What to Expect When Starting Your Journey to SAP on Iaas

White Paper What to Expect When Starting Your Journey to SAP on IaaS

Sponsored by: Amazon Web Services (AWS) Peter Rutten September 2020

IDC OPINION

SAP is urging its customers to upgrade to SAP HANA and SAP S/4HANA on a priority basis. At the same time, SAP is building out broad partnerships with cloud service providers (SPs) to provide its solutions on certified IaaS, indicating that a significant movement of SAP workloads to the cloud is in motion.

Businesses, small and large, are planning and implementing cloud migration roadmaps that can be as straightforward as spinning up a small greenfield S/4HANA environment or as complex as moving a large, customized SAP landscape as a brownfield-greenfield combination into a hybrid cloud model. The former can potentially be achieved in less than a week, while the latter could entail a multiyear, multistage project. Further:

▪ For businesses that are on this journey or have completed it, the public cloud itself as a destination is no longer an unknown deployment location in the overall migration equation. The public cloud is widely seen as a more than suitable and trusted location for enterprise- class, mission-critical SAP applications. ▪ For businesses that are about to embark on this journey, IDC has set out to collect a broad set of data, based on an international survey, that provides a measure with regard to the various aspects involved with moving SAP workloads to an IaaS destination at a public cloud service provider. We believe that this data will be useful for businesses to determine for themselves what such a journey would mean for them. Using web-based primary research (see the Methodology section), IDC also looked at how AWS performs within the industry and found that AWS is very well perceived on multiple important dimensions with regard to IaaS for SAP workloads.

September 2020, IDC #US46789720 SITUATION OVERVIEW

How Businesses Experience Their SAP Landscape Migration to the Cloud For businesses that are planning to migrate part or all of their SAP landscapes to the cloud, there are many questions and very few data points to help them make informed decisions. The size and specifics of an SAP landscape will differ from company to company, and the cloud migration planning and implementation strategy will depend on business-specific variables. As shown in Figure 1, there are three areas where businesses would benefit from data to help them understand expected outcomes.

FIGURE 1

Three-Phased Experience of SAP Migration to the Cloud

The Destination The Results The Process (The (The perceived (The migration characteristics of improvements process itself — a typical SAP on with SAP on IaaS timing, types of IaaS landscape — — benefits, migration, and nature, size, and metrics, and hurdles) cost) satisfaction levels)

Source: IDC, 2020

IDC set out to provide the data around these three themes by asking 600 organizations worldwide about their experiences with migrating SAP to the cloud. Their responses will provide businesses that are at the beginning of this journey with data to measure their own migrations against. The Process For many businesses, the most logical migration process is to move from SAP ERP with "AnyDB" on NetWeaver to SAP Business Suite on the SAP HANA database first and then migrate to S/4HANA. The sections that follow look at the time frames for these steps. How Urgent Is a Move from "AnyDB" to SAP HANA? Many businesses still run their SAP landscapes on non-HANA databases. SAP has extended the deadline for the end of support for non-HANA databases from 2025 to 2027, but IDC found that on average, businesses expect to switch to SAP HANA in the next 1.9 years, either on premises or on IaaS. Only 1.8% of businesses will come close to the 2027 deadline or fail to meet it.

©2020 IDC #US46789720 2 How Fast Are Businesses Moving to the Cloud for SAP HANA, and How Long Does It Take? Of the businesses that are already running SAP HANA, the majority (56%) expect to migrate their SAP HANA databases to IaaS in one year, while 22% will do so in two years. The rest need more time. On average, businesses expect to migrate their SAP HANA databases to IaaS in 1.9 years, with smaller companies going slightly faster (1.7 years) than large corporations (2.0 years). This time frame is slightly more aggressive than the switch to SAP HANA or S/4HANA — most businesses want to be on IaaS in a year, two years at most.

The time required to plan for the migration of the SAP HANA production system, meaning the organizational and technical preparation, and then implement it is 11.6 months on average. Future IaaS customers slightly underestimate the time this takes by about two months compared with current IaaS customers that have gone through the process, so migration planners should expect some timing overruns. For the largest companies, the planning and implementation takes 12.4 months versus 10.8 for the smallest. For a small percentage (15.4%) of companies, the process takes 18 months or longer — these typically are businesses with very complex landscapes. How Soon Are Businesses Moving to the Cloud for S/4HANA, and How Long Does It Take? Businesses say they aim to migrate their S/4HANA from on premises to IaaS in 1.9 years, with the smallest companies expecting 1.5 years and the largest 2.2 years. 59% expect to migrate in a year, 21% in two years, and the rest say they require more time.

The average time to plan and implement the migration of the S/4HANA production system to the IaaS destination is 11.7 months; 12.4 months for largest companies and 11.0 months for the smallest companies. For 14.9% of organizations, this takes longer than 18 months. These may be organizations with a diversity of ERP solutions that they are consolidating under one S/4HANA umbrella in the cloud.

Of all the S/4HANA installations on IaaS, 81.4% of installations represent a migration from an existing on-premises production system, while 18.7% of installations are a greenfield installation. Smaller companies have a larger percentage of greenfield installations (20.4%). What this tells us is that businesses are not concerned about migrating a production system to the cloud. What Stage Are Businesses in with Their S/4HANA Strategy? As to where businesses are with their S/4HANA on IaaS strategy, 64% of respondents have not reached the proof-of-concept (POC) stage yet and only 6% are in production. By company size, 55% of the smallest companies have not reached the POC stage yet, while 80.9% of larger businesses are not there yet. Among the very largest companies, 60.9% have not entered the POC stage. Clearly, it is still early days for most organizations, and businesses need not worry that they might be behind their competition with moving to S/4HANA in the cloud.

As to the type of IaaS provider, businesses run their POC on, many say they find it very important that a provider allow them to shut their SAP infrastructure on IaaS down after a POC without incurring any further cost. They also say that they find it important to be able to use SAP Cloud Platform as an interoperability layer on the IaaS provider's cloud they select. SAP Cloud Platform is an open standards–based platform as a service that includes SAP HANA and connects to on-premises and cloud-based systems running SAP or third-party software. And with regard to where they ultimately

©2020 IDC #US46789720 3 place their SAP workloads, businesses say they find it very important to have the opportunity to leverage purpose-built IaaS for SAP rather than generic IaaS infrastructure. Are They Migrating an Existing On-Premises S/4HANA Production System to IaaS or Executing a Greenfield Installation? Figure 2 shows the biggest drivers for migration of the existing on-premises S/4HANA production system to IaaS. The top 3 drivers are the desire to continue using existing elements of the SAP landscape (33.7%), a preference for gradual investment (32.3%), and the existence of third-party interfaces (28%). Seasonality preventing a potentially disruptive migration is not a major concern and neither is the cost of a greenfield installation.

FIGURE 2

Drivers for Migration of the Existing On-Premises S/4HANA Production System to IaaS

We want to continue using existing elements of 33.7 the SAP landscape We prefer gradual investment to secure 32.3 existing investments Some of our systems interface with third 28.0 parties — we cannot just overhaul them

Our SAP landscape is too large and complex 27.1

We have too much custom code 26.8

We don't want to disrupt existing business 25.5 processes The infrastructure implications of greenfield 24.8 are too daunting Greenfield is too expensive — a brownfield 21.6 approach requires less budget We don't have enough seasonality to disrupt 17.4 business

0 10 20 30 40

(% of respondents)

Source: IDC, 2020

The three biggest drivers for a greenfield S/4HANA installation on IaaS are faster innovation (45%), faster completion (42%), and simplification (39%). Among the smallest companies, a complete reengineering of their SAP landscape is also an important driver (35%). Few businesses said that they would choose greenfield because they do not have much custom code or because their SAP landscape is simple enough, nor do many believe that greenfield would deliver a lower TCO.

©2020 IDC #US46789720 4 What Hurdles Do Businesses Encounter When Implementing S/4HANA on IaaS? It is important to note that the hurdles that businesses experience during the migration process are primarily around unmet expectations. Figure 3 shows the hurdles businesses say they experienced with implementing S/4HANA on IaaS, with the three largest being unanticipated complexity (39%), time required (36%), and cost (31.3%). It is safe to assume that businesses that are starting this process will also be inclined to underestimate these aspects, and they should therefore allow for a potentially longer, more complex, and ultimately, costlier process. Only 7.1% said they did not face any hurdles.

FIGURE 3

Biggest Hurdles with Implementing S/4HANA on IaaS

It is much more complex than we anticipated 39.0

It takes much longer than we anticipated 36.0

It is much more expensive than we anticipated 31.3

The risk is high because an S/4HANA 27.8 implementation on IaaS is irreversible The IaaS provider is not providing (much) 27.2 technologies to speed the process up

It requires skill sets we do not have 24.3

The IaaS provider is not providing (much) 24.1 support

We did not face any hurdles 7.1

0 5 10 15 20 25 30 35 40 45 (% of respondents)

Source: IDC, 2020

As to how difficult it is to plan the infrastructure for the S/4HANA workload on IaaS, 77.2% say it is easy, while 22% found it not easy and say it requires a lot of time-consuming planning. How Widespread Is the Use of Third-Party Consulting? Given the previously mentioned hurdles, organizations often decide to partner with professional services firms for support. The partners that businesses most often select for an S/4HANA on IaaS deployment are global systems integrators (44.6%), systems integrators (31.9%), and managed SPs (20.1%). Very few businesses use born-in-the-cloud (BITC) partners (3.4%). According to 75.3% of organizations, it helps if such a partner has been endorsed by the IaaS provider, which some do, providing them with a sense of confidence in the capabilities of the consulting firm.

©2020 IDC #US46789720 5 Which Are the Top IaaS Providers? IDC does not provide comparative rankings between competing vendors in an industry in white papers, such as this one, but it is fair to say that the four most prominent cloud service providers for SAP are, alphabetically, AWS, Azure, Google, and IBM. Once businesses have made a choice, most of them tend to remain very loyal to their IaaS provider for SAP, with only 6.1% saying that they are planning to move SAP HANA from their main IaaS provider for SAP to another provider in the future. This attests to the level of satisfaction that businesses have with the provider they selected; we discuss satisfaction ratings in the How Satisfied Are Businesses with Their SAP on IaaS Services? section. The Destination What Is the Typical Memory Size of an SAP Landscape on IaaS? The average memory requirement for the production instances is 12.2TiB (1TiB is approximately 1.1TB). The smallest companies require 10.2TiB and the largest 13.3TiB. Future IaaS users may be slightly underestimating their memory requirements — they think they will need 11.4TiB, while current users actually have 13TiB on average. Among businesses, 18.5% use more than 16TiB including 5.1% (of all respondents) that exceed 20TiB. Virtualized or Bare Metal? Virtualization is the preferred approach for many businesses; 67.4% say that they run S/4HANA in a virtualized environment on IaaS, while 18.1% use bare metal and 14.6% run on software-defined (SWD) bare metal. More of the largest companies run on virtualized environments (72.3%) than the smallest companies (63.3%). The latter have a high percentage of SWD bare metal use (19.4%). Future IaaS users (24.8%) expect to leverage bare metal significantly more than current users do (15.4%).

The elasticity of a bare metal environment is an important consideration. For those businesses that are using bare metal, the satisfaction rates with the cloud elasticity of the bare metal environment is, on average, decent (3.74 on a scale of 1–5), but the larger and largest businesses rate the elasticity lower (3.55).

Also important is the ability to move from a virtualized environment to a bare metal or software-defined bare metal environment, which 85.3% of businesses say they find relatively easy and seamless on their IaaS for SAP provider. Among the smallest companies, this percentage is lower (80.6%). For 13.9% of businesses, the process of moving from a virtualized environment is not easy at all and requires a different architecture.

Quite a few organizations also expect that their bare metal instances will be able to participate in the same virtual private network (VPN) as the virtual instances — 60.1% of organizations say they expect this to be available. Especially, small companies are looking for this (66.1%), while the largest companies view this option to a lesser degree (51.1%). What Do Businesses Pay for Running SAP on IaaS? Cost is typically a major driver for migrating to the cloud. On average, businesses report that the companywide annual infrastructure cost for running SAP on an IaaS provider is $2.1 million. The differences by company size are significant: smallest ($565,000), midsize ($1.8 million), larger ($2 million), and largest companies ($3.7 million). In the section that follows, we see that

©2020 IDC #US46789720 6 most businesses have seen a cost improvement compared with their on-premises deployment of SAP. Figure 4 shows the annual companywide cost for running SAP on IaaS across all users.

FIGURE 4

Companywide Annual Infrastructure Cost for Running SAP on the IaaS Provider

<$100,000 3.5 $100,000–200,000 8.2 $200,001–400,000 15.5 $400,001–800,000 17.6 $800,001–1,600,000 26.3 $1,600,001–3,200,000 14.6 $3,200,001–6,400,000 6.9 $6,400,001–12,800,000 4.5 $12,800,001–25,600,000 1.4 >$25,600,000 0.8 Don't know 0.6

0 5 10 15 20 25 30 (% of respondents)

Source: IDC, 2020

What Are the Expected Incremental Costs When Scaling? Since one of the major benefits of the cloud is the ability to scale quickly and with few limitations, it is useful to understand the incremental cost increases that businesses expect when scaling their SAP landscapes on IaaS. We tested this for two categories:

▪ Memory. When asked how they expect their costs to increase if they were to double their memory requirements for scaling their S/4HANA IaaS infrastructure, organizations said, on average, that they anticipated the cost to increase by 59.2%. Only 17% thought their cost would double or more, while 24.3% expected a 75% increase. ▪ Compute. The expected average additional cost for scaling S/4HANA IaaS infrastructure by doubling the compute was 60.5%, with the smallest companies expecting slightly more (62.6%) and the largest slightly less (58.4%). Slightly less than one-fifth (19.7%) anticipate that their cost will double or more if they double the compute, while 22.6% think the increase will be about 75%. The Results What Are the Benefits Businesses Have Ultimately Seen from Running S/4HANA on IaaS? Once businesses have deployed S/4HANA on IaaS, they are experiencing a range of benefits as shown in Figure 5. The top benefit is greater security (36.9%), which shows how much progress IaaS providers have made on this front as not too long ago security was deemed an on-premises advantage.

©2020 IDC #US46789720 7 Additional top benefits are higher-performance infrastructure (35.6%) and greater scalability (33.6%). Lower capex (17%) and lower opex (19.8%) rank relatively low, which indicates that for most businesses, the other benefits have greater weight. The smallest companies rank opex benefits somewhat higher (25.5%).

FIGURE 5

Biggest Benefits from Implementing S/4HANA on IaaS

Greater security 36.9

Higher-performance infrastructure 35.6

Greater scalability 33.6

Greater flexibility 33.4

Better availability 32.5

Better analytics capability 30.8

Faster provisioning 27.6

Easier integration with IoT 27.1

Better integration of various parts of our SAP landscape 26.3

Better transactional capability 25.0

Better integration with our data lake 23.1

Lower opex 19.8

Lower capex 17.0

0 5 10 15 20 25 30 35 40

(% of respondents)

Source: IDC, 2020

Businesses report a variety of additional improvements from running their SAP workloads on IaaS:

▪ Productivity. In terms of productivity, 54.5% of organizations say they see a significant improvement from running their SAP workloads on an IaaS provider versus on premises, while 32.7% see a modest productivity improvement. Only 12.8% of organizations see no improvement at all.

©2020 IDC #US46789720 8 ▪ Revenue. Revenue improvements from running SAP workloads on an IaaS provider versus on premises are also reported widely, with 51.9% of businesses saying they see a significant revenue improvement, 38.6% seeing a modest revenue improvement, and just 9.5% saying they have not seen any improvement. The smallest companies in particular see significant revenue improvement (53.7%). ▪ Cost. Cost benefits from running SAP workloads on an IaaS provider versus on premises are generally somewhat lower, with 39.3% seeing a significant improvement, 46.3% experiencing a modest improvement, and 14.4% reporting no cost improvement. More of the larger companies see a significant cost improvement (43.9%) than other company sizes — the smallest companies see the least (33.1%). How Do On-Premises SAP Infrastructure and Purpose-Built IaaS for SAP Compare? For businesses that are contemplating a move to purpose-built IaaS for SAP, it is useful to compare how organizations that went through this migration say they have fared compared with their on- premises environment. IDC therefore looked closer at four important dimensions of moving SAP workloads from on premises to IaaS — cost, agility, performance, and disaster recovery — and what the differences are that organizations experience on those dimensions. In detail:

▪ Cost. In line with the previously described low-ranking opex and capex benefits that businesses said they experience, the reported cost differences, for both capex and opex, between the on-premises infrastructure and the purpose-built IaaS for SAP are, on average, small — IaaS is on average 0.5% more costly. However, this average cost difference consists of a somewhat symmetrical distribution of, on the one hand, businesses that report cost decreases and, on the other hand, business that see increases. A cost decrease of 20% or more is experienced by 32.4% of organizations, while a cost increase of 20% or more is reported by 34.9%. ▪ Agility. Agility is one of the most prominent factors in serving customers well and a major driver for digital transformation. The improvements in agility that businesses experienced between on-premises infrastructure and IaaS purpose-built infrastructure for SAP is pronounced. Businesses report an average agility improvement of 9.9%. The distribution of responses is more lopsided than with cost, with 65.2% organizations experiencing an increase in agility versus 23.6 reporting a decrease. Among organizations, 47.1% say they saw an increase in agility greater than 20%, whereas only 16% saw a decrease greater than 20%. ▪ Performance. When migrating SAP to IaaS, businesses typically experience a performance boost on IaaS. The average performance impact of moving productive SAP landscapes to an IaaS provider is strong — an average increase of 14.75%. Nearly three-quarters of businesses (74.4%) report a performance increase — including 8% with a performance increase greater than 50% — versus 18.9% that see a decrease. The smallest companies see the highest improvement (16.5% increase), while the largest companies experience the smallest performance improvement (12.8%). ▪ Disaster recovery. Disaster recovery is one of the few features that prove to be slightly more costly on IaaS than on premises. It is quite likely though that businesses beef up their disaster recovery when they go to IaaS, which would explain this extra cost. The average cost difference between on-premises infrastructure and purpose-built IaaS for SAP is an increase of 5.2% with IaaS. The largest companies see the smallest change (3.5% increase), while larger companies report the largest change (7.9%).

©2020 IDC #US46789720 9 How Satisfied Are Businesses with Their SAP on IaaS Services? To get a better understanding of how satisfied businesses ultimately are with their SAP on IaaS environment, IDC measured businesses' satisfaction rates with these services on a scale of 1–5. Note that most average satisfaction ratings with mature technologies typically fall somewhere between 3 and 4.5, with 3.0–3.5 being very low and potentially problematic for a vendor, 3.5–3.7 being low, 3.7–3.9 being decent, 3.9–4.1 good, 4.1–4.3 very good, and anything over 4.3 excellent. Overlapping rates, for example, 3.7 being the top end of "low" and the low end of "decent" should be viewed as being in between those two ratings.

Figure 6 shows that businesses rate their IaaS providers for SAP as "good" or "very good" on multiple characteristics, with the three highest being RTOs and RPOs (4.24), the reference architectures for industry-specific uses cases (4.18), and the availability of a full regional SAP portfolio (4.12). It is fair to state that organizations are very satisfied with the various services they receive from their cloud providers as part of their SAP on IaaS environment.

FIGURE 6

Mean Satisfaction Rates with Multiple SAP on IaaS Services

Good RTOs and RPOs of the IaaS provider's infrastructure 4.24 for SAP

Provide reference architectures for industry-specific use cases, such as manufacturing, retail, healthcare, finance, 4.18 and energy

Provide a full SAP portfolio for all the regions that your 4.12 business is operational in

Provide SAP Data Warehouse as a service (allowing you to 4.11 consume Data Warehouse by the hour)

Provide SAP Analytics cloud 4.08

Good security of the IaaS provider's infrastructure for SAP 4.08

Good resiliency of the infrastructure for SAP 4.06

Provide HANA as a service (allowing you to consume 3.96 automatically configured HANA by the hour)

1 2 3 4 5 (Mean score) Note: Scores are based on a scale of 1–5, where 1 = extremely unsatisfied and 5 = extremely satisfied.

Source: IDC, 2020

©2020 IDC #US46789720 10 IDC also investigated these satisfaction ratings by juxtaposing them against the importance of the various services. A service for which importance is rated high and satisfaction is rated lower is more problematic than a service with low importance and low satisfaction, for example. We found that overall, none of the IaaS services for SAP have a lower average satisfaction rate than their importance rating, meaning that providers are delivering the value that customers are expecting given the importance of each service.

RUNNING SAP ON AWS

IDC measured the various data points covered up to here for AWS users only in order to provide an overall assessment of AWS' SAP on IaaS services. On various important aspects, AWS' results are better than the industry average. For example, the percentage of S/4HANA installations on AWS that migrated from an existing on-premises production system is higher for AWS and suggests that users are comfortable with going through such a potentially complex migration on AWS. A higher than industry average percentage of AWS users also say that planning the infrastructure for the S/4HANA workload on AWS is relatively easy.

AWS users find it more important than average that they can leverage the SAP Cloud Platform (which is available on AWS) as an interoperability layer and that they have access to a purpose-built IaaS for SAP environment on AWS. Furthermore, a higher than industry average percentage of AWS users report that it is easy to move from a virtualized environment to a bare metal or software-defined bare metal environment on AWS and that they expect bare metal instances to participate in the same virtual private network as their virtual instances on AWS.

The average companywide annual cost for running SAP on AWS is lower than the industrywide average, while at the same time businesses report achieving a greater revenue benefit from running SAP on AWS than industrywide. On top of that, more AWS users than industrywide report that they were able to significantly improve their cost for SAP infrastructure after moving from on premises to AWS.

The cost savings (for both capex and opex) by running SAP on purpose-built IaaS for SAP are greater on AWS than it is industrywide. 85.4% of AWS users see a significant or modest cost improvement by moving from on premises to AWS for their SAP landscapes.

The top 3 benefits that AWS customers say they get from running SAP on AWS are higher-performance infrastructure (35.9%), greater flexibility (35.3%), and greater security (34.1%). As to satisfaction rating, AWS ratings are all good, very good, or excellent. RTOs and RPOs received the highest rating (4.14), followed by availability of reference architectures for industry-specific use cases (4.12) and security (4.04). AWS' SAP on IaaS Offering AWS offers a broad range of technologies that are purpose built for SAP, and the cloud provider has developed a variety of powerful tools to support migration to, and deployment of, SAP on AWS. AWS has a large, global footprint with extensive security standards and compliance certifications. The SAP HANA offerings that businesses can choose from on AWS include 24TB high memory instances, SAP S/4HANA scale-out environments up to 48TB, and BW/4HANA scale-out environments up to 100TB.

Organizations of all sizes can run SAP HANA on AWS. Some of the characteristics that AWS promises are fast provisioning, easy infrastructure scaling, per use infrastructure cost, "bring your own license," and the ability to achieve high availability using Amazon EC2 Auto Recovery, multiple Availability Zones, and SAP HANA System Replication (HSR). For S/4HANA deployments, organizations can scale out up to four nodes, totaling 48TB of memory.

©2020 IDC #US46789720 11 AWS offers EC2 High Memory instances with 6, 9, 12, 18, and 24TB of memory per instance that are purpose built to run SAP HANA but also good for other large in-memory databases. Businesses can run the database and the related applications in the same Amazon Virtual Private Cloud (VPC), reducing networking complexity.

With regard to SAP S/4HANA, AWS enables organizations to run 4-node scale-out setups, totaling 48TB of memory for their SAP S/4HANA workloads on the AWS Nitro System. Customers can also run 16-node scale-out setups totaling up to 96TB for SAP HANA OLAP workloads such as BW/4HANA, BW on HANA, or Data Mart solutions. The AWS Nitro System is a combination of purpose-built hardware and software that provides additional performance, security, isolation, elasticity, and efficiency of the infrastructure. Businesses can deploy SAP S/4HANA in the AWS Cloud using the standard SAP S/4HANA installation process.

In addition, customers can further improve the performance of their SAP workloads with the AWS Nitro System, which eliminates performance overhead associated with the hypervisor layer. This offering makes 100% of the server addressable, ensuring that instances have full access CPU and memory on the host while delivering the same flexible and elastic cloud experience.

Support for moving SAP workloads to AWS is available from AWS Partner Network (APN). The network includes thousands of global and regional system integrators and technology ISVs. APN has a dedicated SAP competency — receiving this competency requires a partner to pass specialized business and technical trainings and demonstrate a track record of success helping customers migrate SAP to AWS. AWS also provides various tools to simplify these efforts, and the company offers its own consulting service, AWS Professional Services, which is staffed with SAP experts who assist in the planning and implementation of SAP migration, upgrade, and innovation projects. Globally, AWS has 77 availability zones across 24 regions. AWS' Migration and Deployment Tools In addition to supporting SAP's native migration tools (e.g., SAP Migration Cockpit and SAP Database Migration Factory Program), AWS provides several tools and methodologies for SAP system migration and deployment, including those discussed in the sections that follow. AWS Launch Wizard for SAP AWS Launch Wizard offers a guided way of sizing, configuring, and deploying SAP NetWeaver and HANA-based systems, including SAP S/4HANA, without the need to manually identify and provision individual AWS resources. Customers are asked to enter basic specifications for their application, such as NetWeaver Stack on HANA database versus HANA database, SAPSID, HANASID, the instance number used in the SAP HANA installation, and whether they want to use a single instance, distributed instance, or high-availability deployment.

AWS Launch Wizard then recommends EC2 instances, EBS volumes, and other AWS resources aligned with the customer's requirements and generates a cost estimate. The customer can adjust the configuration, which is immediately reflected in the cost estimate. Solutions are automatically saved as AWS CloudFormation templates, enabling an infrastructure-as-code approach to SAP deployment.

©2020 IDC #US46789720 12 AWS CloudEndure Migration AWS CloudEndure Migration is an agent that conducts continuous, block-level data replication of source virtual machines into a staging area in the customer's AWS account without causing downtime or impacting performance. When the customer is ready to launch the production machines, CloudEndure Migration automatically converts them from their source infrastructure into the AWS infrastructure so they can boot and run natively in AWS. AWS Server Migration Service AWS Server Migration Service (SMS) is an agentless migration service to migrate on-premises virtual machines to AWS using a virtual appliance. AWS SMS allows businesses to automate, schedule, and track incremental replications of live server volumes, making it easier for customers to coordinate large-scale SAP server migrations. The AWS Migration Acceleration Program The AWS Migration Acceleration Program (AWS MAP) provides consulting support, training, and services credits to help customers offset the initial cost of migrations and build a strong operational foundation on AWS. Qualifying customers can leverage MAP to simplify and reduce the cost of their SAP migration. AWS Quick Starts AWS Quick Starts are reference deployments that automatically implement key technologies on the AWS Cloud. Businesses can build a test or production environment in a few steps and immediately start using it. Quick Starts will automatically provision, deploy, configure, and install an SAP HANA, S/4HANA, or SAP NetWeaver system on AWS. There is no need for custom deployment scripts or manually deploying, configuring, and installing the SAP HANA system. Database Migration Option with System Move SAP's database migration option (DMO) with System Move enables migration of an on-premises SAP system to AWS by means of an export and import process. To transfer the SAP export files to AWS, businesses can use services such as Amazon S3, Amazon EFS (over AWS Direct Connect), AWS Storage Gateway file interface, and AWS Snowball. When ready to import data using the DMO tool, businesses can use AWS Quick Starts for SAP HANA to provision SAP HANA instances and build their SAP application servers on AWS.

The DMO of the Software Update Manager (SUM) can convert data from any non-HANA database to SAP HANA or SAP's other database, Adaptive Server Enterprise (ASE), including OS migrations and upgrades. The results are written to flat files that are then transferred to the SAP HANA system on AWS. Next, the flat files are imported, and the SAP application is rebuilt with the extracted data, code, and configuration.

For Businesses The value that businesses say they derive from their SAP applications and the continuing innovations that SAP delivers is typically expressed in highly positive terms. This is true regardless of where these SAP solutions are deployed, be it on premises, on IaaS, or on SaaS. But keeping up with SAP can be a challenge, these same businesses say, and organizations' IT staff grumble sometimes about the long and complex journeys they need to take to stay up to speed and derive maximum value from their SAP landscapes, including migrating their workloads to the cloud. Complexity sometimes leads to longer than expected migration times, higher than expected cost, and a greater need for outside expertise than was anticipated. Nevertheless, many businesses that IDC has spoken with say that they were able to largely meet their intended ROI. And once they had completed the journey, they rarely looked back with regret. For AWS There is a strong drive to the cloud for SAP landscapes, and this is an obvious and very large opportunity for AWS, one that the cloud SP has responded to with a comprehensive set of SAP offerings. The challenges for AWS are roughly twofold. The first challenge for AWS aligns, of course, with the aforementioned challenges for businesses that make the journey to SAP HANA and/or S/4HANA in the cloud. AWS understands this and is providing a multitude of services to make the migration to cloud easier for its potential customers.

The second challenge is that the company operates in a very competitive market, in the sense that offering SAP on IaaS is regarded as a differentiating offering by all the large cloud SPs. With the playing field leveling as a result, the differentiation is increasingly marked by the breadth of the offering and complementary services, the level of integration with SAP SaaS offerings, the performance of the virtualized and bare metal instances and the network, the performance of the storage, the high availability and disaster recovery, and so forth. This IDC research shows that AWS gets high grades from customers for these SAP offerings.

CONCLUSION

IDC research shows that SAP customers are extremely determined to fully leverage the value they can get from SAP solutions for their digital transformations. Indeed, they are willing to go through complex, lengthy, and sometimes costly journeys to get there, be it by moving from any database to SAP HANA, from Business Suite to S/4HANA, or from an on-premises SAP deployment to a cloud deployment. These journeys are different for each individual organization depending on various factors including business size, SAP landscape complexity, and the nature of an organization's data. While customer journeys are unique, IDC finds there is relatively little dissatisfaction with the destination. Once the SAP workloads that customers want to run in the cloud are indeed in the cloud, they contribute strongly to an organization's digital transformation. With regard to AWS, IDC has recorded very favorable ratings for the cloud SP's SAP on IaaS offerings.

Methodology The data in this white paper was collected in an IDC survey that was fielded in November 2019 and that has the following characteristics:

▪ n = 600 ▪ United States (49%), Germany (16.7%), United Kingdom (10.3%), Canada (7.1%), Australia (6.7%), Singapore (5.3%), and India (5.0%) ▪ 25 industries, excluding IT, computer, software, or internet services ▪ Company sizes — 500–999 (19.4%); 1,000–2,499 (30.3%); 2,500–4,999 (26.3%); 5,000–9,999 (18.6%), and 10,000 or more (5.4%) (Throughout the white paper, they are referred to as smallest, small, midsize, larger, and largest, respectively.) ▪ Respondents' titles — Director (61.2%) and VP, EVP, CTO/CIO, and CEO/presidents (38.8%) ▪ Status — Currently running SAP on IaaS (50%) and planning to run SAP on IaaS in the next 12 months (50%) (Throughout the white paper, they are referred to as "current IaaS users" and "future IaaS users.") ▪ IaaS for SAP providers — Alibaba, AWS, Google Cloud, Huawei, IBM Cloud, Microsoft Azure, and Open Telekom (Note: Per IDC policy, this white paper will not provide comparative data between the IaaS for SAP providers, but it will provide data for the sponsor, AWS, and compare those with the industry aggregate.)

©2020 IDC #US46789720 15 About IDC International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact- based decisions on technology purchases and business strategy. More than 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company.

Global Headquarters

5 Speen Street Framingham, MA 01701 USA 508.872.8200 Twitter: @IDC idc-community.com www.idc.com

External Publication of IDC Information and Data — Any IDC information that is to be used in advertising, press releases, or promotional materials requires prior written approval from the appropriate IDC Vice President or Country Manager. A draft of the proposed document should accompany any such request. IDC reserves the right to deny approval of external usage for any reason.