The cloud makes SAP ERP ready for take-off

The clock is ticking for the switch to SAP HANA technology. At the same time, many companies need to plan the migration of their IT systems to the cloud. It’s worth combining these two steps to take advantage of SAP S/4HANA and all the benefits of the cloud.

Operating the SAP landscape in the cloud has a lot of advantages on several different levels: infrastructure can be used with flexibility and services can be adapted at short notice; applications always work on state-of-the-art hardware in secure data centres. Services can be billed by the minute (pay-per-use). In addition, the company’s own personnel resources are spared, as the specialists at hyperscalers and service partners take care of the management and are thoroughly familiar with the constant stream of new innovations and services available in their cloud.

Hardware modernisation and security measures for the SAP system

The in-memory technology of SAP S/4HANA requires appropriately certified hardware to operate in its own data centre and is therefore incompatible with existing hardware. The on-premises switch to HANA is therefore only possible with new hardware. ‘Even with a smaller data centre, this not only means a large investment but also expensive installations, while the old systems still need to work productively for operational processes,’ says Omar Bumann, Head of Business Applications at Swisscom. There are also corresponding tests that need to be carried out for the applications as well as backups to the new hardware.

This will require significant investment and effort, says Omar Bumann. ‘And there’s also the certain knowledge that the hardware will last for a maximum of five years before it has to be renewed due to the development cycles or expanded or resized in the event of changes in the company. On-premises installations also involve complex security measures that require a great deal of expertise and a lot of staff. There are a lot of companies that invest a huge amount of resources in the security of their systems without ever reaching the security level of a hyperscaler. And all this without any real added value for the business,’ adds Omar Bumann.

All of this is completely different when SAP systems are used in the public cloud. This creates added value, as you can switch to new, more efficient and potentially cheaper hardware within the cloud at any time via lift & shift. ‘In addition, a change can be made in a few hours or days, whereas this can take several months with a company’s own hardware – especially since the delivery times for companies for the required servers are currently around 6 to 14 months longer than they were a few years ago,’ says Omar Bumann.

The advantages of the cloud in a nutshell:

Flexible operation

Cloud computing allows companies to remain flexible at all times, even when resource requirements fluctuate. Computing power and services can be scaled quickly even in more complex SAP systems with large changes in utilisation. New functionalities can be integrated within a short period of time without any need for installation. Thanks to the option for scaling, the system can grow or shrink with the business. Hybrid infrastructures can be used for operation as well as multi-cloud systems.

Maximum security in the cloud

Nowhere are IT systems better protected against data loss and cyberattacks than in the cloud. Hyperscalers work with state-of-the-art firewalls, strong data encryption systems and geo-redundant data centres. This enables them to guarantee smooth operation and a high level of data protection at all times.  

Cost efficiency

Thanks to simple scalability and the pay-per-use model, cloud operations don’t need to purchase and maintain a stock of infrastructure. The company is also not at the mercy of the current price increases on the free electricity market and does not have to protect its operations with its own UPS systems. Both Microsoft Azure and AWS offer the very best conditions in their European data centres (Regio Nord) – including maximum security and performance. The prerequisite for this is an ExpressRoute or a redundant VPN connection to Switzerland, which can be provided by the service partner or provider.

Myths: Performance and data protection

HANA technology offers the best possible performance for processing large volumes of data. ‘Many of our customers fear performance limitations when migrating to the cloud. But experience has shown that these fears are not founded in reality,’ says Omar Bumann. For example, a customer based in Switzerland migrated its CRM – which had long been its problem child – from a data centre in the Zurich area to the Azure cloud based in Ireland. ‘Today, the customer is very satisfied with its CRM, which has never worked as well and with as good a performance as it does now in the cloud.’

Bumann also puts concerns about data protection and data security into perspective. Even organisations with special security requirements, such as insurance companies, banks and healthcare companies, can rely on the public cloud. ‘One of our customers – an insurance company – has outsourced its main cloud load to Ireland. Because they create a backup in Switzerland every night, the solution is FINMA-compliant, cost-effective and secure,’ says Bumann.

Specialists help to optimise cloud usage

Switching to the cloud significantly reduces the workload of internal IT employees. Particularly in the current era of skilled labour shortages, these specialists are now able to focus more on their tasks and on further developing the business or systems. But it is precisely the SAP systems in the cloud that require professional management. Adjustments have to be made all the time – when new services become available, for example, or when processes change within the company, SLAs need to be updated or new locations need to be integrated. ‘When the hyperscaler offers new features that can optimise operations or make them more cost-effective, you shouldn’t wait,’ explains Omar Bumann. ‘But many companies aren’t focused on the regular monitoring of their cloud services, or they are faced with the challenge of correctly and efficiently interpreting the diagnostic tools required for optimal cloud operation.’

Regularly and correctly managing cloud services saves money. Extensive scaling options, such as those used in the event of an increase in data volume, can save a lot of money by changing the backup medium in good time. ‘However, this requires a constant awareness of the current options available to the cloud provider.’ This is why the service partner plays such a crucial role. Its specialists manage its customers’ systems and are thoroughly familiar with the current conditions of hyperscalers such as Microsoft Azure and AWS, which helps to ensure the optimal use of cloud infrastructures. What’s more, in times of skilled labour shortages, it is difficult for many companies to provide all the relevant skills in house. Outsourcing operational responsibility for cloud management to a partner also saves human resources.

Migration to the cloud first, followed by transformation to SAP S/4HANA

A lot of companies have two major projects ahead of them: the switch to SAP S/4HANA and migration to the cloud. ‘If a company has to switch to HANA technology in the near future and is already planning to switch to the cloud, the greatest benefits can be achieved by combining these two steps,’ says Omar Bumann. After all, carrying out the transition in two separate, staggered steps clearly requires more resources, which hardly any company is able or willing to invest in today’s climate. The following approach is recommended: After moving to the cloud, the SAP systems are ready for an easy S/4HANA transformation. SAP S/4HANA will then be able to harness the huge innovative power of the constant stream of new services and features added by the public cloud providers, creating the ideal conditions even for complex applications with large amounts of data, artificial intelligence or the IoT.