the traditional enterprise data center to run in production.
Hybrid Is the Future

Here are some fun facts about where the cloud is heading (see Figure
2.6): Seventy-six percent of business users, IT leaders, and cloud vendors
expect hybrid clouds to be the core of their cloud strategy.4 Theyre talking
about the IT strategy, not the business strategy. The business strategy isnt,
I want to run in a hybrid cloud landscape. The business strategy really
is, I want my business to leverage IT in a way that helps me to optimally
run the goals of my business. Theres a lot of cloud talk out there, but
throughout it all, just remember that theres a difference between the IT
strategy and the business strategy.
Source: http://www.northbridge.com/2013-future-cloud-computing-survey-reveals-
4
business-driving-cloud-adoption-everything-service-era-it.

The road to hybrid computing

Faced with diverse workload requirements, organizations are coming to realize that the
future of cloud computing lies in the hybrid space, and private clouds are an integral part.
CHAPTER 2
Public
27% Hybrid use
43% Private
Today
In 5 years
76% of business users, IT leaders, and cloud

vendors expect hybrid clouds to be the core
of their cloud strategy, overtaking public
and private clouds in the next ve years.
Figure 2.6 Planned or unplanned, customers are finding themselves leverag-

ing public and private cloud adoption to build hybrid landscapes5
The point of aligning your business strategy with your IT strategy is

to understand, from a business standpoint, how you want to leverage the
resources. Some will be better to keep in house. Some warrant building
out on a private cloud to take advantage of all the automation and orches-
tration when you dont feel comfortable taking those applications and
workloads and putting them in a public cloud infrastructure.
The act of combining all thatthats how you build your hybrid land-
scape. By aligning the business strategy with the IT resources, you can
come up with the proper hybrid landscape for your business.
Source of statistics in Figure 2.6: http://www.northbridge.com/2013-future-cloud-

5
computing-survey-reveals-business-driving-cloud-adoption-everything-service-era-it.

CHAPTER 2

CHAPTER 3
The Business Case for

the Cloud
The cloud empowers business growth. Im sure youve heard that over
the past several years. What do I mean by that? Here are three business
CHAPTER 3
opportunities the cloud affords:
Strategic reinvention. With the advent of the cloud, organizations
are being forced to reinvent their relationships with their custom-
ers. There are all kinds of social media data and mobile apps out
there. Enterprises have to reinvent these relationships by accessing
the information streams that their own customers are producing.
Better decisions. This touches on the big data and analytics oppor-
tunities that the cloud offers. Let me give you an example. We have
a customer that runs a global annual sporting event. This year, the
company wanted to build its web presence and expand globally,
with an enhanced user experience over other sporting event web-
sites. It built out its web infrastructure, distributed it globally via
our cloud, and then used analytics from social media data like
Twitter and Facebook to predict when traffic was going to hit
the website during that two-week sporting event. Armed with
those analytics, the customer could automatically provision extra
resources in the cloud to handle the expected spikes in traffic.
When the peak ended, it could simply deprovisionand all this
was happening automatically.

3 | The Business Case for the Cloud
Deeper collaboration. Organizations can embrace flexibility by

tapping into point solutions that are available in the cloud. For
example, you might have a three-tiered application you deployed
in a public cloud. On the database layer, you really want some addi-
tional security beyond what is provided by the OS and the database
product. You want a third-party external security solution. Instead
of having to implement, purchase, install, and support that security
solution, you can tap into, as a service, a solution provided in the
cloud.
Studies have shown that organizations that are doing all three of these
things are reporting almost two times greater revenue growth and nearly
two-and-a-half times greater gross profit growth than their peers.1 But with
opportunities come challenges.
CHAPTER 3
The Challenges of the Cloud

While cloud leaders have reported impressive competitive advantages
from cloud computing, they also will be the first to say that the cloud
journey has not been easy. There is a growing consensus among industry
leaders that cloud deployment introduces greater complexity into orga-
nizations. There is a continuum of implementation challenges that are
dependent on a variety of factors, such as security and compliance, ser-
vice and operations management, cost management, and more.
Another source of complexity is not technological, but cultural.
Adopting the cloud in a meaningful way is more of a business transforma-
tion than a technological one. Many enterprises struggle with the change
management challenges that a cloud deployment model imposes. There
are often individuals within an enterprise that resist change for a variety
of reasonssome not so obvious. Shifting from an on-premise model to a
cloud model, especially when partnering with a cloud provider, can result
in either reductions in workforce or redirecting staff, provided they have
the right skills. The cloud also forces companies to think big when they
might be oriented toward smaller targets.
However, for the leaders of the cloud revolution, complexity is
not hampering their achievements. Our findings suggest that leading
Source: IBM Center for Applied Insights, Under cloud cover: How leaders are acceler-
1
ating competitive differentiation, 2013 (http://www.ibm.com/cloud-computing/files/

Under_the_Cloud_Cover_2013.pdf).

The Business Case for the Cloud | 3
organizations have found ways to conquer it. To simplify integration

and connect broad ecosystems, they favor open-source cloud platforms.
To capitalize on the strengths of both public and private cloud, theyre
more likely than their peers to use hybrid cloud infrastructures. And to
cope with constant technology change, experimentation has become a
way of life.
When considering the cloud, there is a question of agility versus opti-
mization. An on-premise data center is normally highly optimized and
customized to the customers requirements. In the cloud, there usually is
a trade-off between optimization and a much more agile, standardized
platform, which usually comes at a lower cost. The leaders of innovation
in the cloud recognize this, but they are also some of the biggest champi-
ons of the clouds shift from an efficiency play to a growth play.
CHAPTER 3
Pacesetters, Challengers, and Chasers: What We
Learn from Cloud Adopters
In an IBM survey of more than 800 executives from around the world,2 all
of whom have influence on cloud decisions for their respective company,
the cloud was on everyones mind. The cloud looks to be quickly outpac-
ing traditional IT as a perceived source of competitive advantage in the
years to come.
In this study, business leaders see the cloud as a mature, stable, and
reliable solution for solving business challenges and increasing competi-
tiveness. Where once cloud services were viewed as simply a less expen-
sive alternative to IT expansion, today they are viewed as a source of
product innovation, if not as the platform by which businesses can be
built and operated.
Figure 3.1 depicts how we grouped respondents organizations as
pacesetters, challengers, or chasers. The Y axis shows the adoption level
of cloud services. And the X axis depicts individuals who believe they
get a competitive advantage through the cloud.
Source: IBM Center for Applied Insights, Under cloud cover: How leaders are acceler-
2
ating competitive differentiation, 2013 (http://www.ibm.com/cloud-computing/files/

Under_the_Cloud_Cover_2013.pdf).

High Pacesetters
18%
Adoption level
Challengers
51%
Chasers
31%
CHAPTER 3
Low
Low High
agreement Gaining competitive agreement
advantage through cloud
Source: IBM Center for Applied Insights, Under cloud cover: How leaders are accelerating competitive
differentiation, 2013 (http://www.ibm.com/cloud-computing/files/Under_the_Cloud_Cover_2013.pdf)
Figure 3.1 IBM surveyed over 800 cloud decision makers; we categorized
respondents organizations into three groups based on their level of cloud
adoption and whether theyve reported seeing competitive advantage from
the cloud
The top group, pacesetters, lead adoption of the mobile revolution

when it comes to customer engagement, and the cloud is at the center of
these initiatives (see Figure 3.2). Pacesetters are expending considerable
resourcesin personnel, expense, and timeto focus on the data gener-
ated by mobile and social applications and platforms.

Mobile
100%
50%
100% 50% 50% 100%
Analytics Big data
50%
CHAPTER 3
Pacesetters
100% Chasers
Social Business
Figure 3.2 For the majority of pacesetters, cloud is integral to their mobile,
social, and analytics initiativesand the big data management challenges
that often come with them
As much of this data is semi-structured, they are incorporating tools

that are designed specifically for performing business intelligence func-
tions in this environment and then integrating analytics gleaned from this
data with their current data warehouse analytic tools.
If you look at this top eighteen percent, organizations that distrib-
uted data globally and were using analytics to monitor social dataand
automatically respond to what users wantedall fall into this group. They
have a high adoption rate. They are adopting a lot of different types of
cloud services, and they feel it is providing them a competitive advantage.

Lets go back to our sporting event customer example. This paceset-

ting organization perceives that, when users come to their site, they enjoy
a positive user experience because they can accurately provision compute
powergiving them a competitive advantage over other sporting event
websites that produce the same content.
When our study compared the publicly available financial perfor-
mance data of pacesetters, challengers, and chasers, we found that con-
sistent to the perceived advantage, pacesetters were outperforming, with
higher revenue and greater gross profit, on average, than their peers who
were challengers and chasers.
The middle challengers, comprising fifty-one percent, are even more
interesting. The companies in this group that have a high adoption rate
of cloud services dont perceive that they are gaining competitive advan-
tage by doing so. For them, they perceive the top driver is collaboration
CHAPTER 3
putting point solutions into the cloud to make them more accessible, for
example. Others in the challenger category see the cloud as a way to gain a
competitive advantage, but they arent doing a lot yet in the cloud.
The bottom thirty-one percent, the chasers, are typically companies
testing the waters. They are beginning to provision resources in the cloud.
There is no real strategy in doing sothey are toying with it, moving
single workflows there to see what works and what does not, but usually
without a clearly defined strategy.
Lessons Learned from Pacesetters

Pacesetters, as we have defined them, are more than twice as likely to
employ the cloud to reinvent and redefine relationships with customers
(see Figure 3.3). They are almost three times as likely to employ analytics
on cloud data to derive actionable insights. And they are slightly less than
twice as likely to use the cloud to seek and collaborate with expertise and
talent to help them drive their business.

Strategic reinvention Better decisions Deeper collaboration
136 percent more likely 170 percent more 79 percent more likely
to use cloud to reinvent likely to use analytics to rely on cloud to locate
customer relationships extensively via cloud and leverage expertise
to derive insights anywhere in ecosystem
Pacesetters 59% Pacesetters 54% Pacesetters 61%
Chasers 25% Chasers 20% Chasers 34%
Figure 3.3 The hallmarks of pacesetters: The cloud helps fuel their compet-
itive advantage through strategic reinvention, better decisions, and deeper
collaboration
CHAPTER 3
Our research has found that pacesetters use a three-step process
toward cloud adoption:
Think it. Pacesetters create a business strategy and align their plan
with the appropriate IT resources for that strategy.
Build it. They build out the cloudbe it private, public, or hybrid.
Tap into it. They jump into SaaS offerings, especially for point
solutions to complete or augment business processes.

Cloud Considerations
Now, lets apply what weve learned from pacesetters to take a holistic view
of how you will approach the cloud.
What Role Will You Take?

You first must determine which role your organization will take in using
and operating in the cloud:
Cloud consumer. This is the largest category, and it is self-
explanatory. Most of the customers we work with are looking for
help in planning to be a consumer of cloud resources.
Cloud provider. On occasion, well have customers who think
they are on the path to be a cloud consumer, but then they come to
CHAPTER 3
understand via their business strategy that becoming a cloud pro-

vider might be a strategic advantage. For example, we had a client in
the Caribbean that realized it could be the hub for cloud resources
in its industry because no such cloud services existed in the region.
Cloud broker. These are middlemen between cloud consumers
and cloud providers. Theyre a very small group, but theyre grow-
ing as cloud services continue to expand.
What Are Your Business Drivers?

We have an exercise where we will sit down with customers and present
twelve to fifteen business drivers. We ask them how much weight they
would put on each driver. Then we pick the top two or three drivers, and
we walk them through the success criteria for achieving those drivers.
Figure 3.4 shows four typical mileposts that bring customers to the
cloud. In this example, lets use a pharmaceutical company.

Gain Agility
Reduce Total
Cost of
Ownership
Cloud Consumer
Reach New
Markets
Increase
Speed to Value
CHAPTER 3
Cloud Role Business Drivers
Figure 3.4 After understanding which role you would like to take in adopting
cloud, the next step is to focus on your key business drivers for cloud adop-
tion; four examples are shown here
If one of our business drivers is to gain agility, how will we know

when we move to the cloud that were actually gaining agility? One such
metric would be to increase the number of clinical trials managed per IT
full-time equivalent (FTE) by forty percent, thereby shrinking the amount
of people resources required to manage that environment.
If our business driver is to reduce total cost of ownership, we can
actually put a dollar figure metric on itfor example, establishing an
objective of a fifty percent reduction in environmental costs for new clin-
ical trials.
If our business driver is to reach new markets, our metric could be
that we want to be able to launch a new sales office in an emerging market
in less than two weeks.
If the business driver is to increase speed to value, we can establish
a KPI of launching a clinical trial in an emerging market country in fewer
than five days, for example.

What Are Your Current Resourcesand Where Are the Gaps?

Once you establish the business drivers and related metrics, then you have
to determine what resources and infrastructure you will need to achieve
those objectives. This will require a gap analysis to take all the dimensions
of your operating model and determine how far away you are from imple-
menting the cloud properly to satisfy the business requirements attached
to that major driver.
Figure 3.5 is a simplified version of the output from an exercise we
use with clients when identifying gaps.
Open Model Dimension Rating Comments

Cloud Consumer Infrastructure is less than 50%
Technology 2 virtualized
+
CHAPTER 3
3 Close customer centricity is

Customer Experience already in place and effective
Finance and IT processes are not
Processes 2 setup to be dynamic in nature
Reduce Total
Cost of Assets and Locations 1
Global business units still insist
on localizing their assets
Ownership
Procurement systems only
Sourcing and Alliances 2 support a one-time PO process
Reach New for purchases
Markets
There are very few steering
Organizations and
Governance
1 committee meetings between
IT and market business units
Current metrics are focused on

Performance Metrics 1 system up time only
Cloud architecture and cloud

Skills and Capabilities 1 environment management roles
do not exist
Cultural Underpinnings
Figure 3.5 An example assessment: Evaluate key dimensions of your

operating model for gaps so that you can optimize your adoption of cloud

Another way to look at this is to imagine it as a four-step process (see

Figure 3.6):
1. Establish how you would like to operate in the cloudthat is, what
your role will be.
2. Define your strategy and criteria for success.
3. Assess your current organization and imagine your future state.
4. Identify gaps, and produce a roadmap for change.
Once you have identified the business drivers and success criteria,
and after you have conducted a gap analysis, your next step will be to pro-
duce a roadmap to take your SAP systems into the cloud.
1 2 3 4
CHAPTER 3
Establish how Assess your Identify gaps
Define your
you would like organization and create a
strategy and
to operate in the and create roadmap for
success criteria
cloud future state change
Figure 3.6 Four practical steps to adjust your operating model for a move to
the cloud

CHAPTER 3

CHAPTER 4
SAP in the Cloud
When you think about SAPs ERP solutions, you might not immediately
think cloud. Famous for its tightly integrated, configurable, indus-
try-driven applications with all the security, sophistication, and service
that come with its transactional and back-office abilities, SAP might even
seem incongruent with the wild west of the cloud.
Running SAP systems in the cloud is not just about technology, how-
ever; its about a wholesale change in business model for SAP. If you go
back in history, youll find that SAP was one of the first companies to
embrace the concept of core competency. It realized early on that its core
competency was developing and selling business software and left other
companies to handle the database (Oracle, Microsoft), the operating
system (HP, Linux, Microsoft), and implementations (Accenture, IBM).
CHAPTER 4
The cloud has forced SAP to revisit its model and broaden its focus to
include an infrastructure for hosting and flexible licensing. Its core com-
petency is now focused not just on its solutions, but on the delivery of its
solutions as well.
There are some concerns with moving SAP solutions to the cloud:
security, performance, andlets not kid ourselvesjobs lost to the cost
savings resulting from moving on-premise solutions to a hosted cloud.
And todays global companies are truly thatglobal. When moving to the
cloud, another concern is finding partners who will function not only in
Europe, Asia, and North America, but also in South America, Africa, and
areas with limited infrastructure.
There are all kinds of concerns, but instead of dwelling on them, orga-
nizations should focus on the big picture: How do they make the transi-
tion to the cloud go as seamlessly as possible?
The cloud gives you options. You have the flexibility, for example, to
determine whether you are going to continue to work with Basis. Some

4 | SAP in the Cloud
customers are keeping Basis in their shop for SAP ERP Central Compo-
nent (SAP ECC), but for SAP HANA, they are taking that outside.
The other facet isnot only is your cloud footprint flexible, its also
fluid. If you decide later that you want to bring Basis back in, you can.
Drivers in the Move to the Cloud

When you look at the cloud, at SAP, and at SAP HANA, the drivers will
be very familiar, but the realization of those drivers is somewhat different.
Driver #1: Budget Constraints

Organizations have flat or declining budgets with increased expectations
of quality and responsiveness. Many organizations look to the cloud as
a way to contain expense, moving from a capital expense approach to a
pay-as-you-go approach.
SAP HANA in the cloud, however, is not paid for by usage. Tradi-
tional SAP systems can be measured using the transaction-based unit
known as SAPs. Therefore, if you move a traditional SAP ECC system
to the cloud, it could be measured and paid by usage. But not so for SAP
HANA, as it is an in-memory system priced by size of memory. (For more
on sizing, see Chapter 7.)
CHAPTER 4
Driver #2: Application Portfolio Complexity

Ongoing support of the legacy portfolio is causing a budget drain for
some organizations, and SAP instances have multiplied to address tacti-
cal, versus strategic, needs. The ongoing complexity of SAP systems and
the corresponding modifications and integrations require a substantial
commitment of labor and expertise to maintain without declining perfor-
mance and reliability.

SAP in the Cloud | 4
Driver #3: Rethinking Support Models

Increasing support costs limit the ability to fund business initiatives,
which in turn hampers enhancements and improvements. Also, skillsets
required to support innovation and changing SAP solutions are evolving
and expanding.
Driver #4: Aging Infrastructure

Many companies have existing infrastructure that is heading toward or
has hurtled past its expiration date. ERP solutions and components may
be misaligned or have been added ad hoc. This is combined with increas-
ing costs for floor space, energy, maintenance, integration, and storage.
Depending on where you are in the life cycle of your SAP solutions,
consider the timing of your transition to SAP HANA. If you just invested
in servers for an on-premise implementation, you may want to postpone
your next move to the cloud. However, if you are facing a major infra-
structure refresh, this is a great time to look at SAP HANA and think
about the cloud. If you are coming to end-of-lease with your on-premise
infrastructure, that is another terrific opportunity to move to SAP HANA
in the cloud.
The advantage of SAP solutions in recent history is that they have
CHAPTER 4
been easy to expand as the business grows. You add a plant? Bring in an
app server. From an infrastructure standpoint, SAP has made it relatively
easy to expand. But that has also made some companies susceptible to IT
sprawl. Costs are escalating and, worse, are not manageable.
SAP then rolled out SAP HANA, which followed a very differ-
ent approach. Here was an on-premise appliance, and everything you
needed was in thereno changes or modifications needed. (In fact, if it
is changed, the entire appliance has to be recertified by SAP, which adds
significant cost per model for the hardware vendor.)
This appliance model solved the problem of having to support thou-
sands of variations of hardware and OS.
Then, in 2014, SAP HANA changed again. Anyone who went for SAP
HANA now had three choices: the on-premise appliance, SAP HANA on
the cloud, and a hybrid approach that includes both.

Doing Your Due Diligence

Heres what you need to know: If you havent yet gotten started with SAP
HANA, your SAP HANA journey will be very different from what youve
experienced with other SAP projects. Here are some important consider-
ations and potential pitfalls.
Evaluate Current Scalability

SAP HANA can pose a challenge to scalability, depending on the solution
and how you use it. For SAP BW on SAP HANA, scalability is not much of
a hurdle. If your 512-gigabyte SAP BW on SAP HANA system outgrows
itself, you can scale it out by adding another 512-gigabyte server and run-
ning them together as two nodes. But SAP BW is not mission critical. If
you want to run an SAP ERP system on SAP HANA, you need to scale it
up because it is a transactional system. Instead of expanding the system,
you have to trade in your 512-gigabyte system for a one-terabyte one.
CAUTION: If you start a cloud project, you need to be certain

that the cloud can handle your system when you finally hit
the button for production. Make sure your cloud vendor can
handle your scaling and SAP HANA size needs. Typically,
CHAPTER 4
any systems over two terabytes need to use an SAP HANA

appliance (or IBM Power system, which is not an appliance)
at the cloud data center site.
Do Your Provider Homework

When you start adding servers to a scale-out environment, typically
customers go through a processRFP, procurement, pricing, shipping,
getting it off the loading dock, and plugging it into the wall. Many SAP
customers are finding that they eliminate these steps by moving to a cloud
provider and leaving the infrastructure to that provider.

TIP: What should you avoid with a cloud vendor? First,

whatyou dont want is a cloud provider trying to squeeze in
multiple SAP instances and workloads on a system that may
be too constricted. We call this noisy neighbor syndrome,
and it can create performance issues. The key is to have
reasonable, realistic, and rational service level agreements
(SLAs). A good SLA should protect you.
Dont Shortcut Planning

As you look at your strategy for SAP Business Suite on SAP HANA and
SAP S/4HANA, always remember we are talking about potentially mis-
sion-critical systems. Doing it right from the beginning is key. This is why
planning becomes so critical when it comes to making the decision on
whether to go with an on-premise, cloud, or hybrid solution.
TIP: As you evaluate your current systems, remember your

corresponding non-production infrastructure. Over the
years, we have found with relative consistency that for every
production system, there are three to five non-production
systems.
CHAPTER 4

Getting Cloud Ready

Having done your due diligence, you need to get to what we call a cloud-
ready state (see Figure 4.1).
Opportunity: Multiple-Step Transformation

CLOUD ready
Drivers:
Reducing IT costs (space, cooling, power, admin, etc.)
Standardization (apps, infrastructure, services, process)
Agency directives (e.g., OMB, commerce) SHARED RESOURCES
Removing user complexity Self-service, pay per usage,
Mass data aggregation multitenancy
Fine-grained services
CapEx vs. OpEx
AUTOMATE
Understand utilization
Culture/boundaries Provisioning, ILM, HA/DR,
management
OPTIMIZE
Operational eciency
Inhibitors:
Diverse heterogeneous apps/platforms/OSs
VISUALIZE Widely distributed compute and storage systems
Increase utilization Significant security requirements
New capability requires significant investment
Configuration management baselines and
CONSOLIDATE processes (human intensive, error prone, and
Physical infrastructure ineffectually supported by IT)
Stakeholder culture, boundaries, funding sources
Figure 4.1 With an understanding of your cloud drivers and inhibitors, you
can begin your organizations journey to become cloud ready
CHAPTER 4
To get there, you need a methodologyan approach to IT optimiza-

tionthat will get you ready for the cloud. At IBM, we use a step-change
methodology in which each step can pay for the next step, if thats how
you want to structure it (see Figure 4.2).

IT service management
Potential:
Unlimited
savings
Introduce policy-driven
Cloud self-management
Service-level managers
and policies
Potential:
Business value
20% savings
Manage dynamic infrastructures
Automate Provisioning, automation scripts, IT service
management, and dynamic infrastructure
Potential: management
10% savings
Enable flexibility of resources
Virtualize LPARs, virtual machines, SAN, and virtual file systems
Potential:
10% savings
Prepare the transition
Simplify Harmonize release levels, consolidate systems,
and eliminate unneeded resources
Business flexibility and responsiveness
Figure 4.2 IBMs four-step methodology to optimize IT and get you ready for
the cloud
If you are starting from an on-premise system, there are tools to vir-
tualize your landscape, transforming it into a form of a private cloud. For
example, SAP offers a tool called SAP Landscape Management, which
automates manual tasks.
CHAPTER 4
You want to make sure that as you move up the steps, whatever you
end up doing enables you to be flexible, cost-effective, and most impor-
tantly, enterprise-ready. That piece is mission-critical.
TIP: If you are running SAP Business Suite on premise, you

can move all of it into a cloud-based environment within your
own data center. Is it 100 percent true cloud? No, because
youve still got to buy or lease the hardware. But it will look
like cloud to your end users.
You have options. When people think about cloud options for SAP
systems, especially SAP HANA, they are really looking at an off-premise,
hosted cloud environment. When SAP sells you SAP Cloud powered by
SAP HANA, they can sell you SAP HANA Enterprise Cloud as a monthly
operating expense subscription. You get the software license, you get

services from SAP, and you get the cloud by the month. Or, you can get a
perpetual license, and then pay for the cloud in addition.
There are significant savings possible. Weve seen it with numerous
SAP cloud projects.
We have found that customers have this complex, on-premise world,
with multiple middleware packages and multiple security packages. The
bigger you are, the more complex the world tends to be. And you are
paying for all of that.
If you really look at all the different licenses you are paying for, it can
be significant. So one thing you are doing by moving to a cloud environ-
ment is simplifying your landscape. You now have, behind the curtains,
one cloud provider who is handling security, software, hardware, admin-
istration, and all the other detailsand you pay for it as you use it.
The downside is that if youve already invested in your on-premise
software packages, you may be out that investment if moving to cloud has
become a priority for your organization.
Heres an example of a hybrid approach (see Figure 4.3). Even though
its an integrated system, you can see it is still highly interdependent on
other business processes or systems.
CHAPTER 4
Integration leads to new and improved business processes

On Premise Private Cloud Public Cloud
Managed cloud-as-a-service Platform-as-a-service Software-as-a-service
SAP HANA SAP HANA Cloud Line-of-business

Customer Enterprise Cloud Platform applications
SAP Systems SAP Business Suite Build Extend People Customer
Offering SAP Business Warehouse
Run applications Finance Supplier
SAP HANA datamart
Any
SAP HANA SAP HANA
database
Infrastructure Common infrastructure (servers, network, storage)
Benefit Cloud as a technology enabler Cloud as a business service

Area
Core applications Next-generation applications
Hosting Cloud Client infrastructure/IBM Cloud Run by SAP on SAP cloud
Services Services IBM SAP SI and AMS delivery IBM SAP SaaS SI and AMS delivery
Figure 4.3 An end-to-end hybrid cloud approach for SAP customers

When you are talking about SAP Business Suite, SAP Business Suite
on SAP HANA, or even SAP BW on SAP HANA, the connection between
on-premise systems and SAP in the cloud becomes a critical concern.
Even SAP BW, which is a not a mission-critical function, still may have
areas of concern with performance if, for example, you have SAP BW on
SAP HANA in the cloud, but it is pulling data from your on-premise SAP
ECC system.
From a technical standpoint, when it comes to hybrid, its never as
easy as it sounds.
Cloud Implementation: Customer Experiences

Figure 4.4 demonstrates the experience of a recent SAP customer. While
it is, admittedly, an optimal experience, the correlation of the timeline
is pretty close (albeit quite generous on the traditional deployment
estimates).
Customer Key User
Service Portal Provisioning new SAP system from template without customer data
(for new production or development systems, for example)
SAP database refresh (homogeneous system copy); regular

Service Catalog update of the test system with production data, for example
CHAPTER 4
Provisioning of an SAP system from template with customer data
Service Request (SAP system clone), for additional test systems or sandbox systems,
Management for example
Service Automation
Management Value delivered: From traditional To cloud
New SAP system 1-2 weeks ~1 day
Service Provisioning SAP database refresh 2-3 days ~0.5 days
SAP system clone 1-2 weeks ~1.5 days
Figure 4.4 Customer benefits of moving SAP to the cloud; further auto-
mation of SAP application services increases service delivery quality and
significantly reduces provisioning times
This customer implemented a new SAP system in the cloud. We esti-

mated that it would take one to two weeks to build the system on prem-
ise, but as anyone who has done an SAP implementation could tell you,
thats probably the best result you can expect. This customer came to the
cloud, in this case IBMs version of the cloud, and it took less than a day to
make a sandbox available to the customer. No RFP, no procurement, no

shipping, no plugging in. The customer just logged onto our self-service
portal and was up and running in less than a day.
Another example (see Figure 4.5) is from an actual SAP project over
thirty-six weeks using a Gantt chart view. The timeline is for an on-prem-
ise project, but it was moved to the cloud and the timeline automatically
constricted by seven weekstwo weeks on the front end, three weeks in
the middle (for testing), and two weeks at the endwhich saved hun-
dreds of thousands of dollars.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36
Prep
Blueprint
Realization (Design/build)
Realization (Build/test)
Realization (Load/test)
Final Prep
Go-Live
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36
11 22 33 44 55 66 77 88 99 10
10 11
11 12
12 13
13 14
14 15
15 16
16 17
17 18
18 19
19 20
20 21
21 22
22 23
23 24
24 25
25 26
26 27
27 28 28 29 29 30 31 32 33 34 35 36
Prep
Blueprint
Realization (Design/build)
Realization (Build/test)
Realization (Load/test)
Final Prep
Go-Live
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
Simple Landscape
Sandbox Development QA/Test Production

Example of a
N APR
ECC ECC ECC ECC APR
SVR APR
SVR APR
SVR APR
SVR
N+1 ECC ECC SVR
CHAPTER 4
Figure 4.5 An example cloud-based SAP implementation project; by moving

an on-premise implementation to the cloud, this organization accelerated its
timeline by seven weeks
Encouraging Implementation Lessons

The speed, agility, and flexibility of cloud rollouts of SAP projects are get-
ting significantly better. Two years ago, a rollout in the cloud would have
taken longer than a similar rollout on premise. Its now less and shrinking.
The moral of this story is: If you are looking to jump into SAP HANA
(and you dont already have a certified appliance sitting in a closet some-
where), why not start the project in the cloud?

CHAPTER 5
Cloud Economics
How can you build a value proposition to drive change with SAP solutions?
Cloud economics is highly analogous to a zero-sum game. With sev-
enty percent of IT budgets spent on maintenance and ongoing operations,
youve likely experienced pressure to cut IT budgets, even in periods of
revenue growth. The reason, of course, is to fund new initiatives to con-
tinue that growth.
Its incumbent on any organization to be relentless about how it will
drive down operational costs.
When it comes to making a business case for the cloud, there are four
levers you can pull to generate your return on investement (ROI):
Standardization. Where can the cloud help you derive savings
from simplifying and streamlining IT operations and minimizing
customization?
Global delivery. What kind of benefits from arbitrage could you
achieve?
ITIL processes. Can you increase your maturity level? Can you
take advantage of IT management processes that can speed the
cycle time and agility with the business?
Economies of scale. All major tech companies are making sub-
CHAPTER 5
stantial investments in the cloudits the new gold rushand

customers can take advantage of that. How can you attain the latest
processing power and obtain the latest technology at the best pos-
sible price by taking advantage of the purchasing power of the large
cloud providers?
By pulling one or more of these levers (and depending on how hard
you pull on them), you create your ROI and realize the economic benefits
from your investment in the cloud.

5 | Cloud Economics
A survey of more than 1,700 IT decision makers1 found that expec-

tations for the cloud were high. When respondents were asked what they
expected from cloud managed services, there were few surprises. The top
answer was the belief that moving to cloud managed services will result in
growing the business and improving business services. In smaller num-
bers, respondents said they expected to see an improvement in the quality
of technology and in availability.
Estimating the ROI: Cost-Benefit Estimator

To better provide estimates of cloud transformation projects, IBM hired
a third party to comb through thousands of SAP customers projects to
develop a cost-benefit estimator (see Figure 5.1).
Figure 5.1 The IBM Cloud Managed Services Benefits Estimator tool
calculates the return you could expect from moving to the cloud
CHAPTER 5
Source: 451 Research, Beyond Infrastructure: Cloud 2.0 Signifies New Opportunities
1
for Cloud Service Providers, 2015 (http://download.microsoft.com/download/3/0/

B/30B07B25-05CA-46B2-BCF6-1DE845383672/MSFT Hosting End-User Full Slide
Set 3.17.15 Complete.pdf).

Cloud Economics | 5
The tool asks customers to outline their current IT environment and

estimate how much of it they wish to move to the cloud. The calculator
then asks a series of questions about their current IT condition that a
move to the cloud could improve, using metrics such as speed to market,
availability, and total cost of ownership.
I encourage anyone to go to https://roianalyst.alinean.com/ibm_bva/
AutoLogin.do?d=616569597576534238 and try the tool on your own.
What follows are examples of three types of companies to demonstrate
how the tool works.
Example #1: Small High-Tech Company

This is a relatively small company, based in Singapore, with a quarter-
billion dollars (SGD) in revenue. Its SAP footprint is relatively small as
well, with some 90 users across the enterprise (see Figure 5.2).
Figure 5.2 In step one, the tool asks for your company profile information
CHAPTER 5

5 | Cloud Economics
The tool asks at the outset what part of its SAP solutions a customer
wants to explore putting on the cloud. There are three options: SAP appli-
cations (managed PaaS), cloud managed services (managed IaaS), and
automated modular management (self-service IaaS). For this example, the
customer selected the first and third options (see Figure 5.3).
Figure 5.3 Customers select which SAP solutions they want to move to the
cloud
The tool then seeks information about the SAP environment and
what, specifically, the customer is looking to migrate to the cloud.
For this example, the customer is looking to move a relatively small
footprint to a managed cloud service: five servers, four SAP environ-
ments, and the equivalent of six full-time equivalents (FTEs). They also
wish to use SAP HANA and want the cloud to host both production and
development environments (see Figure 5.4).
CHAPTER 5

Cloud Economics | 5
Figure 5.4 The tool seeks information about what, specifically, the customer
is looking to move to the cloud
Based on these elements, the tool will calculate an approximate cost

savings. In this case, the move is estimated to generate just over $1.5 mil-
lion (SGD) in annual savings.
The next tab calculates the customers IT maturity and estimates any
additional savings by moving to the cloud. The customer is asked to rate
its performance in three areas: speed, economics, and empowerment. The
ratings are based on a one-to-five scale, with five being the best. Each
rating on the tool contains a description and customers are asked to pick
the one that best describes the maturity of their respective organization
(see Appendix A for a complete description).
This customer rated itself as fairly immature across the board. Under
the speed category, the customer rated its time to market as less than
optimal, a two, which means it takes them more than two months on
average to deploy their SAP workload environment. It also rated its cus-
tomer reach as relatively low, stating its business model is more focused
on partners rather than customers (see Figure 5.5).
CHAPTER 5

5 | Cloud Economics
Figure 5.5 The example high-tech company rated itself relatively low in time
to market and customer reach
When it comes to economics, the company expressed a relative lack of

control over its IT costs and total cost of ownership (TCO), reporting that
its expenses fluctuate as hardware, software, and maintenance change. In
CHAPTER 5
addition, it reported that some sixty percent to eighty percent of its IT

resources are devoted to innovation (see Figure 5.6).

Cloud Economics | 5
Figure 5.6 The example high-tech companys TCO and IT innovation ratings
The one high mark the customer gave itself was for availability of its
SAP system, which was meeting an SLA of 99.9 percent. When it came to
security, however, the organization had written policies and procedures in
place, but beyond that offered a relatively immature security matrix (see
CHAPTER 5
Figure 5.7).

5 | Cloud Economics
Figure 5.7 The example high-tech companys high availability and mid-to-low
security ratings
When taking into consideration the maturity of the organization, the

estimated annual savings fell from $1.5 million to slightly more than a
million dollars, but still represented a significant reduction in cost.
CHAPTER 5

Cloud Economics | 5
Example #2: Mid-Size Manufacturing Company

Our second example is a mid-size manufacturing company in North
America. This company collects US$200 million in revenue annually and
has a slightly larger SAP user base and more customer accounts than the
company in the previous example (see Figure 5.8).

Figure 5.8 Our second example, a mid-size North American manufacturer
It wants to move everything to the cloud (see Figure 5.9).
CHAPTER 5
Figure 5.9 The manufacturer opts to move everything to the cloud

5 | Cloud Economics
The company wants to move eight servers, five SAP environments,

and six FTEs. Based on these metrics, the tool calculates an annual sav-
ings of $1.266 million per year (see Figure 5.10).
Figure 5.10 Based on the manufacturers IT profile, it could see over one-
and-a-quarter million dollars in annual savings from a move to the cloud
The maturity of this organization is a mixed bag. Time to market is

more than three months, but the importance of response to customers
is higher for this organization than in the previous example. Customer
retention is important to this company (see Figure 5.11).
CHAPTER 5

Cloud Economics | 5
Figure 5.11 The manufacturer is slow to get things to market, but has good
customer reach
When it comes to economics, this manufacturing company is less

mature than the company in the previous example. While TCO metrics
are the same, IT innovation is the lowest metric reported (see Figure
CHAPTER 5
5.12).

5 | Cloud Economics
Figure 5.12 The manufacturer rates itself low in IT innovation
With regard to empowerment, response time is also lagging behind

the previous example, at 98.5 percent. Security is the same (see Figure
5.13).
CHAPTER 5

Cloud Economics | 5
Figure 5.13 The sample manufacturers empowerment ratings
Despite this companys metrics being lower than the previous

example, the savings identified remain unchanged (see Figure 5.14).
Again, these calculations are based on averages from thousands of SAP
CHAPTER 5
implementations.

5 | Cloud Economics
Figure 5.14 The resulting estimated annual savings for our example North
American manufacturer
Example #3: Large Retailer

This example is a giant retailer, doing five billion dollars annually in rev-
enue. It has some 2,000 SAP users and 10,000 customer accounts (see
Figure 5.15).
CHAPTER 5
Figure 5.15 Our third example is a giant global retailer looking to move to
SAP HANA

Cloud Economics | 5
This company, like the one in the previous example, wants to explore
putting its entire SAP landscape in the cloud (see Figure 5.16).
Figure 5.16 The retailer wants to move its entire SAP landscape to the cloud
Because of the larger size of this customer, the migration will be much
larger: fifteen servers and a dozen SAP environments, along with the com-
mensurate seventeen FTEs.
Based on these initial metrics, the estimated cost savings per year are
calculated to be over $7.8 million (see Figure 5.17).
CHAPTER 5
Figure 5.17 The retailer expects to see major savings from moving its
formidable SAP landscape to the cloud

5 | Cloud Economics
When it comes to the maturity of its IT systems, this particular exam-

ple is better than most, and certainly more mature than the companies
in the previous two examples. With regard to speed to market, it has a
conversion rate of one-to-two months. Its customer reach is very good;
the retailer reports that once it converts a company, it tends to keep them
(see Figure 5.18).
CHAPTER 5
Figure 5.18 The retailer sports high time to market and customer reach
ratings

Cloud Economics | 5
On the economic side, this company has relatively predictable IT

expenditures and its IT innovation rate is sixty to eighty percent (see
Figure 5.19).
Figure 5.19 The global retailer has predictable IT infrastructure expenses

and moderate IT innovation
CHAPTER 5

5 | Cloud Economics
As for empowerment, availability is high at 99.5 percent and security

is sound (see Figure 5.20).
Figure 5.20 The global retailers high-side empowerment scores
With a relatively mature IT organization, savings are estimated to

CHAPTER 5
remain unchanged.

Cloud Economics | 5
ROI as a Starting Point: Opening the Cloud

Discussion
It should go without saying that the cost-benefit estimator tool is far from
perfect, but it is far superior to calculations on the back of an envelope, as
it is based on thousands of real-world examples. What it will do is provide
a solid opening discussion on the benefits of moving all or part of your
SAP landscape into the cloud.
While the tool is relatively flexible and allows for multiple scenarios,
pinpointing the right cloud strategy for your organizationand under-
standing your workload and resource gapsis still the first critical step to
a successful cloud project.
CHAPTER 5

5 | Cloud Economics
CHAPTER 5

CHAPTER 6
Workload Analysis
Assessing and understanding your workloadand all its interdependen-

ciesis key to any migration, and cloud adoption is no exception. Work-
load analysis is a key step in prioritizing applications in a move to the
cloud, selecting the optimal cloud model, and achieving successful cloud
migration.
Clearing Up the Confusion on Workload

In computing, workload is defined as the aggregate of the requests made
upon a computing system by users and applications.
There still seems to be some confusion around what workload is
in this context. Some customers will say to us, Do you mean Microsoft
Office? Do you mean Oracle? Do you mean SQL server? But what we
tell them is that workload typically describes the requests made by busi-
ness applications that run a set of servers, OSs, and application products
with the business code on top of that.
A business service, therefore, is comprised of the interrelated work-
loads that users rely on to complete a specific task or tasks. If you think
about an internal corporate portal, for example, through which users can
access their HR information or perform some internal collaboration,
there is a common entry point. But under the covers, users are accessing
different business services.
Graphically, that corporate portal would look something like what is
shown in Figure 6.1.
CHAPTER 6

6 | Workload Analysis
Service
Workload 01 Workload 02 Workload 03
SW W SW Q
SW X
Service Server
Server Server Server
Workloads
Software Data
Server Server
Server Server
Servers
SW Z
Server Server
SW Y
Figure 6.1 A client-facing servicesuch as an internal corporate portalcan

include several autonomous workloads with varying characteristics
All of the objects in this graphic together represent the servicein

this case, a portal. Each workload represents a business processemploy-
ees updating their information in the HR system, or an internal collabo-
ration environment, or a corporate news website.
Its important to understand that you will have images that have mul-
tiple business application footprints. From an infrastructure standpoint,
when you are talking about assessing workloads and understanding how
they potentially would move to the cloud, you have to account for all the
business applications that have multiple footprints on the same servers.
Identifying that up front becomes very important.
Workloads Role in Evaluating Cloud Opportunities

Many businesses, especially those in regulated industries, have optimized
and hardened their data centers with traditional IT. There is no more to
be gained because these companies have taken advantage of what they
can with regard to SAP environmentsvirtualization, internal cloud,
CHAPTER 6

Workload Analysis | 6
and all the other efficiencies. The challenge is that while their system is
highly optimized, the expense of addressing expansion or retraction is
completely on them.
Many clients in this position are turning to non-production use of the
cloud as their way to get their toe in the water. Others are looking at SaaS
products, such as SAP SuccessFactors or SAP Ariba, to expand capabili-
ties in the cloud. In this case, the cloud is more than infrastructure, more
than a platform. Its a way to gain expanded capabilities at an affordable
cost. What many SAP customers do is jump into the cloud as a proof of
concept, and these standalone modules are an excellent way to do that.
Another interesting group is companies that have no existing SAP
landscape at all. They are just starting out; they do not have Basis-skilled
or SAP-skilled staff; they own no data centers. Or perhaps they are moving
away from a non-SAP legacy system and are looking for a solution that is
more scalable and cost-effective. For these companies, a managed cloud
is the appropriate alternative. For them, SAP cloud-based solutions are a
commodity that they buy as they need.
Workload Analysis Digs Deeper

When we talk about assessing existing workloads for the cloud, the
analysis typically covers four different dimensions (see Figure 6.2):
Workload characteristic fit analysis. This represents the qualita-
tive characteristics of the application related to the infrastructure.
Quantitative workload fit analysis. This represents a data inven-
tory of the servers to pinpoint OS, CPU, memory, and any other
functional requirements.
Workload assessment analysis. This assessment evaluates your
workload at the application layer along with its underpinnings,
such as the development technologies that they are using. You need
to identify the functions you are using, determine how you will
develop applications, and what your release approach will be.
CHAPTER 6

Workload affinity mapping analysis. Once youve done all of this,

you finish by identifying how all these applications and their com-
mensurate workloads interact with each other. Just like the days of
data center migrations, you cant take one application and move it
to a new environment without understanding the ramifications of
its interactions with other applications. You need a mechanism to
assess and quantify that impact so you can make a fully informed
decision about cloud infrastructure.
Figure 6.2 When assessing existing workloads for the cloud, a workload
point of view must consider four key dimensions
Lets examine each of these steps in greater detail.
1. Workload Characteristic Fit Analysis

When considering a cloud or hybrid infrastructure, you need to ask the
business application or workload a series of characteristic-based questions:
What are the scalability requirements for the workload?
How large is the benefit of rapid application deployment for this
workload?
CHAPTER 6

Is the workload available as an application or SaaS on the cloud?

How standardized is the underlying IT infrastructure?
How differentiated is the workload and, by extension, is it a source
of competitive advantage?
Answers to these questions will guide you to the cloud deployment
model that best suits your needs.
2. Quantitative Workload Fit Analysis

This level of analysis involves digging into your environment and
performing data discovery.
TIP: At first blush, conducting a data inventory can be a

daunting task. Your organization may not be strong when
it comes to configuration management. But this is a useful
exercise for any enterprise (and far less costly and time-
consuming than, for example, asking an outside vendor to do
it for you). Once you have a survey of your data environment,
it is easily updated for the next migration to the cloud or new
data center or any of a multitude of projects.
Its important to understand that this involves far more than com-
piling a list of your servers, OS types, CPU, memory, and applications.
From too basic an inventory, you simply wont be able to generate much
of an analysis. Certainly, any consultant you hire or cloud provider you
contract with will be unlikely to extrapolate a satisfactory model for cloud
deployment.
But the more information you can provideincluding performance
metrics, security requirements, and SLA metrics for the applicationsthe
better the analysis and the more dimensions can be checked and tested.
The goal is to understand from an infrastructure standpoint how the
applications running on this infrastructure would map to what is offered
via potential cloud providers. The greater the granularity, the better the
recommendation as to whether the business service will fit or not (a true
yes-or-no proposition). If it does fit, how much will it cost to migrate it?
CHAPTER 6
What will be the level of difficulty to do so?

Probably the most useful pieces of information that you can provide
are performance metrics. With those, your cloud provider can identify
many areas for cost savings. For example, say you have a business applica-
tion that runs on ten serversfive Linux and five Windows. But based on
the performance metrics, we find the servers respective CPUs are barely
breaking a sweat. You might find that your cloud provider only needs to
provision half the number of servers in the cloud footprint, but with the
capability to expand as needed.
3. Workload Assessment Analysis

Figure 6.3 highlights the application underpinnings of a business service.
When you map your own systems, investigate how you are using develop-
ment technologies and related functions. Are there redundancies that can
be consolidated? Can you rebuild some of the functionality on another,
more efficient platform? The question that has to be asked is: Would it be
more advantageous to redeploy this technology on the cloud, or would
there be greater benefit to rebuild them on the cloud?
Application landscape information
innovated portfolio
Cleanse/optimize (Remove redundant functions and rationalize)

Optimized and
Innovate
(Demand-driven elasticity, new cloud-native applications, and API enablement)
Establish hybrid integration environment
Enterprise converged reference architecture and target operating model
Figure 6.3 Use a workload point of view to build and manage an optimized
and innovative portfolio with evolving hybrid IT architecture
CHAPTER 6

Once this study is completed, the results need to be combined with

your analysis of your infrastructure to determine the best path to the
web. For example, some applications may be an easy fit to port onto your
potential web partners based on your infrastructure review. However,
when looking at the application layer, it may be more advantageous for
the business to spend the money and time to rewrite the software in a
cloud-native development technology.
Doing the study from an infrastructure and an application develop-
ment perspective provides the full spectrum to make the appropriate deci-
sion for your needs.
4. Workload Affinity Mapping Analysis

Right before the act of building a migration plan to the cloud, you will
need to build a map of workload integration points (see Figure 6.4). Of
the workloads that you have assessed, do any have any critical integrations
where, once moved to the cloud, they will create a major performance
issue?
CHAPTER 6

Contains web servers,

application servers,
load balancers, database
Composite
Applications
Typically rely on ESB/EAI/Messaging

dedicated infrastructure
and application servers
Shared Business
Services
Object Services
Backend Data Document

Applications CRM ERP
Warehouse Management
Contains web servers,

application servers,
load balancers, database
Figure 6.4 Dont forget to consider workload integration points
The key fact to remember is that not all applications are cloud-
worthy. We occasionally have clients who want to move their entire
on-premise infrastructure to off-premise; we have found that, while the
cloud is mature, its not there yet. Most importantly, sometimes theres
very little benefit to be gained by moving a workload to the cloud. Under-
standing what makes a workload cloud ready is really important.
Bill Clerico, a cloud advisor at IBM, likes to use a vivid metaphor to
describe cloud adoptiona bowl of spaghetti and meatballs:
If you consider an application portfolio as a large bowl of

spaghetti and meatballs, it becomes obvious that the applica-
tions that are easily relocatable are the meatballs. They are well-
defined, they stand on their own, they are easy to access, and you
can get ahold of them easily. And because of that, you can easily
relocate them or move them around to a different bowl of pasta
or even put them in a sandwich.
CHAPTER 6

The spaghetti in the bowl, thats a whole different story. With

some work and careful oversight, that spaghetti can be moved.
But Im going to tell you its going to be messy and it will proba-
bly never make for a good sandwich.
Workloads that have meatball characteristics are good cloud

candidates because even in the worst-case scenario, they can
easily be moved back to their original location.
Finding those applications that are good candidates for cloud adop-
tionseparating the meatballs from the spaghettiis the key step
here.
At IBM, we developed a methodology that has been reliable at identi-
fying these critical integration points for moving business services to the
cloud. Coincidentally, this technique originated with SAP customers who
were moving large data centers. A customer could not move everything
at once. Servers had to be migrated in stages in a phased approach. How-
ever, because of the interconnections you expect with SAP ERP, you had
to identify what server groups had to be moved together in order not to
break any mission-critical business process.
Pinpointing High-Priority Applications for the

Cloud
IBM developed the following exercise, which now has been modified for
moving customers onto our cloud platform: Once you have a workload
that is ready to move to the cloud, we meet with the business and portfolio
leaders of the applications and discuss, using a ranking perspective, how
important these applications are to the business.
What we find in this step is that, when you ask that seemingly general
question to any group, all will say that the software they useor that their
business unit usesis the most important. But in this exercise, we want
to strategically determine, from a revenue generation standpoint, how
important each application is.
CHAPTER 6

Can We Do Without It?

For example, within an airline website, there may be multiple services.
But not all are directly tied to revenue. One feature may allow a user to
purchase an airline ticket, which will be a revenue-generating transaction.
Any issue that disrupts that functionality will lead directly to lost revenue.
Another feature may allow users to input their frequent flyer number.
While tied to revenue, that may be a process that will allow for batch pro-
cessing and can be completed offline.
Once we get some firm financial metrics behind the applications
under consideration for a move to the cloud, we can determine a ranking,
and from there sit down with each individual applications owners and
support teams and developers. Well take this opportunity to understand
all the individual transactions of those applications. And well work out,
step by step, how they flow through the infrastructure.
In the airline example, the ticket purchase process will require a cer-
tain number of obvious compute resources that can be hosted on the cloud.
But on closer look, we may find that it also speaks with an on-premise
database from another application. This will require a decision to deter-
mine how critical that transaction is to the ticket-buying process. Should
it be moved to the cloud? If not, can we do without it?
Troubleshooting for Transaction Speed

In our methodology, we will create a non-production environment and
have a test user simulate that transaction. We capture all the network traf-
fic on all the server components, and the pull that together by timestamp
so we can generate a report of one transaction. We then will eliminate all
the extraneous activities on the server during the transaction. This will
give us an isolated, network capture of a single transaction as it flows from
server to server, millisecond by millisecond.
Well put that transaction capture into a modeling tool that enables
us to insert simulated latency at critical integration points between the
application on the cloud and any on-premise components.
So if a transaction in the current state took two and a half seconds and
in the modified projected state the transaction now took eight and a half
seconds, we then go back to the business to determine if the longer time is
within the parameters required to protect that revenue.
CHAPTER 6

One of the side benefits of this exercise is that we will find integration
points that the customer was not aware existed. Weve found business ser-
vices that, unbeknownst to the customer, were talking to non-production
databases or even making calls out to the cloud.
This brings us to one of the many side benefits of this cloud workload
process: cloud discovery.
Cloud Discovery
What you may or may not know is that your business is already in the
cloud. We always find that our customers individual business units or
employees have appropriated cloud services, usually one-off solutions,
and incorporated them into their workflows.
It could be anything from cloud storage, where they are keeping doc-
uments, to using cloud for disaster recovery. On average, a company is
using more than 800 different cloud-based services and most of those are
outside the control and knowledge of IT. Typically, the decision to use the
cloud has bypassed IT and its rigorous controls.
When companies are looking to make a jump to the cloud, it is an
ideal opportunity to identify where you currently are in the cloud and,
more importantly, where your business might be at risk because of the
lack of oversight or consistent controls.
IBM, for example, has a partner that will go into a company and exam-
ine the perimeter and other server logs from any corporate data center out
to the internet. From that data, it will produce a detailed report that can
identify, down to the user level, interactions with the cloud. Not only will
it tell you if a single user is storing documents in the cloud, it will tell you
how often the user stores a document, how large the document is, and
what the source of that document is.
At the end of the discovery exercise, this partner will identify the var-
ious cloud interactions within your company and provide ratings of all
the cloud services that are being consumed. These ratings include risk,
legality, and authentication services required.
It should go without saying that unauthorized consumption of cloud
services can put your business at risk. Forewarned is forearmed. Deter-
mining what cloud services your users and businesses are currently con-
suming can lend insight into which services you should be providing
CHAPTER 6
going forward.

CHAPTER 6

CHAPTER 7
CHAPTER 7
SAP HANA in the Cloud
SAP HANA Cloud Platform is an in-memory platform-as-a-service

(PaaS) offering upon which SAP applications can be built, extended, and
run. It brings the in-memory power of SAP HANA onto a dynamic cloud
platform that is designed to accommodate an increasingly mobile, social,
and networked world. Of greater critical importance, all of it runs on a
unified and integrated cloud environment to drive the high performance,
availability, and security that SAP customers expect and demand.
Because this is a platform, it is designed to be flexible (SAP and its
partners offer a variety of subscription modelsand SAP even lets you try
it for free 1) and supports a growing library of services in the form of apps.
SAP HANA Cloud Platform offers the possibility of the nearly real-time
performance that the on-premise solution gives you, but also enables you
to extend it beyond your firewall.
In addition, the platform is designed with a growing number of fea-
tures so that you can rapidly deploy cloud-based applications that integrate
your SAP infrastructure or non-SAP infrastructure. Most importantly,
this is a platform where semi-structured data from mobile apps or the
Internet of Things (IoT) can be collected, stored, and analyzed along with
the data within the databases in your SAP portfolio.
With some very specific exceptions (mainly with an in-memory
approach), the platform enables you to:
Rapidly build and deploy cloud applications
Extend and integrate your SAP and non-SAP business processes
into the cloud
To test-drive SAP HANA, visit https://hcp.sap.com/developers/TutorialCatalog/

1
nat100_01_native_hana_getting_hana_trial.html for a tutorial on how to get your

own SAP HANA trial instance on SAP HANA Cloud Platform.

7 | SAP HANA in the Cloud
CHAPTER 7
Analyze, in real-time, data collected from cloud apps and from

on-premise SAP solutions
Build new, mobile-ready applications to extend SAP solutions onto
the cloud and, in turn, to employees and customers
The promise behind SAP HANA Cloud Platform is not simply one
of increased and powerful performance. It also means that the cloud can
become home for applications to engage customers, for transactional sys-
tems to take orders and collect revenue, and for advanced data collection
and analytics.
One of the opportunities here is to run your SAP HANA system in the
cloud, not on premise. The benefits? No capital expense of building data
centers, and no labor expense for dedicated staff to manage and main-
tain the system. You should not have to manage patches and upgrades;
SAP or your cloud partner will typically do that. This solution is designed
to let customers jump into the cloud quickly, often more quickly than it
can take to build their own SAP infrastructure, while reducing costs and,
more importantly, reducing risk.
Two Flavors of SAP HANA

While SAP HANA has marked a quantum leap in performance and
approach for SAP, this innovation has continued with SAP S/4HANA.
Some have described SAP S/4HANA as SAP Business Suite on steroids,
but, in fact, its more than that: Its a complete rewrite of the software layer
to take advantage of SAP HANA.
For example, anyone who has seen the demo for SAP S/4HANA
Finance has come away more than a little in awe. Traditionally, any large
corporation can take three to five weeks to close the books each quarter.
With SAP S/4HANA Finance, SAP has developed a product that, at least
in the demo, can perform a financial close with the press of a button. SAP
S/4HANA brings the speed of SAP HANA to the business solution suite.
To better understand and truly appreciate SAP S/4HANA, though,
lets first look under the covers of SAP HANA as a platform.

SAP HANA in the Cloud | 7
CHAPTER 7
Breaking Down the Pieces
The SAP HANA platform now provides distinct services at the applica-
tion, database, and infrastructure levels.
SAP HANA AppServices is the infrastructure to create consumer-
grade, customer-facing applications and extend cloud and on-premise
applications. Features in the platform enable real-time, secure applica-
tions. SAP HANA AppServices includes support for integration, analyt-
ics, mobile, portals, and collaboration. It builds on the capabilities of SAP
HANA DBServices in configurations ranging from sixty-four gigabytes to
one terabyte. It also includes shared services for application management,
systems management, administration, and monitoring.
SAP HANA AppServices is SAP certified, and certified in general,
to meet the latest industry cloud standards for building, deploying, and
managing mission-critical, cloud-based enterprise business applications.
It also has native connectivity to back-end enterprise business content,
including content from SAP and third-party solutions, whether running
in the cloud or on premise.
One of the biggest benefits is that it leverages the real-time, in-
memory computing technology and embedded analytics of the SAP
HANA database.
SAP HANA DBServices comes in subscription-based configurations
from 128 gigabytes to one terabyte. It delivers provisioning of SAP HANA
and hardware, and includes a cloud management console interface for
configuration and administration. It allows customers to build real-time
analytics applications using the development capabilities of SAP HANA.
SAP HANA DBServices is appropriate for:
Analytical and transactional use cases
Innovative big data, text, and predictive use cases
Data exploration use cases
Security
NOTE: SAP HANA DBServices is not suitable for SAP BW

or SAP Business Suite. Those solutions are better suited to
SAP HANA Enterprise Cloud.

CHAPTER 7
SAP HANA DBServices provides a secure environment in which each

customer is assigned a virtual local area network (VLAN). Multiple ser-
vices under the same account are assigned to the same VLAN, requiring a
single user ID/password combination for the services under that account.
Data stored in SAP HANA is protected via regular SAP HANA secu-
rity capabilities (authentication and authorization). All data transfers in
and out of the SAP HANA database can be encrypted, if appropriate. The
customer is responsible for encrypting and decrypting the data. Hence,
only the customer has access to un-encrypted data.
SAP HANA Infrastructure Services enables customers to deploy and
manage pre-licensed SAP HANA instances on the cloud, avoiding capital
hardware investments and setup time. Available in configurations ranging
from 128 gigabytes to one terabyte, SAPs infrastructure subscription is
designed as a scalable, affordable way to deploy SAP HANA licenses in the
cloud. Also included is the SAP Data Services component of SAP HANA
Cloud Integration, which provides integration with SAP on-premise and
third-party applications.
SAP HANA Infrastructure Services supports the provisioning of the SAP
HANA platform, as well as SAP HANA Cloud Integration for data services, a
cloud-based tool to extract, transform, and load data from SAP Business Suite
and other sources, such as third-party databases, into SAP HANA.
SAP HANA Infrastructure Services is appropriate for:
Analytical and transactional use cases
Innovative big data, text, and predictive use cases
Data exploration use cases
Like SAP HANA DBServices, SAP HANA Infrastructure Services
is not suitable for SAP BW or SAP Business Suite. Here, SAP HANA
Enterprise Cloud is the better choice.
While one terabyte of memory is the largest configuration available
for SAP HANA Infrastructure Services, cloud partners such as IBM pro-
vide similar services for larger data volumes. With these larger systems,
there are three alternatives to SAP HANA Infrastructure Services:
Build or use your own data center to host your cloud.
Use SAPs cloud, called SAP HANA Enterprise Cloud. SAP, as well
as partners such as IBM, operate numerous data centers in the US.
Use one of the SAP HANA cloud providers certified by SAP (see
sidebar).
CHAPTER 7
SAP Certification for Cloud Providers
Cloud providers, as with anyone else who partners with SAP, must
be SAP certified. SAP customers expect it. Getting certified by
SAP is akin to getting approval from the US Food and Drug Admin-
istration (FDA). If its not SAP certified, would you ever use it?
When it comes to certification for cloud providers, here are
some of the raw criteria:
You have to be global, not only because of networking,
transmission, and latency, but also because many countries,
notably Germany and Switzerland, require that any data
generated in that country must remain in that country.
You have to be able to serve as a platform for other
applications. Many SAP customers are also customers of
other enterprise software vendors.
You have to have SAP HANA skills, expertise, and experience.
SAP HANA On-Premise Versus CloudHow Do

You Decide?
When you want to compare an on-premise solution to a cloud solution,
the challenge is ensuring that youre comparing apples to apples. You need
to look at how the solution will be configured when it resides locally, and
how it will be configured on the cloud.
When it comes to SAP HANA on premise versus in the cloud, we
need to start with the appliance: an optimized server preloaded with SAP
software components. The SAP HANA appliance is certified and comes in
t-shirt sizes that allow you to scale up by adding memory or scale out by
adding services, as Ill discuss below.
In the partner environment, a cloud provider can offer the full-blown,
preconfigured SAP HANA solution. Because of recent developments at
SAP, the cloud provider now also has the option to split off some key
pieces of SAP HANA that speak directly to scalability but, within certain
restrictions, still operate with SAP HANA.
With this offeringSAP HANA tailored data center integration, or
TDISAP disengaged storage from the appliance. With an in-memory
database system, you still need persistent storage, but partners can pro-
vide the network and the storage (see Figure 7.1).
CHAPTER 7
Fast implementation More flexibility

Support fully provided by SAP Leverage existing IT investment
Application Virtualization
Database
SAP
SAP HANA
Operation
HANA System Server Server
Server
Virtualization
Server Network
Network Shared Network

Storage
Storage Storage Storage
Appliance delivery approach SAP HANA tailored data center integration

Solution validation done by SAP and partner Installation needs to be done by customer
Preconfigured hardware set-up Customer aligns with the hardware partner on
Preinstalled software individual support mode
Figure 7.1 An appliance delivery approach versus SAP HANA tailored data
center integration
An Introduction to TDI
With the SAP HANA tailored data center integration approach, SAP part-
ners now are no longer beholden to a self-contained appliance. But there
are restrictions and requirements. First and foremost, the installation has
to be SAP certified. Before it is put into production, SAP requires that the
installation be tested with the SAP HANA hardware configuration check
tool, a script that tests the system and then sends the test results to SAP
for verification.
Sizing and Cloud Pricing

The pricing of SAP HANA is based on t-shirt sizes, and this also extends
to the cloud. As a result, SAP HANA does not have a typical cloud utility-
based pricing structure. Rather than base pricing on consumption, as
with other cloud services, all pricing is based on what size SAP HANA
t-shirt you require (see Figure 7.2).

CHAPTER 7
T-Shirt Sizes Available for All Consumption Models
XS S M L XL XXL 3XL
128GB 256GB 512GB 1TB 2TB 4TB 6TB
Figure 7.2 SAP HANA pricing is based on t-shirt sizes
In constructing your own cost-benefit analysis, this becomes a critical

concern, especially for those requiring the larger t-shirt sizes. For exam-
ple, for SAP customers requiring a system of one terabyte, the price will
reflect that. But for systems of one-and-a-half terabytes, the customer will
be required to move to the two terabyte level, even though the half tera-
byte of capacity they will not be using is a considerable amount of data.
Often, this also may mean that any additional services required as part
of the SAP HANA implementation will also be priced proportionately to
those t-shirt sizes.
At some point in the future, the pricing of SAP HANA could be based
on consumption. For now, though, regardless of whether you are building
on premise or staging SAP HANA in the cloud, its all about the t-shirt size.
NOTE: IBM Power servers do not need to adhere to the

t-shirt sizing guidelines noted in Figure 7.2 and, therefore,
can be more flexible.
Getting the Sizing Right

Sizing has never been a science. Because SAP HANA is an in-memory
system, youre going to have to size especially carefully (and be ready to
scale up).
SAP has a plethora of sizing tools for estimating how large your SAP
HANA system will need to be. The SAP BW sizing tool in SAP Solution
Manager will evaluate your entire database, table sizes, and all other
relevant factors. It will tell you almost exactly what size database you

CHAPTER 7
will require for SAP HANA. The tool has a well-deserved reputation for
accuracy.
While the tools for SAP HANA sizing are mature, SAP S/4HANA
sizing is still relatively new. However, many cloud providers, such as IBM,
offer excellent sizing tools. Be aware that cloud providers will tend to be
conservative. IBMs tool, for example, is based on a history of more than
30,000 sizings and counting.
One of the benefits of locating SAP HANA in the cloud is that there
is far more tolerance for errors in sizing. When sizing an SAP HANA
system on premise, the general rule of thumb is to build a system that is
more than 100 percent larger than what your sizing estimate indicates.
In other words, you are sized for a fifty to sixty percent utilization. That
leaves another forty to fifty percent that you will not be using until, theo-
retically, sometime in the future. The reasoning behind such conservative
calculations is that the expense of adding to the physical infrastructure
can be considerable.
When sizing for the cloud, there is no need for conservative sizing
estimates because you are talking the difference between thousands of
dollars per month in expanded usage costs versus hundreds of thousands
of dollars in capital costs to expand an on-premise solution. Im aware of
at least one company that estimated its SAP HANA implementation at
512 gigabytes, and when it was launched, discovered it actually required a
one-terabyte system. For all intents and purposes, it had to scrap the orig-
inal infrastructure and start over. Had the company been building SAP
HANA in the cloud, the cost impact for that mistake would have been
only a fraction of what it actually ended up spending.
TIP: A ballpark ratio of the sizing of a database into SAP

HANA is five to oneand for SAP S/4HANA, ten to one.
Aten-terabyte Oracle database, for example, would translate
into a two-terabyte SAP HANA system or a one-terabyte
SAP S/4HANA system. These are back-of-the-napkin
approximations, but they are close enough for rough
calculations.

CHAPTER 7
Will It Fit?
Check with your cloud providers about scalability. While all can accom-
modate a six-gigabyte sandbox, not all can handle a six-terabyte pro-
duction SAP BW system. If you are doing a six-terabyte SAP Business
Suite on SAP HANA, for example, you most likely will be building an on-
premise solution. But, you always need to check with SAP about the max-
imum ceiling on production database sizes in the cloud. The ceiling is
always being raised, so you constantly need to check.
Smaller systemscertainly a one terabyte SAP HANA production
database or smaller, for examplewill fit into the cloud easily. But when
sizing SAP Business Suite, be conservative. Always scale up. Always think
about the decisions you make with production as the end state in mind.
Always think about the decisions you make with production as

the end state in mind.
Too Mission-Critical for the Cloud?

There is natural nervousness about moving SAP systems to the cloud.
SAP ERP is my bread and butter, you might say. I cant afford the risk
of having it off premise.
Part of your due diligence in determining if the cloud is the right
place to put SAP HANA is determining if your cloud partner can back up
claims in their service-level agreements (SLAs) covering availability (pro-
duction and non-production), performance, service delivery response
and resolution times, disaster recovery, and high availability.
Fortunately, most SAP customers have a path to the cloud that can
enable them to try it out with relatively little risk and little penalty should
it go wrong. Let me explain.
Some seventy percent of SAP customers have SAP BW, and a third of
those currently hold licenses (not necessarily implementations) of SAP
BW on SAP HANA. Many customers have found that their trajectory to
the cloud begins with SAP BW on SAP HANA, primarily because you are
not talking about a mission-critical or business-critical system.

CHAPTER 7
Migrating SAP BW to SAP BW powered by SAP HANA in the cloud

is a relatively inexpensive way to introduce your organization to the cloud
platform. And, as more than one organization has learned, the risk is
relatively low, especially when considering business events that cannot
be planned for. For example, you could be halfway through your imple-
mentation, and then your corporation is sold. If you were in the midst of
building a data center, those capital costs will not be going away.
A Few Words on High Availability

A frequent requirement for mission-critical systems is high availability.
Certainly one of the perceived advantages of keeping SAP ERP on-premise
is your control over that availability. But from a cost standpoint, you may
be better served looking at cloud partners.
The approaches to high availability in the cloud are similar to those
on-premise. You have two real options where the fulcrum divides on
performance versus cost. That is, solutions for high availability are either
optimized for highest performance or for highest value regarding cost.
When considering the highest performance, the recommended
approach is to have a hot standby system that is populated with an
in-memory database and data via SAP HANA replication (see Figure
7.3). The secondary system becomes a shadow instance as it is updated
within minutes of changes to the primary system. Should the primary fail
or go offline, the second turns on automatically with SAP HANA studio.
Note that even though SAP HANA is an in-memory database system,
you still need to have two layers (a log and data) of storage persistence,
either using flash or SSD memory.

CHAPTER 7
Clients Application Servers
Data Center 1 SAP HANA system replication

offers another alternative for
Cluster Manager (virt. IPs) local high availability
Database organizes the replication
Primary Secondary process
(active) (active, data pre-loaded)
Keeps a secondary (shadow) instance
updated according to changes
Name Server Name Server
happening in primary
Two options possible
HA Solution Partner
HA Solution Partner
Transfer by
Index Server Index Server
Performance-optimized option
Secondary system completely used for
SAP HANA
database the preparation of a possible take-over
Internal kernel Internal Resources are used for data pre-load on
Disks Disks secondary
Takeovers and performance ramp are
Data Log Data Log optimized
Disks Disks Disks Disks
Figure 7.3 SAP HANA high availability: Performance-optimized system

replication
While performance is seamless, you are maintaining a secondary

system that is only there to back up the primary system. Otherwise, it is
fallow.
The alternative, and certainly the one I would recommend, is a
cost-optimized approach that doesnt require doubling the system. Here,
the back-up is not being used except to shadow the primary system (see
Figure 7.4).

CHAPTER 7
Clients Application Servers
Data Center 1 SAP HANA system replication

offers another alternative for
Cluster Manager (virt. IPs) local high availability
Cost-optimized option
Primary Secondary Allows operating non-production systems
(active) \
PRD on secondary
shadow Secondary HW reused for non-production
Name Server Name Server
operation Resources freed (no data pre-load)
to be offered to one or more
HA Solution Partner
HA Solution Partner
Transfer by
QA/DEV non-production installations
Index Server Index Server
running During take-over the non-production
operation has to be ended
SAP HANA
Takeovers performance similar to a cold
database Internal Disks
Internal kernel start-up of SAP HANA
Disks Data Data
Disks Disks
Data Log PRD
Log Log
Disks Disks Disks QA/DEV
Disks
Figure 7.4 SAP HANA high availability: Cost-optimized system replication

(the recommended option)
Security and the Cloud

Considering that many SAP systems are mission-critical, security becomes
paramount when putting something in a cloud, regardless of whether that
cloud is private, privately managed, or external. SAP, from the beginning,
has been well known for its attention to security, and in that respect, its
cloud solutions appear to have maintained that discipline.
SAP HANA Cloud Platform, for example, contains SAPs own search
over encrypted data (a framework known as SEEED), which protects sen-
sitive data by encrypting it so that it can be processed by an outsourced
service in the cloud without any trust assumptions on the cloud provider
or service consumers.

CHAPTER 7
SAPs cloud portfolio, including that of its certified partners, promises
robust security controls at every level, including:
Data security and privacy. SAP adheres to the European General
Data Protection Regulation across all its software and systems,
regardless of where they are located. If a country has stricter laws
or regulations regarding data security and privacy, SAP meets or
exceeds those requirements in that locale.
Security and compliance enforcement. SAPs products contain
telemetry that tracks security and compliance from the time a
product is developed until it is in production. That same telemetry
warns customers when requirements are deviated from, as well as
automates triggers to respond.
Physical security at SAP data centers. Every SAP data center, as
well as those of its partners, is located in secure, environmentally
controlled facilities with integrated security management. All SAP
data centers comply with the latest telecommunications industry
standards, such as ANSI/TIA/EIA-942 Tier III or higher.
Data storage and location. In the cloud, data sources can be
diverse. Segregating data, as well as continually sourcing it, becomes
paramount, especially in light of privacy and security laws. SAP
contains controls that meet regulatory requirements for identifying
data. SAP cloud products support logical isolation of data within a
solution that extends to the virtual server layer.
SAP has a reputation for controlling user access to data and other
information based on well-defined rules that are configurable based on a
customers security requirements. The cloud is no different. SAPs least
privilege approach extends into its cloud portfolio to limit any given
users access to the minimum required to perform a set function. These
security measures apply across the board, across all layers and assets, and
enable SAP to meet strict regulatory requirements, such as ISO 27001,
ISAE 3402, and SSAE 16.
At the same time, SAPs cloud portfolio contains tools to prevent,
identify, and track any potential exploitation of technical vulnerabilities.
These protocols are constantly reviewed by SAP and its partners with pen-
etration tests conducted many times over the course of a year.

CHAPTER 7
Migration Versus New Instance

If you are looking to move your on-premise SAP HANA deployment to
the cloud, you absolutely must employ a tried-and-true methodology that
works specifically for the on-premise-to-cloud process. Your software
development methodology will not be effective here. Also, it is critical to
recruit a partner who has done this before.
The methodology we use, for example, looks something like this (see
Figure 7.5):
Deployment
Launch Model Build Transition
phases
Establish Infrastructure Provision shared Post-live
project team requirements and infrastructure technical support
Establish project design network, Build and test System stabilization
governance storage, backups, infrastructure and monitoring
Develop project monitoring Build and migrate Operations process
plans Application and databases, training
Key events Review scope business process applications Transition to IBM
and transition discovery Phase cutover operations
architecture, development, quality
Define priorities
interfaces assurance (QA),
Define roles and Operational run
responsibilities stage production
books
Migration strategy
Figure 7.5 IBMs standard process to support the transition and transforma-
tion of SAP environments and operation to the cloud
If you are upgrading to SAP HANA, the process obviously is more

complicated (see Figure 7.6). For example, if are going to move your
on-premise SAP BW solution to SAP BW powered by SAP HANA in the
cloud, its typically a two-step migration. You have to perform the SAP
BW upgrade followed by the SAP HANA upgrade. SAP has an automated
tool, the Database Migration Option (DMO) of the Software Update
Manager (SUM), that makes that two-step process easy.

CHAPTER 7
Evaluation Preparation Blueprint Realization Final Preparation Go-Live Sustain
Migration of 3.x Unicode conversion Performance Hyper-care

Initial system data flows to 7.x SAP HANA DB Sustain service
assessment sizing testing support
data flows Dual stack split
Migration to Technical
Value realization Upgrade and
analysis requirements End-user training
through PoC authorization planning migration of SEM
objects
Administration
Deriving SAP SAP BW cleansing Environment Admin Cockpit and monitoring
HANA roadmap and housekeeping setup implementation workshop
and enhancement
System Workshop with
preparation and SAP BW object
key stakeholders optimization
access setup on testing
strategy, SAP Conversion of
Upgrade of other HANA adoption LSA to LSA++
SAP/non-SAP architecture
components due
to the upgrade of Test data and test
SAP BW to case preparation
7.3/7.31 Legend
Regression testing Value Pack Services (part of
SAP HANA conversion services)
Functional testing
Other IBM Services in
Report migration SAP HANA
Figure 7.6 An effective migration plan allows customers to exploit new

SAPHANA capabilities
Migrating SAP S/4HANA

Migrating SAP S/4HANA is trickier and there are only a handful of
integrators and cloud providers who have considerable experience. Before
making the commitment to moving your SAP S/4HANA system to the
cloud, you must make a special effort to check the following:
Complexity of the upgrade
Source system version
OS and DB upgrade requirement
Level of customization
Unicode migration requirement
Regression testing requirement
Size of the database
Migration to SAP Business Suite powered by SAP HANA
Migration to SAP S/4HANA Finance data structure
Database-specific features turned on
Business downtime window
Distribution vs. industrial
Number of connected apps and interfaces
Number of trial cutovers to optimize the downtime

CHAPTER 7

CHAPTER 8
SAP Applications in the

Cloud
CHAPTER 8
This chapter, compiled by the insiderBOOKS team, provides a high-level
summary of SAPs cloud application portfolio. That portfolio, of course, is
always changing, so we encourage readers to visit www.insider-books.com
for the most up-to-date information.
SAPs cloud applications are a mixture of SAP ERP solutions extended or

converted for the cloud (SAP S/4HANA Finance, for example) and several
native-born solutions on the cloud, the result primarily of acquisitions
(including SAP SuccessFactors, SAP Hybris, and SAP Ariba). Figure 8.1
provides an overview of the portfolio.
SAP Cloud Portfolio

Innovation and AgilityDelivered in a unified approach
People Omnichannel Commerce and Customer Engagement Procurement Finance
Human Marketing Sales Service Procurement Supply Chain CFO Office

Resources SAP Cloud SAP Cloud for Sales SAP Cloud SAP Cloud for
Management SAP S/4HANA
SAP SuccessFactors for Marketing for Service Travel and Expense SAP Sales and Finance
SAP Social Media Operations Planning
SAP Business
Analytics by Netbase on SAP HANA
ByDesign
Public Collaboration SAP Jam, Business Network

SAP Fiori (User Experience) and SAP HANA Cloud Platform (Application Development, Integration and Analysis, Foundation)
Managed Analytics SAP BusinessObjects BI, SAP EPM, SAP BW powered by SAP HANA
SCM, PLM, and SAP S/4HANA
Omnichannel SAP CRM on Manufacturing Finance
Commerce SAP HANA
SAP Business Suite
SAP Business Suite
(for Industries) on SAP HANA
SAP Hybris on SAP HANA
(Financials, GRC)
(SD, MM, PP & PLM)
Figure 8.1 An overview of SAPs cloud application portfolio

8 | SAP Applications in the Cloud
As is the case for any large company that has grown by acquisition,
there is a lot of overlap among services. Getting clear information about
what division is responsible for what solution can prove challenging. This
chapter attempts to make sense of it, but do check for updates to this book
on the various solutions.
Many of the solutions are built on SAP HANA Cloud Platform. Some
CHAPTER 8
have been built independently but take advantage of SAP HANA for its
in-memory processing capabilities. All solutions can be hosted by SAP or
by an SAP partner.
The key point behind the following subsections is that SAPs presence
in the cloud is evolvingand evolving quickly. While every effort has
been made to be as up to date as possible, what follows is a demarcation
line of where SAP is now and where it will go in the future. It contains a
healthy dose of speculation, but in those areas we have indicated what is
what. Note that, for much of this, SAPs cloud strategy is in many respects
like clouds in the sky, buffeted by the winds of its competitors, its custom-
ers, and the technology behind the cloud.
What is becoming clear is that SAP HANA is the engine behind many
of the cloud innovations at SAP, as the previous chapter discussed at
length. But how SAPs modules will utilize SAP HANA in the cloud, and
in what form, continues to change.
One of the strengths of SAP is that whatever product you purchase,
either for the cloud or to move to the cloud, there will be a development
strategy and path so that your investment will not be wasted. And with
that, here we go.
Financials
SAP has several versions of cloud-based financials, some of which have
been around for a while (see the SAP Business ByDesign section later in
this chapter). But for now, the solution that is being hyped for the cloud is
SAP S/4HANA Finance.
The on-premise version of SAP S/4HANA Finance has all the features
of SAPs past financials offerings, but boosted by the in-memory capabili-
ties of SAP HANA. It combines all of SAP ERP Financials with SAP solu-
tions for governance, risk, and compliance (GRC), along with the analytic
capabilities of SAP BusinessObjects solutions.

SAP Applications in the Cloud | 8
As you can see from Figure 8.2, SAP S/4HANA Finance has all the
capabilities of SAP ERP Financials and then some.
Enterprise risk
Financial planning Accounting and Treasury and financial Collaborative financial and compliance
and analysis financial close risk management operation management
Develop and translate Payments and bank Enterprise risk
strategy Accounting communications Receivables management management
CHAPTER 8
Planning, budgeting, Cash and liquidity Collaborative Controls and compliance
and forecasting Entity close management invoice to pay management
Profitability and cost Debt and investment

management Corporate close management Travel management Access governance
Financial risk International trade

Monitoring and reporting Reporting and disclosure management Real estate management management
Financial close Commodity risk

governance management Financial shared services Fraud management
Audit management
Figure 8.2 The capabilities of SAP S/4HANA Finance
The game-changer with SAP S/4HANA Finance is that it is as robust

on-premise as it is in a managed cloud (note the key word: managed).
SAP promises that performance will be the same regardless of whether a
customer wants to keep it on premise and in house, or hosted on someone
elses servers in a managed cloud, or (and this is probably the preferable
option for many current SAP customers) a hybrid mix of both.
SAP S/4HANA Finance is designed to work with SAPs user interface
platform, SAP Fiori, so it will work well on desktops, laptops, tablets, or
other mobile devices, such as smartphones.
SAP S/4HANA Finance in the Cloud

The on-premise version of SAP S/4HANA Finance works pretty much
like SAP financials solutions have always worked: You license the soft-
ware, a capital expense, and run it on an infrastructure you own. The only
significant difference with SAP S/4HANA Finance is that you also have to
buy the SAP HANA server.
The cloud version runs on SAP HANA Enterprise Cloud, a managed
service. SAPs model for this service is to have the customer license the
server, but then run it on servers SAP controls. Every customer gets its
own server(s), but unlike with on-premise options, the customer is not
allowed to make modifications. The customer manages the SAP applica-
tions and business rules that run it, but doesnt make customizations to
the software itself.

And in true cloud fashion, SAP takes care of all maintenance and
technical supportas well as network and application managementas
part of the subscription.
According to SAP, many companies go with a hybrid solution, pri-
marily because some part of their financial business processes already
employ a cloud-based point solution, such as the Ariba Network for
CHAPTER 8
managing invoices, or because they have remote offices, or a subsidiary or

sister company where an on-premise solution would be overkill.
Modules in the Cloud

SAP began rolling out SAP S/4HANA Finance (then known as SAP
Simple Finance) in late 2015. The following modules were available or
would soon be available:
Credit, Disputes, and Collections
Planning, Consolidation, and Analysis
Cash Management
In-House Cash
Treasury and Risk Management
Disclosure and Strategy
Shared Services Framework
Invoice Management
Risk, Process, and Audit
Fraud Management
SAP Integrated Business Planning

SAP Integrated Business Planning is now called SAP Business Planning
and Consolidation (SAP BPC) Optimized for SAP S/4HANA. It can be
hosted wherever SAP S/4HANA Finance can be hosted, either on premise
or in the cloud.
SAP does have a pure cloud offering, which now is called SAP Cloud
for Analytics. This SaaS solution comes complete with BI, planning, and
GRC features now rolled up togetherbut rather than a Microsoft Excel
interface, it has its own HTML5 user interface. We discuss this solution
in more detail later.

Human Capital Management (HCM)

Within the HCM sphere, SAP has had to backward-engineer its cloud
strategy when it acquired a cloud-based HCM solution offering, now
known as SAP SuccessFactors. With the SuccessFactors acquisition, SAP
made a giant leap in its HCM offerings, which by some were considered
not as robust as those of competitors.
CHAPTER 8
The dawn of the twenty-first century represented a giant watershed,
as human capital management went from being an operational function
to a more strategic one. Software has been a major driver of this trans-
formation, taking the bureaucratic, paper-driven approach of what was
once called the personnel department beyond its purely administrative
function into a new dynamic of talent management and cloud integration.
While the SuccessFactors SaaS is more of a one-size-fits-all solution
for HCM, SAP customers demanded the ability to make customizations
and integrate the data into all other SAP solutions.
As a result, SAP SuccessFactors solutions have enabled integration
with SAPs cloud platform by way of SAP HANA Cloud Platform, exten-
sion package for SAP SuccessFactors solutions. It is, in essence, a hybrid
of a hybrida SaaS that also can function as a PaaS.
The extension package is the framework by which SAP SuccessFactors
data can be integrated into the rest of an SAP ERP solution, on-premise,
in the cloud, or as a hybrid solution.
Overview of Features
SAP SuccessFactors solutions offer all the standard HCM transactions for
employees and their respective managers and combine those with intui-
tive analytics presented as simple dashboards.
SAP SuccessFactors Employee Central. Employee Central is a
portal for employee self-service HR business processes. The user interface
enables employees to update their personal information, including their
skills and experience. It also allows access to payroll and benefits portals.
Self-service HR for managers. Managers can review and track the
progress of their direct reports, see metrics for attendance and time con-
sumption, and have direct access into all talent management functions.

Specifically, SAP SuccessFactors solutions cover:

Compensation
Talent management
Learning and training
Succession and development
CHAPTER 8
Performance and goals

Onboarding
Recruiting
Social collaboration
Most important of all, the data can be centralized and analyzed, pro-
viding the famous single view into the workforce.
Integration with SAP ERP HCM

Every company has different needs when it comes to cloud adoption for
human capital management. Some companies have adequate HCM sys-
tems, but may need some help in the talent management department.
Some may have an HCM system that has been unchanged for many years
and is in need of a total refresh. In the latter case, it is usually the business
that is crying out for modernization with the hope of getting improved
performance.
Across the adoption curve for SAP ERP HCM customers, companies
might have a mature and robust SAP ERP HCM implementation but want
to improve their talent management capabilities. So they will add SAP
SuccessFactors and integrate it with SAP ERP HCM. Others may want to
put their HCM processes onto the latest solutions, and therefore move all
of it to SAP SuccessFactors and then integrate that into SAP HANA (or
SAP S/4HANA) and the other solutions in SAP Business Suite, such as
SAP ERP Financials.
For those looking to overhaul their HCM business processes com-
pletely and move them to SAP SuccessFactors in the cloud (yet keeping an
integration with SAP ERP), this can be an attractive approach (see Figure
8.3). But for many companies, this is too big a step, particularly if they
have a mature HCM system.

Full Cloud
Cloud
Core HR +
Talent + Analytics
SAP SuccessFactors
CHAPTER 8
Delivered and Maintained Integrations
On Premise SAP ERP
Figure 8.3 In determining the right cloud mix for their business, some
companies may opt to move all of their HCM processes to the cloud with
SAP SuccessFactors, and then integrate those cloud solutions with their
on-premise SAP ERP core
One option is to split core HCM processes between SAP SuccessFac-

tors and SAP ERP HCM in a core hybrid model (see Figure 8.4). For
example, SAP SuccessFactors can manage talent management, while
payroll and time management are managed by SAP ERP HCM or a
third party.
Core Hybrid
Cloud
Core HR +
Talent + Analytics
SAP SuccessFactors
Core HR
(only for certain processes)
On Premise SAP ERP
Figure 8.4 In a core hybrid model, HCM processes can be split between
SAPSuccessFactors (cloud) and SAP ERP HCM (on premise)

Here is a draft architecture of a hybrid model in which SAP

SuccessFactors talent management capabilities are integrated into SAP
ERP (see Figure 8.5). Note all the various potential integration points
with SAP ERP HCM and SAP ERP Financials.
CHAPTER 8
SAP SuccessFactors SAP ERP HCM

Employee Master Data,
Talent Foundation Reporting Relationships etc.
Job Profile
Workforce Analytics Analytical Extractors
Personnel Administration
Competency Ratings
Performance & Goals
Salary Data
Compensation Pay Adjustments, etc.
Assignments, Bonus Basis

Variable Pay Bonus Allocation Organizational Management
Vacancy
Recruiting Execution New Hire
On/Off Boarding Trigger

Onboarding Onboarding Data
Offboarding Data
Payroll
Position
Succession
Curricula Qualifications
Learning Cost/Activity Allocation SAP ERP
Billing/Invoicing Financials
Planned 1H 2016
Figure 8.5 A hybrid cloud model for HCM, in which SAP SuccessFactors
talent management capabilities are integrated with SAP ERP HCM and
SAP ERP Financials
Or yet another approach is to run them side by side and have SAP
SuccessFactors manage those business processes that face employ-
ees and require their interaction, while other core HR processes for
management and HCM staff sit behind the firewall with some cloud
exposure (see Figure 8.6).

Side-by-Side
For All
Cloud Employees
Talent, Analytics
SAP SuccessFactors Cloud Core HR
CHAPTER 8
Core HR
On Premise SAP ERP
Figure 8.6 In a side-by-side approach, some employee-facing HCM applica-

tions are deployed in the cloud while other core HR processes (for managers,
for example) sit behind the firewall with some cloud exposure
Regardless of whether you use the hybrid or side-by-side approach,

all business processes interact with or flow through an HR cloud, which is
available to employees via SAP SuccessFactors Employee Central, as well
as interfacing with management and others via Talent Management and
Workforce Planning and Analysis (see Figure 8.7).
Identity Custom or third-party Payroll and

Management extensions e.g., document Time Management
management
CRM processes e.g., employee

purchase discounts
Governance, Risk,
and Compliance
HR Cloud
Employee Central
Downstream integrations
Employee Central Payroll e.g., ALE (Application Link Enabling)
EH&S Incident Talent Management
Management Workforce Planning & Analytics
Benefits Administration
Travel ERP Financials ERP Logistics

Management
Figure 8.7 An overview of SAP ERP business processes supported by

SAPSuccessFactors Employee Central integrations

Migrating SAP ERP HCM to SAP SuccessFactors

SAP has developed several methods to migrate SAP ERP HCM data to
SAP SuccessFactors. According to SAP, customers can employ the stan-
dard User Data Connector via an SAP SuccessFactors BizX add-on. The
data can be loaded via a standard file process or, if a customer has SAP
Process Integration (SAP PI), directly into SAP SuccessFactors BizX.
CHAPTER 8
For recruitment and candidate hire data going the other way, from
SAP SuccessFactors into the SAP system, there are two pre-built integra-
tion points, according to SAP, which are also part of the SAP SuccessFactors
BizX connector.
A Look Ahead
SAP SuccessFactors continues to expand its product suite, either having
added or planning to add a number of features.
As part of employee management, SAP SuccessFactors will add auto-
mation to generate new employee documents, such as certifications of
employment or letters of reference. It will tweak and expand its guided
process to add new contract or freelance workers to the system.
On the time management front, SAP SuccessFactors has announced
on-call time and allowances in time valuation from there replicated into
SAP SuccessFactors Employee Central Payroll. Also, a new time work-
bench will be available, so that regular and temporary workers and their
respective schedules can be seen in a calendar view, as well as the ability
to search for and assign valid work schedules.
With regard to benefits administration, SAP SuccessFactors is chang-
ing its employee enrollment process and contains automation tools to
transfer allowances, pensions, and insurances as part of a pay component
of a deduction.
SAP SuccessFactors has announced an aggressive roadmap of where
it wants to take each module in the future:
SAP SuccessFactors Employee Central. The goal is to achieve a
worldwide reach but with a local focus on business and compliance
requirements. The solution is adding more countries and contin-
ues to add enhancements to employee benefits, payroll, and time
management. The user interface will continue to be updated and
improved.

SAP SuccessFactors Employee Central Payroll. The focus on

making this a true end-to-end payroll business process, along with
the commensurate transparency, and the ability to find root causes
when something goes wrong, has been the objective of Employee
Central Payroll from the beginning. Even more focus will be put
on audit and compliance trails to identify who did what when
CHAPTER 8
throughout the process.
SAP SuccessFactors Recruiting. As one of the strengths of SAP Suc-
cessFactors, and one of the major reasons a cloud presence becomes
necessary, this will continue to be an area of emphasis, with better
integration into mobile, SAP Business Suite, and client input.
SAP SuccessFactors Learning. SAP SuccessFactors Learning will
lean more on SAP HANA to provide smart recommendations
tailored by employee based on job, skills, learning preferences, and
more. It also will ensure a mobile-first approach to make it more
convenient and thereby more effective for the employee.
SAP SuccessFactors Performance & Goals. Expect to see greater
expansion into self-service and extensibility.
SAP SuccessFactors Workforce Analytics and SAP SuccessFac-
tors Workforce Planning. There will be increased emphasis on
making analytics around the workforce closer to real time, while at
the same time expanding content, metrics, and benchmarks. SAP
SuccessFactors also plans to enhance its strategy to bridge work-
force planning and finance, as well as expand connectivity and
API availability to make this data and analytics available to a wider
application.
SAP SuccessFactors Compensation. SAP SuccessFactors announced
that it will deploy a new compensation forecasting and modeling
view that mirrors consumer-like approaches. It also will expand its
off-cycle compensation planning and self-service tools.
SAP SuccessFactors Succession & Development. There will be an
enhanced user experience around the matrix grid and talent pool
tools, as well as a new mentoring tool for talent development. There
also will be new tools to assist with strategic succession.

SAP SuccessFactors Mobile. Making SAP SuccessFactors work on

a wide variety of mobile devices is a central driver. As the Android
platform continues to expand, SAP SuccessFactors plans to bring
its Android offerings more in line with what is provided for iOS.
Also, as is typical in an SAP culture, greater emphasis will be placed
on enhancing security.
CHAPTER 8
Customer Relationship Management (CRM)

Some of SAPs offerings in the cloud, such as financials, are one to one.
Others are transformed as a result of acquisition, such as SAP ERP
HCM to SAP SuccessFactors. But others are converted into whole new
approaches and products. SAP CRM is one of those.
SAP CRM, at least in the cloud, has been rebranded SAP Hybris
Cloud for Customer (formerly known as SAP Cloud for Customer). CRM
has been broken apart and rechanneled in the cloud into several products:
SAP Cloud for Sales, SAP Cloud for Marketing, SAP Cloud for Service,
SAP Social Media Analytics by Netbase, and an acquisition, SAP Hybris.
Lets look at a few of these product areas in more detail.
SAP Cloud for Sales

SAP Cloud for Sales is SAPs answer to SalesForce.com, a cloud-based
sales support solution built on SAP HANA.
SAP Cloud for Sales is designed to manage sales transactions from
identification of the customer all the way through to the sales order (see
Figure 8.8). It has tools to identify and track customer demand, lead gen-
eration, customer contacts, and sales opportunities, as well as the transac-
tional abilities to generate sales quotes and manage sales orders.
Customer Marketing Account

Opportunity Sales Quote Sales Order
Demand Lead Contact
Figure 8.8 SAP Cloud for Sales manages a sales transaction from a
customer expressing a need all the way through to the purchase

The solution offers the following functionality:

Account management
Opportunity management
Email and notes integration
Enterprise mobility
CHAPTER 8
Productivity and personalization
Collaboration and social selling
Sales performance management
Back-office integration
Real-time and predictive analytics
SAP Cloud for Service

SAPs call center and customer service solution has a cloud version that
includes multi-channel service ticketing, self-service customer portals,
and integration with SAP ERP.
SAP Cloud for Service has tools to handle incoming communica-
tions from customers in any medium, including phone, web, and email. It
automates the processing of that communication and has tools to resolve
issues (for service calls) and to respond as well as close the ticket (see
Figure 8.9).
Incoming
Processing Resolve Issues Respond Close
Communications
Figure 8.9 A process overview of SAP Cloud for Service

SAP Hybris
This area is evolving almost daily, the result of SAPs acquisition of
hybris, a marketing technology company that included tools for data
management, market segmentation, and campaign recommendations
via analytics.
With SAP Hybris solutions, companies can gather structured and
CHAPTER 8
semi-structured data (such as that from social media) and analyze it to

predict customer behavior. The tools can be used to plan marketing cam-
paigns and to execute those campaigns as well.
Integrating SAP Hybriss popular e-commerce solution with SAP
ECC was a critical factor in making the acquisition of hybris a success.
SAP Hybris now comes with several out-of-the-box integration scenarios
to connect with SAP ECC.
The integration between SAP Hybris and SAP ECC takes place within
SAP Hybris Commerce, data huba web application that accepts and
relays files and messages between SAP Hybris and third-party solutions.
The same tool is the mechanism to transmit and receive data from SAP
ECC. Out-of-the-box, the data hub contains extensions that enable it to
integrate with SAP master data and SAP ERP using SAPs IDoc format.
The SAP Hybris data hub can relay a sales order to SAP ERP, for example.
Business Intelligence and Analytics

SAP Cloud for Analytics replaces SAP Cloud for Planning, but instead
of a mere rebranding, its a new, expanded product that embraces the
concept of bringing robust analytics to everyone via the cloud.
While SAP is promising to continue its investment in all of its
on-premise analytics solutions, it is holding out the tantalizing promise
of an analytics solution with a consumer-grade user interface available
anywhere, producing real-time results for a single truth and a single view.
Thats the intention. Heres how they plan to get there (see Figure
8.10).

SAP Cloud for Analytics

Provide new SaaS All analytics capabilities Consumer-grade Embedded and High-performance
in one product user experience standalone real-time platform
analytics capabilities
Software-as-a-service in the public cloud
Data Level
Interoperability
CHAPTER 8
Enterprise BI Agile Advanced EPM GRC
SAP BusinessObjects Visualization Analytics e.g., SAP Business e.g., SAP Risk
BI Suite SAP Lumira SAP Predictive Planning and Management
Continued investment Analytics Consolidation
BI 4.2 Lumira 1.29 Risk Management
in existing solutions Design Studio 1.6 Predictive Analytics 2.4 BPC 10.1 NW SP08 10.1 SP11
Analysis Office 2.2
On-premise and/or private cloud deployment options
Figure 8.10 SAPs overall analytics strategy
The first version under the SAP Cloud for Analytics brand offers the
following functionality:
Core capabilities
A personalized home screen, displaying analytics in a browser-
based interface
Discussion and sharing tools
Connections and integrations with on-premise SAP HANA and
SAP BW
Business intelligence:
Data exploration
Google Drive integration
Planning:
Baseline and power planner features
Allocations
Reports
Events
SAP Digital Boardroom:
Executive meeting support
Multi-touchscreen support

SAP plans to have the following innovations available for version 2.0:
Core capabilities
Enhanced analytics
Enhanced data connectivity
SDKs
Next-generation data preparation
CHAPTER 8
Extended mobility support

Embedded predictive capabilities and workflows
Business intelligence
Universe connectivity
Planning
Enhanced baseline and power planner features
Packaged applications
Calculation and workflow
Predictive analytics
Exploratory analytics
Model-based what-if scenarios
Interoperability with other SAP Cloud for Analytics applications
SAP Digital Boardroom
Mobile support
Predictive workflows
Enterprise risk integration
Value driver tree-based simulation
The eventual goal is to create a fully functional analytics platform
thats as robust as the on-premise version, but with the ease of use of an
internet browser.
Supply Chain Management (SCM)

Probably of all the modules in SAP ERP, supply chain appears to offer the
fewest configurations for the cloud.
Most of the solution is oriented toward on-premise solutions, but var-
ious pieces are cloud-enabled or native to the cloud.
SAP Connected Logistics is a business network for logistics that
enables a company to have visibility into the supply chain of its partners
who, for obvious reasons, are not behind the firewall.

SAP and the Internet of Things

One of the fastest growing sources of data is the so-called Internet
of Things, or IoT. Gauges, monitors, and sensors, along with the
equipment, environments, and processes that make them neces-
sary, are producing massive amounts of telemetric data, much of
CHAPTER 8
it outside a protective firewall and instead transmitted and stored
in the cloud.
SAP HANA Cloud Platform has been designed to support IoT
services and incorporate IoT data via an area of the platform
known as SAP HANA Cloud Platform, Internet of Things services
(IoT services). Here, SAP customers can find components that
support a variety of IoT scenarios.
IoT servicesprovide interfaces for registering devices and their
specific data types, sending data to a database running on SAP
HANA Cloud Platform. The two primary components over which
the services and data travel are the Remote Device Management
Service (RDMS) and the Message Management Service (MMS).
Customers employ a graphical user interface called the Internet
of Things services cockpit, which provides access to the services.
MMS provides various RESTful APIs that devices can employ to
transmit data toIoT services, which in turn process the data and
persist the data.
Users access the RDMS via the IoT Services cockpit to regis-
ter new devices, define schema of messages, and define the trust
relationship required by devices to interact with the MMS. Accord-
ing to SAP, the IoT Services cockpit and RDMS are provided as
cloud services and can be used with subscriptions.
While capturing, storing, and analyzing IoT data does not
require IoT services, the advantage is that by its native cloud envi-
ronment, customers can avoid having to build cumbersome and
elaborate network interfaces. Each integration point represents
a potential threat to network security, but by keeping the IoT
infrastructure on the cloud, fewer resources are required for the
protection and monitoring of the internal landscape. IoT services
reduce the amount of security infrastructure required. Addition-
ally, SAP HANA Cloud Platform comes with its own security-based
services, such as OAuth 2.0.

SAP Integrated Business Planning is part of SAP Sales and Opera-

tions Planning (S&OP). There is a cloud-based version that enables com-
panies to integrate sales and operations planning, demand planning, and
inventory optimization, as well as combine it with social collaboration
and BI tools.
For smaller companies, SAP offers most of the SCM solutions in the
CHAPTER 8
cloud as part of SAP Business ByDesign.
SAP Business ByDesign

SAPs introduction into SaaS was SAP Business ByDesign, which took its
sprawling enterprise resource planning software, simplified it, and made
it available on a month-to-month subscription basis via the cloud for
growing small and mid-size businesses.
In addition to appealing to the so-called mid-market, SAP posi-
tioned this product to its larger customers as a way to bring subsidiar-
ies and acquisitions into the fold. Rather than implement full-blown
instances of SAP ERP, a company could move the subsidiary or acquisi-
tion to SAP Business ByDesign as an affordable alternative. As with any
budget solution, there are tradeoffs; notably, what you gain in afford-
ability, you lose in customization and specialization.
Despite those limitations, SAP Business ByDesign packs a significant
punch, boasting more than forty end-to-end business processes and con-
figurability in a wide range of languages and currencies. The most import-
ant benefit is that it is natively compatible with SAP ECC, SAP Business
Warehouse, and SAP Solution Manager. Financials created on SAP Business
ByDesign will roll up neatly into your SAP ERP Financials at the home office,
SAPs BI tools will consider it another SAP instance, and your IT organiza-
tion can manage it without having to expand its skills and technology.
Most, if not all, of the SAP modules are present, including the
following:
Financials. SAP Business ByDesign includes well-known SAP
scenarios for accounting based on generally accepted accounting
principles (GAAP), including general ledger, accounts payable,
accounts receivable, controlling, customer and vendor transac-
tions, and all the reporting related to these functions.

HCM. Payroll, compensation, employee information (both from

a management level as well as tools to give employees visibility
into their personal information and relevant corporate informa-
tion, such as policies and procedures), travel and expense, and
time recording are all contained within this module, along with
business process tools to track employees and let employees track
CHAPTER 8
themselves.
CRM. SAP Business ByDesign includes a robust customer database
as well as salesforce automation and support.
SCM. As with SAP ERP, SAP Business ByDesign has scenarios for
tracking product development and supply chain operations, with
integration into procurement planning and supplier relationships.
It can serve as the backbone for all logistics planning and execu-
tion, including manufacturing, warehousing, and distribution.
Procurement. SAP Business ByDesign tracks suppliers and other
vendors, and has a variety of business processes related to purchas-
ing and all other procurement activities.
Project Management. This module has multiple tools for enabling
collaboration and tracking projects, as well as integration with
financials and resources to measure progress and ROI.
SAP Business One

While SAP Business ByDesign is for small and mid-size business, it is
more M than S. For small businesses, that is, companies with fewer
than 100 employees and fifty users, there is SAP Business One.
SAP offers this solution either on premise or in the cloud, and like
SAP Business ByDesign, it has modules that correlate to SAP ERPfinan-
cials, CRM, SCMbut doesnt include some of the major areas, such as
HCM and project management. SAP breaks down the functionality along
the following lines:
Accounting and finance. SAP Business One automates the day-to-
day journaling as well as financial relationships, such as banking
and reconciliations. It also can track budgets and cash flow. There
are baked-in business processes for accounts payable, accounts
receivable, and general ledger, as well reporting across all financial
capabilities.
Sales and customer management. SAP Business One contains

tools for salesforce support and salesforce management, including
a CRM database and reporting capabilities. There also are business
processes for creating and tracking marketing efforts.
Purchasing and operations. SAP Business One can handle invoic-
ing, order-to-pay processing, payments, returns, purchase orders
CHAPTER 8
and more, while at the same time tracking suppliers and managing
those relationships.
Inventory and distribution. With SAP Business One, small com-
panies can track shipments, manage inventory, and manage pricing.
Reporting and administration. SAP Business One comes with
SAP Crystal Reports, which integrates with Microsoft Office.
A Cloudy Attempt, Perhaps

And for today, that concludes our tour of SAPs applications in the cloud.
As noted earlier, this chapter has been very much a point-in-time review;
it could easily be expanded upon for pages and pages. The point, rather, is
to gather a snapshot view of this information in one place, and update it as
frequently as possible to provide you with a meaningful reference point to
help assess and monitor your own SAP cloud application strategy.

Conclusion
This book has been a high-level look at the cloud and the role that SAP
solutions can play in it. There is one thing we can all agree on: The cloud
is growing and SAP has staked much of its future in it.
While the 30,000-foot view this book has presented no doubt will be
helpful as you plan your own entry into the cloud, what about real-world
examples? Has anyone successfully launched SAP solutions in the cloud?
The obvious answer is yes, especially if you consider that SAP now
includes the SAP SuccessFactors and SAP Ariba products, which are fully
cloud based. Integrating these applications into on-premise SAP solutions
is where the real benefits can be found.
Here are two very quick examples of cloud-based SAP implementa-
tions. I assure you there are many more, including the one showcased in
Appendix C.
Case Study: Freescale Semiconductor, Inc.1
Employees: 18,000
Freescale, a semiconductor chip manufacturer, was a division of Motorola

that was spun off in 2004. With independence came the need for its own
ERP system. The company knew it wanted to outsource its SAP systems
and, in 2005, after rigorous research, it selected IBM. Outsourcing its SAP
systems produced savings and efficiencies for the company, automatically
ensuring standardization and improved ITIL best practices.
Later, Freescale and IBM investigated moving SAP services to the
cloud. We wondered, were there any additional savings and other advan-
tages to be found? The biggest benefit we found was through economies
of scale by moving Freescales global SAP ERP instance from a dedicated
1
Please see the full case study at http://www-01.ibm.com/common/ssi/cgi-bin/
ssialias?htmlfid=SPC03466USEN.

Conclusion
hardware environment to IBMs SmartCloud for SAP Applications plat-

form. Even with hosting and licensing fees, Freescale realized a twenty
percent TCO savings on its SAP ERP.
Freescale is a global company and its SAP instances run around the
clock. The cutover to the cloud had to be quickless than one daybut
thats one of the advantages of moving to the cloud. The Freescale cutover
was completed in fourteen hours. There were no missed SLAs.
Freescale wanted to take advantage of improved back-up and recov-
ery. By using some high-end compression, we were able to get them from
three terabytes to one terabyte, which resulted in faster back-ups (cutting
time by eighty percent) and, if needed, faster recovery (from a normal
twenty hours to six or fewer) as well as efficiency in overall performance
of the system.
Case Study: Edwards Limited2
Employees: 3,200
Edwards is a precision maker of high-end industrial pumps. In 2007, a

venture company, CCMP Capital, purchased Edwards. In 2012, it was
taken public, and two years later it was purchased by Swedish multina-
tional Atlas Copco AB.
Edwards went through a fluid ownership period; within a period of a
decade, it went from private ownership to a venture capitalist to an IPO to
an acquisition. This made Edwards an ideal candidate to not only refresh
its technology, but to move its back-office systems to the cloud.
The result was fifty percent annual savings realized within the first
five months. The cutover was forty-one hours and, again, no SLAs were
exceeded.
Other benefits:
Seventy percent increase in computing power
Fifty percent faster CRM business processes
Thirty percent faster BW load processing
2
Please view the full case study at http://www-03.ibm.com/software/business-
casestudies/us/en/gicss67sap?synkey=U102933I02946N79.

Conclusion
In both case studies, the companies outsourced their SAP systems

and moved their respective instance or instances into the cloud. Most of
our clients implement SAP solutions in a private cloud, while a growing
percentage are moving to a hybrid cloud.
Cloud Considerations
As I hope this book has made clear, the decision to move to the cloud is
not one to take lightly. It should only be made after a careful analysis and
deep examination into how realistic the benefits will be.
Furthermore, those benefitsincreased speed of deployment,
increased user adoption, reduced support requirements, and lowered cost
of implementation and upgrades, among otherscan only be realized
with a solid understanding of the cloud, its costs and constraints, and the
complexity of your current SAP ERP implementation.
The cloud pervades todays technological landscape. It is no longer
theory; it has become integral to our daily lives, both private and profes-
sional. Users expect technology to be as seamless in business as it is in
their daily lives. The cloud delivers; it is on-demand, self-service technol-
ogy that can be accessed from anywhere and at any time.
For business, the lure of the cloud is equally powerful, offering the
opportunity to pool resources to make systems more elastic. There also
is a business driver to take advantage of non-traditional data, such as
that generated by social media, as well as to expand channels of com-
munication made possible by mobile devicesall to strengthen the bond
between the company and its customers, its partners, and its employees.
As I have intimated throughout this book, if you build it, there is no
guarantee your target audience will come. Any move to the cloud must be
made for strategic reasons that conform to the future instance of where
a business is headed. Most cloud implementations fall short because of
poor strategy, a lack of business innovation, or an underestimation of the
complexity of shifting to the cloud.
Those companies that successfully move their SAP implementations
into the cloud are those that follow a well-designed roadmap. They mea-
sure twice and implement once, to adapt an old adage. These companies
spend the time, expense, and resources to construct a careful workload
analysis that examines the maintenance, scalability, reliability, security,

Conclusion
and network infrastructure required to operate a mission-critical SAP

system in the cloud.
While many companies are moving SAP systems to the cloud, many
are not. It is important for those companies who have conducted a careful
analysis and come to the conclusion that the cloud is not right for them
to keep in mind that SAP will continue to evolve its cloud offerings. SAP
is making giant investments in its SAP HANA and SAP S/4HANA plat-
forms to make certain they work well in the cloud. SAP, like the rest of us,
understands that the cloud is the future.

APPENDIX A
Benefits Estimator
Metrics
What follows is a detailed explanation of the range of metrics covered

by the IBM Cloud Managed Services Benefits Estimator for cloud-based
projects, which we reviewed in detail in Chapter 5.
You can try out the tool at https://roianalyst.alinean.com/ibm_bva/
AutoLogin.do?d=616569597576534238.

128
SPEED
Appendix A
Challenges Current Practices Scores

0 1 2 3 4 5
Time to Market What is the typical Over 3 months 2-3 months 1-2 months 1-4 weeks Less than 1 week
time to deploy a
new SAP workload
environment?
0 1 2 3 4 5
Customer How do you view Customer churn Our business Customers are Once we satisfy We operate in a
Reach the value of your is inherent in model focuses essential to our a customer, highly competitive
customers and the our industry. on partners business. We they are likely industry where
ability to serve them? We turn over a and other try to eliminate to stay with our attracting new
high percentage corporations, turnover organization for customers is difficult
of customers not individual whenever a lifetime. and expensive. We
annually. customers. possible. try to be rapidly
available to meet our
customers needs.

2016 insiderBOOKS. Reproduction prohibited. All rights reserved.
ECONOMICS
0 1 2 3 4 5
Total Cost of Are your IT workload TCO expenses Expenses IT infrastructure IT infrastructure We have controlled
Ownership environment are not fluctuate rapidly expenses are expenses expenses with
expenses predictable at depending on somewhat are usually predictable cost
predictable? all. new hardware, predictable. predictable but models that flex with
software, and not flexible or the business.
maintenance agile.
requirements.
0 1 2 3 4 5

Resources How well are IT We are We are under We are staffed We have the We work with
resources staffed? severely under resourced, but correctly, but perfect amount strategic partners
resourced, we are still able our IT resource of resources. in order to get the
with difficulty to typically skill set is not Our close most expertise in the

finding the right meet the IT up to date process is market.
qualified people. requirements. on the latest efficient.
technologies.
Appendix A
129
ENVIRONMENT
130
Appendix A

0 1 2 3 4 5
Availability of What is your current <98% 98.0% 98.5% 99.5% 99.9% or more
SAP system SLA for availability of
(not just your SAP system?
infrastructure)
0 1 2 3 4 5
Security Does your We primarily We have written We proactively We use rules- We fully ensure the
organization have rely on tips and policies and monitor for based logic security of digital
the technology in information from procedures to suspicious to uncover channels through
place to help identify outsiders. prevent security activity. suspicious multilayered security
and prevent security incidents. behavior and services and
incidents? security breach proactive monitoring,
activities. and by working
with partners that
meet industry
defined governance
and compliance
requirements.

APPENDIX B
The following article appeared in the April-June 2016 issue of SAPinsider

magazine, within the Run Your Business in the Cloud special report
(www.SAPinsiderOnline.com).
Becoming a Digital
Enterprise Starts with
Cloud
Align Business and IT Objectives to Embark on a
Transformation Journey
by Jan Jackman, Brian Burke, Michael Ryan, and Sanjay Kumar Das
An uncomfortable truth for many companies is that IT organizations are

becoming too slow to respond to the needs of the business. There is grow-
ing discontent as companies realize that complex on-premise systems are
not responsive enough for a business to compete in a fast-paced econ-
omy that values customization, improved customer service, and immedi-
acy in a robust, integrated network of partners, customers, and vendors.
Complicating matters is an explosion of structured and unstructured data
coming into the enterprise and the need for companies to immediately
turn this information into actionable intelligence.
A growth in transactional data through mergers, acquisitions, or even
new business models is only part of it; a surge of sensor data is driving the
fervor for Internet of Things (IoT) and 4th Industrial Revolution technol-
ogies and solutions, and the rise of mobility as a preferred consumption
model requires that data has to be available at any time, on any device.

Appendix B
Considering that close to 75% of the worlds transaction revenue

touches an SAP system,1 the challenges outlined above should be easily
recognizable for SAP customers, many of which have developed core,
mission-critical systems in an on-premise environment over the past few
decades. Many of these customers are considering how best to achieve the
needed responsiveness with which they can deliver increased agility and
flexibility, drive innovation, and lower costs.
Outlining a strategy to answer these difficult questions and embark
on a journey to become a 21st-century agile enterprise is known as a
digital reinvention. Increasingly, this entails transitioning on-premise
legacy IT systems into a hybrid cloud environment. While some com-
panies are initially reluctant to leave homegrown customizations behind,
this reluctance quickly fades when taking a business process or use case
to the cloud is shown to yield results otherwise impossible in a complex
on-premise landscape.
Begin to Think Digitally

To take the first step in a digital reinvention journey, companies must
align business objectives with an overarching IT strategy to determine the
best way to establish and expand their digital footprint (see the 4-Step
Roadmap for IT Optimization sidebar). This requires a complete reex-
amination of business processes and, in some cases, looking closely
at long-standing business models to explore if there is potential for an
Uber-ization upheaval of the industry. What sort of process improve-
ments could be made with real-time insights? How could a business better
serve its customers if social or sensor data was integrated with its supply
chain? For product manufacturers, what changes can be wrought when a
sensor is attached to the product?
Companies that undertake this exercise swiftly discover that the
cloud is an essential ingredient as the quickest and most cost-effective
way to capture increasing data volumes and create business insights. This
is true for several reasons:
The clouds scalable model means that organizations can scale up or
down on demand according to infrastructure needs, which is key
to providing the responsiveness necessary to pivot in near real time
to pressing business concerns.
1
See bit.ly/corporatefacts.

Appendix B
4-Step Roadmap for IT Optimization

Key to the successful implementation of the data center transfor-
mation to a cloud landscape is a clear roadmap, which IBM builds
with customers as part of IT optimization engagements. There are
four steps on this roadmap, each with significant savings poten-
tial that can be reinvested to fund the next step (see Figure 1):
Simplify: Includes consolidation, elimination of unneeded re-
sources, and harmonization of release levels of operating sys-
tems, applications, and middleware
Virtualize: Enables base resources (such as server, storage,
and network) for dynamic and flexible behavior
Automate: Introduces industry best practices, scripts, and
workflows, enabling companies to efficiently manage dynamic
behavior
Cloud (service management): Introduces service-level
managers who can automatically adapt systems to align with
the service-level agreements
During planning workshops at the beginning of each phase, IBM
and the customer collaborate to develop a more granular road-
map depending on specific needs.
IT service management
Potential:
Unlimited
savings
Introduce policy-driven
Cloud self-management
Service-level managers
and policies
Potential:
Business value
20% savings
Manage dynamic infrastructures
Automate Provisioning, automation scripts, IT service
management, and dynamic infrastructure
Potential: management
10% savings
Enable flexibility of resources
Virtualize LPARs, virtual machines, SAN, and virtual file systems
Potential:
10% savings
Prepare the transition
Simplify Harmonize release levels, consolidate systems,
and eliminate unneeded resources
Business flexibility and responsiveness
Figure 1 A look at the four-step roadmap for IT optimization

Appendix B
The cloud offers a rapid deployment to a technology refresh without

having to invest in additional hardware, an important consider-
ation for a quicker path to innovation.
This financial flexibility allows companies to shift their budgets
from capital to operating expenses, letting the business pay only
for what is used and freeing up resources that can be reinvested in
the business.
The journey toward becoming a digital enterprise most often
incorporates a hybrid cloud strategy because it accomplishes the afore-
mentioned objectives while also satisfying long-held requirements
concerning system security, mission-critical availability, performance,
and business continuity. A hybrid strategy strikes the right balance
between honoring established business needs while still making the
necessary adjustments to move the business forward for the digital age.
A 3-Pronged Journey
Typically, there are three types of movement toward a digital enterprise
that together define a hybrid approach:
The first is optimizing existing systems to make them cloud-ready;
this means adopting certain standardizations in return for a flexible
infrastructure that allows a company to extend its reach globally.
This step satisfies the requirement for speed to deployment in a
flexible platform for the digital age.
Second, once existing systems are optimized, the question becomes
how to enhance and integrate a new front-end user experience with
these back-end core systems.
The third movement is recognizing that integrating new software-
as-a-service (SaaS) applications with back-end systems can also
lead to innovation, as does leveraging a cloud platform to develop
or extend existing applications.
The fact that 90% of the data in the world has been created in the last
two years2 makes it very difficult for organizations to embark on a digital
journey without outsourcing either some or all infrastructure to managed
2
See www-01.ibm.com/software/data/bigdata/what-is-big-data.html.

Appendix B
services. IT departments that are already stretched thin simply do not

have the resources to provision and manage a new cloud infrastructure
that allows a business to change processes on the fly. This is especially true
if that cloud infrastructure includes moving to new technology. For the
SAP customer, this often means a migration to SAP S/4HANA.
This drives at the strength of the collaboration between IBM and SAP
in helping the SAP customer with a digital reinvention, as both compa-
nies share a vision for what it means to become a truly digital enterprise.
SAP and IBM are both firmly established as leading cloud companies,
with SAP positioning itself as a leader in in-memory database technology
and architecture, specifically with SAP HANA and SAP S/4HANA, and
IBM positioning itself as a leader in cognitive solutions.
The significant investments that both companies have made in
extending cloud capabilities complement what each company has brought
to market. IBM has made major investments in its cloud platform that has
enabled it to be named as a top performer and leader in the private and
hybrid cloud market by Synergy Research.3 For SAP, investments include
coalescing its cloud strategy around SAP S/4HANA and making evolu-
tions to this next-generation business suite. Together, these capabilities
help guide a customer along that path of three movements toward a com-
plete digital reinvention.
A Foundation for the Digital Core

With a move to SAP S/4HANA as the digital core of the enterprise and
a strong driver for a cloud migration, companies capitalize on the bene-
fits of both the cloudand the simplified SAP S/4HANA architecture that
includes a complete rewrite of SAP ERP Central Component (SAP ECC)
code phased by functional area and moving some application code to
the database layer as stored database procedures. This new data model
removes old tables, aggregates, and indices to fewer column-based tables,
resulting in a single source of truth, real-time operational analytics, and
integration to both IoT and business networks for real-time collaboration
in the networked economy.
Many of these benefits can only be realized in the cloud, and IBM
Cloud for SAP Applications helps optimize an SAP environment and
3
See www-03.ibm.com/press/us/en/pressrelease/48829.wss.

Appendix B
ameliorate some of the common challenges associated with SAP cloud

workloads, such as cost, complexity, performance, resiliency, and special-
ization (see the End-to-End Cloud sidebar). At a high level, these chal-
lenges are addressed by the following:
Using economies of scale helps improve cost efficiency.
Automation and standardization ease complexity.
An enterprise-class infrastructure helps manage performance
requirements.
A cloud-enabled infrastructure backed by service-level agreements
(SLAs) addresses resiliency for core business processes.
Teams of SAP specialists who average nearly a decade of experience
with SAP solutions address specialization requirements.
A Gateway to Innovation: Industry Examples

However an organization chooses to optimize its SAP cloud landscape
with IBM, taking advantage of this collaboration between in-memory and
cognitive leaders will result in benefits that are restricted only by imagina-
tion. In human resources, for example, companies are using IBM Kenexa
Talent Insights, powered by IBM Watson, to improve business outcomes
by starting to predict the impact of talent decisions. Because the solu-
tion can run talent analytics on any workforce data, potential to over-
haul existing HR processes increases greatly when it is integrated with the
in-memory capabilities of SAP HANA. This means that Kenexa custom-
ers who also run SAP solutionsSAP SuccessFactors solutions or SAP
S/4HANA, for instancecan bring real-time capabilities into the picture
with additional predictive tools that SAP HANA provides.
Healthcare provides another compelling use case. Hospitals are using
IBM Watson Health, IoT technology, and advanced analytics to explore
new ways of learning about and treating disease. For a hospital that is also
using an SAP solution as its enterprise system of record along with analytic
capabilities embedded in SAP HANA, the possibilities of leveraging IBM
Watson Health from the perspective of improved business processes can
be endless.
One joint IBM and SAP customer in the airline industry is lever-
aging cognitive and in-memory computing to significantly improve its

Appendix B
End-to-End Cloud
IBM Cloud for SAP Applications helps companies optimize their
SAP environments, addressing many of the key challenges and
requirements to run SAP workloads in the cloud, such as cost, com-
plexity, performance, scalability, and resiliency (see Figure 2). The
managed platform-as-a-service (PaaS) offering uses cloud capa-
bilities to address these challenges and offers services to address
issues that cannot be covered with just a standard cloud solution.
For example, IBM Cloud for SAP Applications provides an archi-
tecture that can easily scale to manage high-growth requirements
and workload peaks that may occur throughout the year. Built on a
cloud-enabled architecture, the managed PaaS adds the resiliency
and service-level agreements (SLAs) needed for critical SAP work-
loads that dont have built-in resiliency like cloud-native products.
IBM Cloud for SAP Applications has performance SLAs pro-
vided by the IBM Cloud for SAP Applications infrastructure built
for high input/output requirements. Standardization and automa-
tion help reduce the complexity of SAP landscapes.
Lastly, leveraging economy of scale and deep SAP expertise
enables a more cost-effective option for these services, which
include a billing system that helps customers move from capital
expenditures to operational expenditures.
Integration leads to new and improved business processes

On-premise Private cloud Public cloud
Managed cloud-as-a-service Platform-as-a-service Software-as-a-service
SAP HANA SAP HANA Cloud Line-of-business

Customer Enterprise Cloud Platform applications
SAP Systems SAP Business Suite Build Extend People Customer
Offering SAP Business Warehouse
Run Finance Supplier
SAP HANA datamart
Any SAP HANA
database SAP HANA
Infrastructure Common infrastructure (servers, network, storage)
Benefit Cloud as a technology enabler Cloud as a business service

Area
Core applications Next-generation applications
Hosting Cloud Client infrastructure/IBM Cloud Run by SAP on SAP cloud
Services Services IBM SAP SI and AMS delivery IBM SAP SaaS SI and AMS delivery
Figure 2 IBM delivers SAPs end-to-end cloud

Appendix B
maintenance, repair, and overhaul (MRO) processes. At first glance, this

might not seem to be a high-value target for a digital enterprise, but more
efficient MRO processes lead to a significant reduction in airline turn-
around time, which in turn leads to fewer delays, greater cost savings,
and, ultimately, more satisfied customers. With an estimated $10,000
financial hit for every hour of lost airtime, airlines must adhere to a tight
schedule without sacrificing rigorous and exhaustive pre- and post-flight
checks. Using IoT, in-memory, and cognitive solutions to predict when a
part might fail and proactively make a change, for example, can signifi-
cantly improve MRO processes and help ensure more on-time departures.
Tighter control over inventory can impact any number of downstream
processes, from warehouse and transportation management to pro-
curement. Even though MRO is a very mature process, this example
demonstrates how much of a difference can be made by adding a fairly
straightforward digital innovation.
The opportunity to make this kind of transformation exists in all
industry verticals and for any size enterprise. Increasingly, customers
realize that the business use cases or innovations they are trying to imple-
ment are difficult, if not impossible, to achieve without transitioning to the
cloud. One joint customer decided to grow the business through acquisi-
tion and realized that its existing systems could not sustain the projected
growth. Its path toward becoming a digital enterprise meant using IBM
Cloud for SAP Applications to manage its SAP HANA Enterprise Cloud
deployment, where it sacrificed some customization as a trade-off for
application standardization that it saw as necessary to improve its busi-
ness processes on a global scale. Another customer turned to SAP HANA
Enterprise Cloud because it wanted to implement advanced analytics
solutions running with SAP HANA, and a hybrid parallel cloud system
provided it with the capability to agilely extract the necessary data from
its on-premise systems without sacrificing performance.
A New Era, a New Wave

Looking more closely at SAP S/4HANA as the centerpiece of the digi-
tal core, an analogy can be made that this transformative technology is
taking the SAP customer on a similarif acceleratedpath to the one
SAP R/3 paved upon its release in the early 1990s. At that time, SAP was

Appendix B
at the forefront of innovation, dealing with the move away from the main-
frame to client-server open systems and packaged application software
and system integrators and implementation partners were riding the wave
of reengineering. Today, the wave of innovation centers around real-time,
in-memory, and cognitive, all built on a simplified system architecture
and state-of-the-art hybrid IT platform. Then, as now, SAP is the enabler
of this transformation, and IBMs SAP resources are focused accord-
ingly to help ensure that from an implementation, infrastructure, and
migration standpoint, customers can make a digital transformation with
minimal disruption.
Just as business reengineering evolved with the phasing out of main-
frame computing in favor of client-server systems, so too is the digi-
tal imperative emerging as cloud, mobile, in-memory, and simplified
system architecture combine to provide the enterprise with a means
to rapidly adapt to a digital economy. Consumer expectations for per-
sonalization and immediacy are changing delivery models of products
and services, and undertaking a digital reinvention of the enterprise
is the most surefire way to ensure that a business isnt left behind.
As a next step, organizations can access the IBM Cloud Managed
Services Benefits Estimator at https://roianalyst.alinean.com/ibm_bva/
AutoLogin.do?d=616569597576534238 to analyze potential benefits and
outcomes of working with IBM to move to the cloud.
Jan Jackman is the Vice President of IBM Cloud Services for Enterprise Applications
atIBM.
Brian Burke is an IBM SAP Global Alliance Executive at IBM.
Michael Ryan is an Executive Consultant, Global Business Services, SAP Technical

Infrastructure and Development Practice at IBM.
Sanjay Kumar Das is the Global Business Services, SAP HANA and Analytics Leader for
Europe at IBM.

APPENDIX C
The following case study appeared in the July-September 2015 issue of

insiderPROFILES magazine (www.insiderPROFILESonline.com).
Melissa Kikizas S.A.

Enters a New Era of IT
Greek Pasta Producer Integrates Operations Using
Cloud Technology and Realizes Company-Wide
Benefits
by Natalie Miller, Features Editor
Greece, the southernmost country in Europe best recognized for its

ancient landmarks and golden sand beaches, is much less known for
pasta production than its neighbor across the Ionian Sea. However,
one family-owned Greek company has climbed to the top of the pasta
food chainMelissa Kikizas S.A. has supplied pasta and durum wheat
semolina both to the region and internationally for nearly 70 years. It
is the largest pasta producer in Greece with a market share of approxi-
mately 35%.
This success did not come without growing pains. With two main
warehousesone at the headquarters in Athens, and the other at a factory
in Larissa, 200 miles north of Athensas well as 20 satellite warehouses
and distribution centers spread around Greece, Melissas local software
vendor was no longer able to meet its growing IT infrastructure needs.
And with an expanding customer base across 35 countries, it became
essential for Melissa to modernize its processes, centralize IT operations,
and integrate all activities within its warehouse operations with an end-
to-end solution.

Appendix C
AT A GLANCE
Goals: Modernize and integrate systems processes in the cloud
Strategy: Implement SAP ERP with IBM Private Cloud
Outcome: Decreased warehouse inventory levels by 10%, improved
cash flow and reduced delivery delays by 20%, and improved quality
assurance and production monitoring through paperless reporting
According to Leonidas Varvassenitis, Financial Director at Melissa,

communication across departments was slow and insufficient with the
current software, and it was difficult to know if everyone had the latest
version of the information. The lack of timely, let alone real-time, infor-
mation put the company at risk for mistakes and the exchange of inaccu-
rate information.
It also resulted in delayed reporting. To have the monthly results of
the company, we had to wait until the middle of the next month, says
Varvassenitis.
After an evaluation process, Melissa selected SAP ERP because
of its ability to adapt to Greek business methods and be used across
all areas of the company. Cost-benefit and the experience of SAPs
partners were additional considerations.
IBM, a global SAP partner, consulted with Melissa on the SAP imple-
mentation and the cloud infrastructure through its Global Business Ser-
vices. We measured our capabilities and the time frame that we had
in front of us, Varvassenitis says. IBMs consultation on which areas
should be implemented during what specific timeframe was very valuable
to Melissa. (For more information about IBM, refer to the sidebar IBM
Offers Fully Managed and Self-Service Cloud Options for Outsourcing
SAP Infrastructures.)
A move to the cloud was also an essential aspect of the success of
this project and the future success of the company. The decision to out-
source its infrastructure via private cloud was based on the companys
limited on-premise capabilities and the many modules that needed to
be implemented on the cloud platform.

Appendix C
Cloud Supports Path to Modernization

The benefits of a cloud platform can be far reaching, and for Melissa, cost
was the least compelling advantage. For Varvassenitis, cloud was essen-
tial first and foremost due to the requirements put forth by the companys
risk management policy. Security risks increased with the full digitaliza-
tion across the company, so it was not ideal to host the infrastructure in
Melissas office facilities. The first thing we realized was that we needed a
professional infrastructure to host our system and our network facilities,
and these things did not exist on our premises, he explains.
In addition to protection against risk, the capabilities and role of
Melissas IT department shifted as well. Previously, the old system
because of the minimal digitalization specifically in the production
departmentwas online just five days per week in two shifts. Now, with
the full digitalization of all the departments, the factory can work con-
tinuously, 24/7. The cloud platform is able to support these additional
requirements as well as offer the flexibility the pasta producer needed to
increase or decrease IT capability based on customer demands, without
the need to order and install new hardware.
IBMs value didnt stop at providing the cloud infrastructure.
Consultants offered valuable assistance and advicenamely their recom-
mendation of SAP BusinessObjects business intelligence (BI) solutions.
With these solutions, executives at Melissa are able to prepare specific
daily reports each morning that are accessible on laptops, tablets, and
smartphones. These reports cover vital company information, from its
cash position and sales to inventory levels and production, and the soft-
ware allows executives to quickly prepare and share the documents with
each other.
Even if an executive is out of the office, access to these documents is
available via a tablet or smartphone. The ability to have this information
at ones fingertips can be essential to business profitability. For example,
the price of wheat fluctuates daily, and as a critical raw material for the
production of pasta, this data is of constant interest to Melissa executives.
These capabilities are a very big improvement for us and give us
the opportunity to reorganize immediately and build our daily strategy
according to how the company is behaving, says Varvassenitis.
Another tool critical to the success of Melissas modernization is SAP
Business Warehouse (SAP BW). Gone are the days of disparate spread-
sheets locked on the personal computers of employees. SAP BW now

Appendix C
drives all of the companys reportingwhether for stock levels, produc-

tion quality, comparatives between actuals, budgets, previous year costs,
material prices, and so on.
Challenges Along the Way

According to Varvassenitis, the agreement for the SAP project covering
SAP services and maintenance and IBM Cloud was signed with IBM at
the end of 2012, and the 11-month project kicked off in January 2014.
The implementation was not without its challenges to overcome. A mid-
sized organization with 220 employees in Greece and another 50 in its
subsidiary in Poland and other companies across Greece, Melissas proj-
ect members were required to serve dual rolesfulfilling their duties to
the project and continuing their daily workwhich often meant working
extra hours and even weekends. It was a challenging task for Varvasseni-
tis as project manager to organize all these tasks and for Melissa employ-
ees to participate on the project.
Melissa Kikizas S.A.

Headquarters: Athens, Greece
Industry: Food and beverage
Employees: 250+
Revenue: $80 million
Company details:
Founded in 1947
Produces pasta and semolina
Distributes over 50,000 tons of pasta per year to thousands of
retailers in Greece and across the European Union
SAP solutions:
SAP ERP
SAP BW
SAP BusinessObjects BI solutions
SAP EWM
Partner solutions:
IBM Private Cloud
IBM Global Business Services

Appendix C
IBM Offers Fully Managed and Self-Service

Cloud Options for Outsourcing SAP
Infrastructures
Infrastructure as a service (IaaS)can be the difference in beat-
ing competition to market. IaaS from IBM Cloud offers a choice
of open cloud infrastructure services for IT operations. Com-
panies can use SoftLayer self-service IaaS or fully managed
IaaS to deploy both virtual and dedicated bare metal servers,
develop applications, and run production-ready workloads.
The benefits to businesses are:
Unparalleled performance consistent compute power and
a high-performance global network for self-service IaaS
Flexibility and breadth a range of options support a dynamic
hybrid cloud strategy
Complete control choose self-service with complete
control or fully managed services
Build your future on the SoftLayer global cloud infrastruc-
ture to enjoy self-service provisioning for both virtual and ded-
icated bare metal servers. With deployment in just minutes for
virtual and hours for bare metal, self-service delivers the con-
trol and flexibility to power demanding cloud applications.
A fully managed IaaS offers managed cloud services for crit-
ical enterprise workloads. IBM Cloud Managed Services provides
a fully managed IaaS cloud optimized for critical enterprise
workloads, offering service-level agreements with up to
99.95% virtual server uptime and the many advantages of a
managed private cloud.
For more information about IBMs IaaS offerings, visit www.
softlayer.com and www.ibm.com/cloud-computing/us/en/
products/ibm-cloud-managed-services.html.

Appendix C
With no prior experience working with SAP solutions, it took time

to get employees familiar with SAP terminology and processes. For this
reason, we had SAP training in the beginning of the project and very close
monitoring and participation of the two teams through the entire imple-
mentation phase, explains Varvassenitis.
Another crucial success factor of the project was working with SAP
as a team, he continues. Its important to clearly understand and iden-
tify the risks, take action as early as possible, and resolve issues quickly as
they arise. The strong cooperation with your partner is very critical. Its
also important for the key stakeholders to have decision authority during
the project. The more decision authority they have, the easier, faster, and
better the project will run.
No More Paper
With SAP ERP and IBM Cloud, Melissas departments and operations
are now connected and the production team is not overrun with paper-
work. With the previous system, we only had basic coordination and
integrationwith only accounting and commercial integrated, explains
Varvassenitis. With the new system, everything is integrated. This means
all the sales production, accounting, controlling, reporting, quality, and
warehouse management processes are no longer done either manually or
via standalone spreadsheet tools.
Nearly all operations were moved to SAP ERP on the private cloud,
and after going live on January 1, 2014, the first material benefits that
Melissa realized were regarding the stock levels. While not a main driver
for the project, the shift to SAP ERP dropped warehouse inventory levels
by 10%, which improved cash flow as well as reduced delivery delays by
20%. The deadline for monthly company resultswhich previously could
take weeks to reportis now the third working day of the month. That is
a huge improvement in this area, says Varvassenitis.
The most significant benefit, apart from shrinking the stock levels
and improvement on deliveries, is that this project ushered Melissa into
a new era within its production department. 2014 was the first year we
were able to closely monitor production losses and improve them with
clear benefits on the cost area, adds Varvassenitis.
The lack of paperwork has greatly improved quality management and
inspection, which is now done directly through the system. We have

Appendix C
improved our quality monitoring and are able to have traceability of the
goods, he says. Warehouse management has also improved across the
companys satellite locations through SAP Extended Warehouse Manage-
ment (SAP EWM). And because of that, we have improved knowledge
of stock levels and batch-level expedition of the goods. We managed to
decrease the expired goods, and this is an additional cost benefit realized.
There are improvements in almost every area of the company.
The Road to Expansion

We have to support and facilitate the new management, and a stra-
tegic goal of the project is to be altogether on the same platform, says
Varvassenitis. The new platform will support Melissas exports to more
than 35 countries, as well as allow the company to find cost opportunities
in other markets. As a unique distributor of Heinz products in Greece for
the fifth year in a row, Melissa can realize more opportunity to strengthen
its position in Greece as well as move forward internationally with these
products.
Poland is a very big opportunity for us, says Varvassenitis. Imme-
diate plans are to increase our market share in Poland, to stabilize our
presence in China, to expand in Northern Africa, and, of course, to keep
improving our sales in the local market in Greece.

APPENDIX D
Additional Resources
Podcasts
Migrating to the Cloud: Your Critical Questions Answered
Bill Clerico of IBM on building a successful cloud strategy
http://sapinsider.wispubs.com/Assets/Podcasts/2015/November/
Bill-Clerico-of-IBM-on-SAP-in-the-cloud
SAP in the Cloud: Leverage Cloud Computing to Foster

Innovation
IBM Distinguished Engineer Julie Schuneman on the journey to cloud
adoption and the importance of dreaming big and being bold in order to
make advancements in cloud
http://sapinsider.wispubs.com/Assets/Podcasts/2015/June/
Julie-Schuneman-SAP-in-the-Cloud-podcast

Appendix D
Articles
A Clear Path to Innovation with Platform as a Service:
Elevate Your Business with SAP HANA Cloud Platform
by Dan Kearnan, insiderPROFILES, Volume 6, Issue 4
http://sapinsider.wispubs.com/Assets/Articles/2015/October/IP-a-
clear-path-to-innovation-with-platform-as-a-service
Application Integration in a Cloud-Connected World:

Understanding Your Integration Options for Cloud, Mobile,
Hybrid, and IoT Scenarios
by Harald Nehring and Christoph Liebig, SAPinsider, Volume 16, Issue 4
http://sapinsider.wispubs.com/Assets/Articles/2015/October/SPI-
application-integration-in-a-cloud-connected-world
Ensuring a Secure Internet of Things: A Standards-Based

Approach with SAP HANA Cloud Platform
by Stefanie Garca Laule, SAPinsider, Volume 17, Issue 1
http://sapinsider.wispubs.com/Assets/Articles/2016/January/SPI-
ensuring-a-secure-Internet-of-Things
Build Value-Added Extensible HR Capabilities with

SAP HANA Cloud Platform
by David Ludlow, Aurelia Sousa, Jochen Nagel, insiderPROFILES, Volume
7, Issue 1
http://sapinsider.wispubs.com/Assets/Articles/2015/December/IP-
Build-Value-Added-Extensible-HR-Capabilities-with-SAP-HANA-
Cloud-Platform

Appendix D
Videos
Live from SAPinsider Studio: Jan Jackman of IBM on Digital
Reinvention
http://sapinsider.wispubs.com/Assets/Videos/2016/February/BI-
HANA-2016-IBMs-Jan-Jackman-on-Enterprise-Digitization
Live from SAPinsider Studio: Sanjay Das of IBM on Digital

Reinvention
http://sapinsider.wispubs.com/Assets/Videos/2016/March/BI-HANA-
2016-Sanjay-Das-of-IBM-on-digital-reinvention
Q&A Transcripts
Cloud Lessons Learned for SAP Applications and
SAP HANA: Q&A on Evaluating Cloud Cost Savings,
Speed, and Performance
http://sapinsider.wispubs.com/Assets/Q-and-As/2015/May/QA-with-
Burke-Gallego-Cloud-Lessons-Learned
Powering the Digital Transformation with SAP S/4HANA:

A Q&A on Why SAP S/4HANA
http://sapinsider.wispubs.com/Assets/Q-and-As/2015/September/
QA-with-IBM-on-S4HANA

Figure Index
Figure # Caption Page

Figure 1.1 Traditional three-tier applications versus 17
native SAP HANA applications
Figure 2.1 Hybrid scenario #1: Integrating systems of 25
engagement with systems of record
Figure 2.2 Hybrid scenario #2: Managing independent 26
workloads
Figure 2.3 Hybrid scenario #3: Serving as the cloud 27
service broker
Figure 2.4 Hybrid scenario #4: Accessing overflow 28
capacity
Figure 2.5 Hybrid cloud defined: A hybrid model is 29
the connection of one or more clouds to
on-premise systems and/or the connection of
one or more clouds to other clouds
Figure 2.6 Planned or unplanned, customers are finding 31
themselves leveraging public and private cloud
adoption to build hybrid landscapes
Figure 3.1 IBM surveyed over 800 cloud decision makers; 36
we categorized respondents organizations
into three groups based on their level of cloud
adoption and whether theyve reported seeing
competitive advantage from the cloud
Figure 3.2 For the majority of pacesetters, cloud is 37
integral to their mobile, social, and analytics
initiativesand the big data management
challenges that often come with them
Figure 3.3 The hallmarks of pacesetters: The cloud helps 39
fuel their competitive advantage through
strategic reinvention, better decisions, and
deeper collaboration

Figure Index

Figure 3.4 After understanding which role you would like 41
to take in adopting cloud, the next step is to
focus on your key business drivers for cloud
adoption; four examples are shown here
Figure 3.5 An example assessment: Evaluate key 42
dimensions of your operating model for gaps
so that you can optimize your adoption of
cloud
Figure 3.6 Four practical steps to adjust your operating 43
model for a move to the cloud
Figure 4.1 With an understanding of your cloud 50
drivers and inhibitors, you can begin your
organizations journey to become cloud
ready
Figure 4.2 IBMs four-step methodology to optimize IT 51
and get you ready for the cloud
Figure 4.3 An end-to-end hybrid cloud approach for 52
SAP customers
Figure 4.4 Customer benefits of moving SAP to the 53
cloud; further automation of SAP application
services increases service delivery quality and
significantly reduces provisioning times
Figure 4.5 An example cloud-based SAP implementation 54
project; by moving an on-premise
implementation to the cloud, this organization
accelerated its timeline by seven weeks
Figure 5.1 The IBM Cloud Managed Services Benefits 56
Estimator tool calculates the return you could
expect from moving to the cloud
Figure 5.2 In step one, the tool asks for your company 57
profile information

Figure Index

Figure 5.3 Customers select which SAP solutions they 58
want to move to the cloud
Figure 5.4 The tool seeks information about what, 59
specifically, the customer is looking to move
to the cloud
Figure 5.5 The example high-tech company rated itself 60
relatively low in time to market and customer
reach
Figure 5.6 The example high-tech companys TCO and IT 61
innovation ratings
Figure 5.7 The example high-tech companys high 62
availability and mid-to-low security ratings
Figure 5.8 Our second example, a mid-size North 63
American manufacturer
Figure 5.9 The manufacturer opts to move everything to 63
the cloud
Figure 5.10 Based on the manufacturers IT profile, it could 64
see over one-and-a-quarter million dollars in
annual savings from a move to the cloud
Figure 5.11 The manufacturer is slow to get things to 65
market, but has good customer reach
Figure 5.12 The manufacturer rates itself low in IT 66
innovation
Figure 5.13 The sample manufacturers empowerment 67
ratings
Figure 5.14 The resulting estimated annual savings for our 68
example North American manufacturer
Figure 5.15 Our third example is a giant global retailer 68
looking to move to SAP HANA
Figure 5.16 The retailer wants to move its entire SAP 69
landscape to the cloud

Figure Index

Figure 5.17 The retailer expects to see major savings from 69
moving its formidable SAP landscape to the
cloud
Figure 5.18 The retailer sports high time to market and 70
customer reach ratings
Figure 5.19 The global retailer has predictable IT 71
infrastructure expenses and moderate IT
innovation
Figure 5.20 The global retailers high-side empowerment 72
scores
Figure 6.1 A client-facing servicesuch as an internal 76
corporate portalcan include several
autonomous workloads with varying
characteristics
Figure 6.2 When assessing existing workloads for the 78
cloud, a workload point of view must consider
four key dimensions
Figure 6.3 Use a workload point of view to build and 80
manage an optimized and innovative portfolio
with evolving hybrid IT architecture
Figure 6.4 Dont forget to consider workload integration 82
points
Figure 7.1 An appliance delivery approach versus 92
SAP HANA tailored data center integration
Figure 7.2 SAP HANA pricing is based on t-shirt sizes 93
Figure 7.3 SAP HANA high availability: Performance- 97
optimized system replication
Figure 7.4 SAP HANA high availability: Cost-optimized 98
system replication (the recommended option)
Figure 7.5 IBMs standard process to support the 100
transition and transformation of SAP
environments and operation to the cloud

Figure Index

Figure 7.6 An effective migration plan allows customers 101
to exploit new SAP HANA capabilities
Figure 8.1 An overview of SAPs cloud application 103
portfolio
Figure 8.2 The capabilities of SAP S/4HANA Finance 105
Figure 8.3 In determining the right cloud mix for their 109
business, some companies may opt to move
all of their HCM processes to the cloud with
SAP SuccessFactors, and then integrate
thosecloud solutions with their on-premise
SAP ERP core
Figure 8.4 In a core hybrid model, HCM processes can be 109
split between SAPSuccessFactors (cloud) and
SAP ERP HCM (on premise)
Figure 8.5 A hybrid cloud model for HCM, in which 110
SAP SuccessFactors talent management
capabilities are integrated with SAP ERP HCM
and SAP ERP Financials
Figure 8.6 In a side-by-side approach, some employee- 111
facing HCM applications are deployed in the
cloud while other core HR processes (for
managers, for example) sit behind the firewall
with some cloud exposure
Figure 8.7 An overview of SAP ERP business processes 111
supported by SAPSuccessFactors Employee
Central integrations
Figure 8.8 SAP Cloud for Sales manages a sales 114
transaction from a customer expressing a
need all the way through to the purchase
Figure 8.9 A process overview of SAP Cloud for Service 115
Figure 8.10 SAPs overall analytics strategy 117

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Notes
Notes
Notes
SAP IN THE
CLOUD
AN EXECUTIVE GUIDE
SAP in the Cloud: An Executive Guide is the definitive resource for business and IT
leaders and managers who are responsible for establishing their organizations cloud
strategy for SAP solutions. If you are looking for a comprehensive introduction to, and
explanation of, SAP solutions for the cloud, youve come to the right place.
Get a comprehensive overview of Recognize the challenges of the

the cloud and how SAP products cloud, and learn what you can
and solutions work in it do to navigate your organization
around them
Walk through practical steps to
generate a business case for Explore cloud options for SAP HANA,
moving SAP solutions to the cloud as well as the next-generation SAP
S/4HANA suite, and determine
Dive deep into cloud sizing and
whether a cloud deployment is right
scaling considerations, as well
for your organization
as cloud deployment models
and options Learn how individual SAP products
for the ERP suite, including financials,
Understand the four levers you
HCM, SCM, and more, can be
can pull to create cloud ROI and
integrated with the cloud to increase
realize the economic benefits from
reach, expand customer access,
your investment in the cloud
improve data collection, and more
Brian Burke, IBM SAP Global Alliance Executive, has been responsible for
the IBM/SAP relationship for the last twenty-five years of his total thirty-five
years with IBM. Brian is the IBM SAP Alliance go-to-market leader for SAP
HANA, for both IBMs on-premise Power solution and IBMs cloud offerings
for SAP HANA in the United States. He has been involved in all aspects of
SAP projects, including infrastructure, software, and services.
insiderBOOKS is a new line of interactive eBooks from the publisher of SAPinsider. With insiderBOOKS, you
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BRIAN BURKE

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The team at insiderBOOKS has created a brand-new solution for the

insiderBOOKS is Reading Redefined.

Please visit our website for additional information:

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SAP in the Cloud

From the publisher of SAPinsider

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Copyright 2016 Wellesley Information Services. All rights reserved.

Published by Wellesley Information Services, LLC (WIS), 20 Carematrix Drive,

Publisher Lucy B. Swedberg

Although Wellesley Information Services uses reasonable care to produce

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Brian has spent significant time at SAPs headquarters in Walldorf,

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The insiderBOOKS team would like to thank the many contributors

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Foreword About This Book................................................................................13

Appendix A Benefits Estimator Metrics.............................................................127

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Foreword About This Book..................................................... 13

Chapter 1 Introduction: Why the Cloud?.............................. 15

Chapter 2 What Is the Cloud?................................................ 19

Chapter 3 The Business Case for the Cloud.........................33

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Chapter 5 Cloud Economics...................................................55

Chapter 6 Workload Analysis..................................................75

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Chapter 8 SAP Applications in the Cloud............................103

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Appendices ............................................................................... 127

Figure Index.............................................................................. 152

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About This Book

2016 insiderBOOKS. Reproduction prohibited. All rights reserved. 13

Introduction: Why the

2016 insiderBOOKS. Reproduction prohibited. All rights reserved. 15

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Application server UI rendering

DBMS Queries SAP HANA

Figure 1.1 Traditional three-tier applications versus native SAP HANA

2016 insiderBOOKS. Reproduction prohibited. All rights reserved. 17

18 2016 insiderBOOKS. Reproduction prohibited. All rights reserved.

What Is the Cloud?

Source: Study by Morgan Stanley (http://blog.hubspot.com/blog/tabid/6307/bid/24082/9-

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Eighty percent of all data is unstructured or semi-structured and is

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Enter, the Cloud

2016 insiderBOOKS. Reproduction prohibited. All rights reserved. 21

The Layers of Cloud Computing:

assets linked to a network. With IaaS, there is a cluster or clus-

Software as a service (SaaS). SaaS provides network-based

Platform as a service (PaaS). The line between PaaS and the

22 2016 insiderBOOKS. Reproduction prohibited. All rights reserved.

Private clouds can take advantage of the clouds efficiencies while

2016 insiderBOOKS. Reproduction prohibited. All rights reserved. 23

so much of this book will be devoted to discussing SAP solutions in a

Hybrid Cloud Use Cases

What Does a Hybrid Landscape Look Like?

24 2016 insiderBOOKS. Reproduction prohibited. All rights reserved.

A common scenario is when a company needs its systems of engage-