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Public clouds woo SAP apps to win the heart of enterprise IT

The three big public cloud companies, AWS, Microsoft and Google, continue to extend olive branches to SAP and maybe win the big customer spending that comes with ERP software.

The three biggest cloud providers have buddied up to SAP as they seek to bring the crown jewels of enterprise IT into their massive data centers.

Amazon Web Services (AWS), Google Cloud Platform (GCP) and Microsoft Azure have all publicly lauded the German ERP software maker as they compete to win workloads that remain largely on premises. It's a huge opportunity for public cloud providers -- it not only signifies trust in handling sensitive enterprise data, but also because ERP apps are among the most complicated and expensive apps in corporate IT.

Each vendor made its case for migrating SAP apps this month to coincide with SAP's major customer event, called Sapphire:

  • AWS added SAP HANA clusters with up to 17 nodes, expanded its memory-intensive X1 instance family, and -- in an unusual step -- divulged some of its roadmap plans to add 16 terabyte instances to accommodate SAP applications.
  • Microsoft added a new M-Series VM to support single-node configurations of up to 3.5 terabytes of memory. It also added support for SAP Cloud Platform, SAP's platform as a service, and large instances with up to 20 terabytes of memory for software such as SAP S/4HANA that current hypervisors can't handle.
  • Google, the last of the trio to add SAP support, extended a partnership from earlier this year to allow SAP to act as a data custodian on GCP and integration with productivity tools in G Suite. The move also indicates GCP's maturation and shift to the enterprise market.

SAP apps typically are not in the vanguard of cloud migration because they are often tightly coupled with other enterprise systems. That data gravity makes them attractive to these public cloud providers.

"If everything is going to the cloud then it becomes an easier decision," said Wes Mauer, director of SAP operations at TriCore Solutions, an enterprise application management company in Norwell, Mass. "If you have split workloads on prem and production, you really need to weigh that carefully."

It often takes what Mauer described as a "compelling event" to move SAP apps to the cloud. An enterprise might determine that SAP HANA doesn't have the space to accommodate an instance that requires 256 gigabytes of memory, so they'll either go with an appliance or migrate to the cloud.

Enterprises weigh ERP in the cloud

When Michael Ross joined Australian manufacturer Pact Group as CIO in 2013, it had multiple Exchange servers, an older version of SAP and half the company's 2,000 users still on Windows 95. Since then, there's been a concerted effort to update the company's IT infrastructure, at first with Office 365 and eventually a full shift to Azure, he said.

Production applications, including SAP, were the last to be moved to the cloud in April 2016 after several months of tests with disaster recovery and test environments. The company felt comfortable with Microsoft's security enhancements and assurances they'd comply with data sovereignty rules with a recently opened Azure data center in Australia.

It's the heartbeat of organization ... If you can convince someone to move [ERP apps] across, the rest of the workload[s] will come across, too.
Michael RossCIO, Pact Group

Pact Group, which went with a single-cloud strategy to ease the transition, can have more than 1,000 concurrent users in SAP for purchasing, manufacturing, dispatching and financials tasks. The decision to move those final pieces to the cloud wasn't made lightly, but the SAP transition underscores the company's trust of Azure with its data.

"It's the heartbeat of organization," Ross said. "If you can convince someone to move [ERP apps] across, the rest of the workload[s] will come across, too."

Moving SAP workloads to the cloud won't make sense for every company, such as those with significant ongoing on-premises investments. But Pact Group has a small IT team and felt Microsoft could better handle data center operations and the rate of change with threat detection than they could internally, Ross said.

Rackspace, which has shifted from competing with the likes of AWS to managed support for public clouds, agreed this week to acquire TriCore, in part because of this trend of small to medium-sized enterprises offloading management software from Oracle, SAP and others. An internal survey of Rackspace customers found 71% still run their ERP software inside their corporate data centers, and more than 40% want to move those workloads to hosted private cloud or public cloud in the next two years.

Another reason cloud providers are so keen on SAP apps is because the German company has turned to partners rather than build its own infrastructure as a service (IaaS) cloud. That's in contrast to Oracle, another major ERP provider, which recently doubled down on its own IaaS offering and raised the cost of operating its databases on AWS and Azure. Oracle is not yet supported on GCP.

Large-scale SAP migrations still far from commonplace

Despite the efforts of public cloud providers, their platforms still aren't the best place for large, monolithic applications, said Ted Chamberlin, an analyst at Gartner.

"The way a lot of these ERP systems [work], from kernel on up, they're very dependent architectures that are not containerized and you can't break them apart into single functions," he said.

Some pieces of the ERP supply chain, such as databases, business warehouses and mobile components, can move to the public cloud, to give enterprises more elasticity and agility, but the core processing is still dependent on functions within the code that can't move, he said.

Another issue is that public cloud providers tend to focus on cloud-native applications, and not legacy technology. The major public cloud providers have begun to offer managed database services, but there are few indications they're ready for the type of application management required with something like SAP.

"Once you put anything in the cloud, someone still has to manage it, and most enterprises want to get out of managing ERP systems," Chamberlin said. "AWS has talked about managed services and managed ops, but not managed apps. None of these guys can or will manage apps."

It may take five years or more before large, global ERP workloads are run fully distributed on the public cloud, Chamberlin said. But once the large public cloud providers figure out how to make that case -- either by containerizing or with machines with massive amount of cores -- "it's game over," he said.

Trevor Jones is a news writer with SearchCloudComputing and SearchAWS. Contact him at [email protected].

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