How SAP Customers are Accelerating ROI and Innovation in the Cloud

By Fred Donovan, Senior Editor, SAPinsider and Rizal Ahmed, Chief Research Officer, SAPinsider

Key Takeaways

• Hyperscalers provide the best bang for the buck by reducing costs, increasing flexibility, enabling innovations, and turbo-charging SAP performance.
• Companies moving to hyperscaler cloud providers are seeing savings of 25% to 30% in monthly operational support costs with accompanied performance increases of six to eight times faster than on-premise systems.
• When moving to the cloud, firms should make sure that costs are managed, and security is robust.

Over the last few years, SAP customers have been migrating SAP and other critical enterprise application workloads to the cloud before they upgrade to SAP S/4HANA, says Frank Powell, President, Managecore.

By moving to the cloud, SAP customers want to first address their pressing business concerns, such as cost containment and performance, and then they are able to focus on further modernization.

“We thought customers would want to move to SAP S/4HANA, but what we saw were people wanting to move to the cloud as step one to reduce ongoing costs resulting in making their IT infrastructure nimbler. Once we got them into the cloud, they then had opportunities to continue to innovate,” he says.

“What Managecore provides to our customers are building blocks and stability of one of their most important ERP assets – their SAP system. When it comes to your core SAP systems, we ensure that they are not only stable and secure but flexible. Having a solid foundation is then a catalyst to open the port to innovation for the business,” Powell explains.

Why SAP Customers Are Choosing Hyperscalers as their Cloud of Choice

Many of Managecore’s customers are choosing hyperscalers, like AWS, Google Cloud, and Microsoft Azure, when they move to the cloud. The private cloud vendors cannot keep up with the pace of innovation, Powell says.

“Hyperscalers are the place to be for SAP workloads. In fact, many of our customers are not only moving their entire SAP landscapes to the cloud but all of their enterprise applications and exiting the data center commitment altogether. That is the biggest bang for the buck,” he adds. Getting set up in the hyperscaler environment can be quick, allowing both business and IT teams to realize value from their new environment in days and months, not years.

Time to value is  essential in today’s fast-paced market, Powell explains that Managecore performed a “lift and shift” project of around 30 SAP servers from a private cloud to Google Cloud, which took about nine weeks allowing the customer to swiftly move to the cloud without disruption to their business For another customer, his firm helped migrate around eight different SAP products from Oracle on IBM equipment to Linux running SAP HANA, which took six months resulting in better performance and enhanced capabilities offered in the new HANA landscape

Managecore customers that are choosing the cloud are experiencing savings of 25% to 30% in monthly operational support costs and performance increases of six to eight times faster than on-premise systems.

Powell relates that Managecore moved one of its customers, a Texas-based industrial products distributor, from a private cloud to Google Cloud. They consolidated multiple data centers into a single data center environment and as s a result, the company saw “huge performance gains across the board.”

“Now when our customers go to the cloud they are immediately on the latest, greatest processor technology. They can scale up and down very quickly. And ultimately the performance gains have an immediate impact on their entire organization,” Powell says.

Managecore also works with SAP customers to ensure that, once they move to the cloud, they are operating in a secure environment. While the cloud providers have robust security measures for their facilities, the customers need to manage their side of the security equation, he notes.

Navigate Cloud Computing Costs Models and Optimize ROI

Powell explains that the cost models of cloud providers are also different, so a company’s internal  IT team needs to be familiar with the cost structure of each hosting provider. For example, under a consumption model, a company gets billed for cloud usage every month.

So, it is important to manage cloud consumption on an ongoing basis. This is something Managecore is an expert at and can provide proactive support to customers, “If you’re not watching cloud usage, the costs can run out of control quickly,” he cautions.

Another customer, a distributor of flu vaccines in North America, was able to stabilize its SAP systems, gain flexibility, reduce costs, and use data analytics because of moving to the cloud with Managecore’s help.

Having a skilled managed service provider in place allows companies to lower cause and get a faster ROI from their cloud investment. This shift in resources also allows our customers to do higher-level things. such as work on the next innovative project that’s coming down the pipe. Some are working on developing the SAP S/4HANA migration path and talking with SAP and their internal business units to figure out what the impact is going to be and how to take advantage of their SAP investment for the long-term,” Powell concludes.

What Does This Mean for SAPinsiders?

• Be more aggressive with your cloud pilots. Most organizations have some applications in the cloud today and are increasing their investment in the near future. Our recent SAPinsider SAP S/4HANA Deployment research showed that nearly 70 percent of respondents plan to run SAP S/4HANA in some type of cloud environment. Expand your testing and real-world evaluation so that you can gain skills and understand different opportunities that the cloud has to offer.
• Expand your knowledge on the breadth of hyperscaler offerings. Many customers think the hyperscalers are only good for supporting existing application workloads. Many have rapidly expanded their functionality to include analytics, AI, data lakes, Blockchain, and a host of other services. Make sure you fully understand where and how you can tap into these offerings. It will significantly impact your ROI models and your company’s ability to deploy new functionality and innovation.
• Get your cloud economics degree. Because cloud providers often charge based on consumption, costs can get out of control quickly. Make sure your team is up to speed on how to manage usage, and what factors can quickly drive up your monthly fees. Engage with providers and experts from organizations such as Managecore to help guide you.

About Managecore

Headquarters: Franklin, Wisconsin

Company Details: Managecore is a leading provider of SAP technical managed services for both on-premise and cloud environments. The company also offers SAP HANA transformations, cloud solutions, and SAP Basis Managed Services.