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What to Expect When Starting Your Journey to SAP on Iaas

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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.
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