The last couple of months I have been getting more and more questions about SAP&'s cloud strategy. Some were really specific: "can we run SAP on Amazon?", others were a bit more high-level: "what does SAP offer on cloud computing".
In fact, SAP has a cloud strategy and is actually providing cloud based offerings. In this blog post I will give a quick overview of SAP&'s cloud offerings and from there shed some light on SAP&'s cloud strategy.
As there are several offerings in SAP portfolio, I will use the NIST draft cloud computing service model definition to structure the discussion of SAP&'s offerings. The NIST describes three Service Models:
- Cloud Software as a Service (SaaS): customers are offered a complete (business) application they can use;
- Cloud Platform as a Service (PaaS): customers are offered a platform on which they can deploy their own developed applications;
- Cloud Infrastructure as a Service (IaaS): customers are offered virtualized infrastructure components such as servers, network components and storage.
For each offering I will provide a short description of the service and the main business drivers for choosing the particular offering.
SAP & Cloud Infrastructure as a Service
When considering Cloud Infrastructure as a Service, SAP&'s offering is simple: SAP does not provide IaaS, however does support running SAP business applications (such as SAP ERP or SAP CRM) on cloud based infrastructure. Let me repeat this one:
SAP supports running their business applications on cloud based infrastructure.
This is actually quite major. It means that SAP&'s ‘big&' business applications that are typically run on premise can now be run from services such as Amazon Web Services (in particular, SAP offers useful guidelines on running SAP on Amazon Web Services). The advantages a many fold. Just to name a few:
- Applications that are only used on specific time frames (i.e. development or training systems) can be shut down when not in use, which is a cost saver if you only have to pay for running systems;
- Projects can make a head start with systems that can be provisioned within hours. Transition to definitive infrastructure can be done at a later time;
- Additional computational power can be provisioned in times when high load is expected or experienced. When not required any longer, the additional power can be de-provisioned.
SAP & Cloud Software as a Service
SAP is providing several business applications they are offering as a SaaS solution.
The first offering is SAP Business ByDesign. SAP Business ByDesign is a complete integrated ERP application based on the well know SAP ERP (part of SAP Business Suite) environment. It offers many of the same functionality of which a lot is already preconfigured. It however does not contain the same amount of flexibility or adaptability of it&'s big SAP ERP cousin. Therefore it is typically not a substitute for SAP ERP for organizations that are currently using SAP&'s big ERP application. That of course cannot be expected and is not what SAP Business ByDesign. SAP Business ByDesign is focused on small- to medium sized companies that require ERP process support, but cannot afford to spend a year on an ERP implementation. SAP also targets subsidiaries of customers with Business ByDesign as an alternative to a complete ERP roll-out. Note: this however does imply that SAP should solve the missing link in the on demand strategy: integration between their on premise and on demand applications.
The second SAP SaaS offering is line-of-business solutions, such as SAP Carbon Impact, SAP Business Objects BI OnDemand, SAP Sales and SAP Sourcing. These applications typically provide a complete business process "out of the box" with very little configuration required (or possible). The fact that these solutions are very focused is a two sided sword: on one hand they can be used almost instantaneously meaning immediate business benefits. On the other hand, the solution either serve your business needs or they won&'t. Also, a readily available solution to integrate between both these line-of-business solutions as well as with Business ByDesign and the SAP Business Suite applications is not yet available.
The final SAP SaaS solution is SAP StreamWork. This is a (free!) online collaboration platform targeted to the business users. A lot of focus is on being able to collaborate on projects, make decisions, plan work, hold meetings, brainstorm, etc. It&'s functionality is expanded over time with an ever increasing list of plug-ins. If you are looking for an online collaboration platform, it is definitely one to investigate.
SAP & Cloud Platform as a Service
This one for me is the big question mark. Unlike for instance SalesForce.com (which offers it&'s force.com platform PaaS), SAP has not yet released a cloud based platform to which customers can deploy their own applications. The value of providing such a platform where customers deploy their own applications that can interact with other SAP solutions would be pretty awesome. SAP could even provide an "App Shop".
When discussing SAP and PaaS, we do hear the word ‘River&' whispered in this respect. Unfortunately, to me SAP&'s PaaS strategy is still unknown. BTW if you know something I don&'t, let me know!
SAP currently provides solutions for two of three cloud service models (IaaS and SaaS). My expectation is that SAP will increase the number of cloud offerings in the coming months. I also expect them to be able to deliver business value to their customers with their cloud strategy.
That said, in my opinion SAP does have two big challenges:
- Integration between the cloud based offerings and the (on premise) SAP Business Suite applications, both on a data as well as on process;
- Provide a platform to which customers can deploy their own applications that can interact with SAP&'s other solutions.
(Please note that SAP will need to have solved challenge number 1 before they can get all the value from an SAP on demand application platform).
So there you have it. SAP&'s cloud offerings. And now I want to know from you. Are you running SAP on cloud infrastructure? Are you using SAP cloud based applications? If so, which ones? How are you integrating them into your application landscape?