Hybrid Cloud

For SAP's existing customers, the "cloud computing" operating model is by no means new. SAP itself has been focusing strongly on this IT trend for several years and has acquired numerous companies that offer their applications exclusively in the cloud: SuccessFactors, Ariba, Concur, Fieldglass, Callidus and others.

At the same time, the company also developed corresponding cloud concepts based on its own ERP and database solutions: Hana Enterprise Cloud (HEC), Hana Cloud Platform (HCP) and SAP Cloud Platform (SCP). SAP CEO Bill McDermott never tires of promoting his "cloud first" but also "cloud only" concepts.

But for the latter - cloud only - he had to accept a call to order from the German-speaking SAP user group DSAG e. V. a few weeks ago: "Cloud only brings ERP into the dilemma," was prominently placed on the cover of the DSAG member magazine.

ERP dilemma

At the beginning of the year, SAP was still trying the "multicloud" exit strategy because many existing SAP customers feared a "vendor lock-in" with SCP. At the DSAG Technology Days in Stuttgart earlier this year, SAP EVP Björn Goerke presented SAP's multicloud concept based on SCP, AWS, Google Cloud Platform and Microsoft Azure. But the trend in 2018 was different: open source and hybrid cloud.

"In addition, there is a special course that limits the risk for companies. Leading all hyperscalers, Google consistently builds on open source and massively brings frameworks such as Kubernetes or most recently Istio to the market. On the Google Compute Platform, these are then offered as a fully managed service."

report Stefan Ried and Max Hille from Crisp Research in a blog entry. Both analysts were at the Google Next conference in London this year.

On-premise or off-premise - the general IT trend is toward cloud computing, so SAP CEO Bill McDermott's "cloud first" strategy is naturally justified.

"The world's largest software vendors, like SAP, are pursuing a cloud-first strategy"

confirms Michael Jores, Director at Suse in the Central Europe region, and in the E-3 interview he specifies:

"Cloud deployments have a high degree of standardization with simultaneous degrees of freedom, for example in capacity requirements, which massively reduces expenses for the customer.

Therefore, such a strategy makes sense and implementation takes time and development effort. SAP has taken the path and is successfully providing more and more cloud-based solutions."

A survey by the Bitkom digital association confirms Suse manager Jores' approach. Three out of ten companies use a cloud solution that is outsourced to a certified data center. This is shown by the Digital Office Index 2018 - a representative survey of 1106 companies with 20 or more employees conducted by the digital association Bitkom.

"The trend of placing IT infrastructure such as cloud solutions in the hands of professional service providers continues. This is a testament to the increasing confidence of companies in cloud providers."

says Jürgen Biffar, CEO of the ECM competence area at Bitkom.

"The benefits are often obvious for companies: they can reduce IT costs while increasing security, as the cloud - both public and private - is usually much better protected with professional service providers than with in-house IT solutions."

On- and off-premise

But the cover of the DSAG association magazine in October read: Cloud only puts ERP in a dilemma. A solution to the dilemma could be a hybrid approach: How does Michael Jores define hybrid cloud?

"In current cloud adoption, customers are currently turning to hybrid cloud scenarios to run parts of the application landscape 'on-premise' in their own data center and replace or extend it with cloud offerings.

SAP is pursuing a hybrid approach of running the 'Digital Core' S/4 on-premise as standardized as possible and developing and operating customer-specific adaptations on the SAP Cloud Platform, SCP, in the cloud.

This provides the flexibility of customization via the SCP. From an infrastructure perspective, Suse provides both the Linux platform for on-premise operation and the same business-critical Linux platform on the cloud in order to keep expenses in hybrid environments as low as possible in the hybrid model with one platform standard.

Likewise, Suse developments follow the requirements of SAP hybrid cloud developments and provide the corresponding Suse solutions for all deployment options of the SAP data center."

Cloud capabilities

Bernd Stopper, head of Google partner sales, agrees with Michael Jores:

"Bill McDermott was right. Choosing the right cloud is not just about IaaS, it's about creating new opportunities for SAP customers with complementary cloud services.

SAP plus the Google Cloud Platform are the new capabilities that go far beyond just another hosting platform. GCP services, such as Machine Learning and Big Query, already enable direct extension of existing SAP capabilities with additional intelligence and efficiency."

A hybrid cloud is a form of cloud deployment and operation in which applications are run in the location that suits the customer. Google manager Stopper explains that a hybrid cloud consists of three separate, distinct things, but they are often used together:

First, a hybrid infrastructure is an extension of the on-premise and co-location network perimeters into the cloud as well as extension of the on-premise and co-location storage subsystems into the cloud.

Second, hybrid applications are applications that consist of different components, run in different locations, and typically span on-premise, co-location, and cloud boundaries.

ThirdHybrid management is the management of applications and infrastructure on-premise and in the cloud in a unified way, ideally with the same management tools.

"Hybrid cloud computing is now the talk of the town at Google, too"

writes Crisp analyst Stefan Ried in his blog and specifies:

"That's where a new network nat service comes in just at the right time. Combined with the container management Kubernetes and also with the new Istio toolset, the Google Cloud can be configured as an extension of one's own data center. On the Google side, this is all implemented as a Software Defined Network.

On the customer side, hardware and configuration services may be needed, which Cisco, for example, already offers. In the medium term, such topologies can be used to implement modern micro-service mash architectures that allow individual services to run on-premise and other services of the same application to run at the hyperscaler."

How do all these options fit into Google's strategy? Crisp Research analysts Stefan Ried and Max Hille researched and verified the answers in their blog at the London event Google Next:

"At Crisp Research, we think it's a very good fit. Google was the last of the three hyper-scalers to jump on the enterprise bandwagon and didn't have the right services for a long time.

Even today, Google still has less diversity in its offerings compared to AWS and Azure. But what Google is doing is being tried with even greater scale and efficiency."

Multicloud vs. hybrid

For an existing SAP customer, the topic of "on- and off-premise" is enormously important. A fundamental decision for and against cloud metamorphoses is definitely on the agenda, which also involves positioning: What is the difference to multicloud?

Achim Zimmermann, SAP director at Q-Partners and a successful Google partner, says that in a hybrid cloud scenario, customers often use a combination of on-premise services and at least one public cloud. Zimmermann:

"Hybrid cloud services offer advantages in terms of greater control over private data. An organization can store sensitive data in a private cloud or on-premises data center while leveraging the robust computing capabilities of a public cloud.

A hybrid cloud uses one layer of management as opposed to a multicloud, which requires separate management of each cloud environment."

His colleague Bernd Stopper, Google manager, adds in an E-3 conversation:

"In a multicloud approach, services from multiple public cloud providers are used simultaneously. And especially in this multicloud approach, the challenge is the seamless management, deployment and simultaneous operation of multiple clouds.

Specifically for this challenge, Google announced the Cloud Services Platform, CSP, at the Google Next conference in San Francisco. CSP is based on open standards such as Kubernetes and Istio and enables deployment and operation of complex container-based applications across cloud platforms."

Kubernetes Services

Crisp analysts Stefan Ried and Max Hille report similarly from their visit to the Google Next event from London:

"For example, AWS and especially Microsoft are painstakingly and slowly learning how to get a managed Kubernetes service up and running, while Google is provisioning and deprovisioning four billion containers every week for its own purposes alone.

Even though most of it is managed with Kubernetes predecessor Borg, the container management experience gives Google a big head start for its managed Kubernetes offering."

And another positive statement about Google can be found in the blog post by Crisp Research analyst Stefan Ried:

"Ultimately, on its twentieth birthday, Google has come of age and understands co-innovation models as well as the traditional enterprise ecosystem around large systems integrators.

Thus, most of the major system integrators were also represented with a booth at Google Next in London. From Accenture, Deloitte, KPMG to Rackspace and the managed service dinosaur Atos, these managed hybrid cloud service providers are increasingly trying to offer their own applications on the hyperscaler stacks alongside SAP migration.

Some are already offering interesting mash scenarios between S/4 and Google AutoML with their industry expertise, as traditional business logic on SAP is still the core of the enterprise, but the Google Machine Learning framework is significantly more advanced than SAP's own Leonardo Machine Learning."

This is the new selection criterion for public cloud infrastructure and, thanks to open source, hopefully not a long-term provider lock-in. Google, for example, is now also benefiting from the market trend that CIOs are beginning to shift SAP operations to the public cloud, as a recent Crisp study clearly shows.

(free download after registration (here) and management summary by Crisp CEO Carlo Velten (here) or in the E-3 Magazine July/August 2018 on page 21).

Is hybrid cloud a scenario, blueprint for a future SAP infrastructure or do operational hybrid cloud scenarios already exist? Jens-Gero Boehm, Director at Suse and responsible for the partner and service provider business in Central Europe, explains:

"An example of a hybrid cloud approach that works is to provide production operations in the on-premise data center and POC, training and testing environments in the public cloud. A disaster recovery data center can also be connected from the public cloud."

The SAP Cloud Ecosystem

Achim Zimmermann of Q-Partners knows from his practical customer experience that cloud technology certainly has the potential to also provide SAP environments on a cloud ecosystem in the future.

"Hybrid clouds across multiple cloud providers could take this to yet another level by allowing existing SAP customers to consume the services they want through a variety of different cloud providers"

explains Zimmermann.

"The current challenge to exploit this opportunity is mainly around interconnectivity and security between the different cloud providers to maintain a consistent high user experience.

To get to this diverse multicloud ecosystem, a step-by-step roadmap is recommended, which leads via a hybrid cloud into a multicloud world. In particular, the hybrid infrastructure, network and storage subsystems, but also security challenges must be mastered.

So the question will no longer be on which platform the SAP environments are run, but: Which services do I want to use complementarily to create more intelligence, innovation and customer value?

Operational hybrid cloud scenarios already in use include SAP testing and development systems in the Google Cloud Platform, which can be provisioned flexibly and within minutes, providing hybrid infrastructure via Google partner solutions."

An example from the SAP community where the cloud trend has arrived: Metro-Nom, the IT division of the retail company Metro, is moving its central financial system to the Google Cloud platform. Metro operates in 35 countries as one of the largest B2B wholesalers.

In the past, the company relied on local financial systems that differed in application depending on the country. From now on, 100 different systems will be consolidated into one central finance system in the cloud using the Google Cloud Platform and SAP S/4 "Simple Finance". This gives Metro a significant technological competitive advantage.

"By taking the step of lifting SAP services in finance onto the Google Cloud, we are significantly accelerating the service for our customers. This is because the Google Cloud offers not only technical advantages, but also the opportunity to optimize collaboration within individual teams. In addition, we can adapt our system to customer requirements in real time."

says Timo Salzsieder, CIO at Metro. Axel Koss, Director Financial Management and Administration at Metro-Nom, who is responsible for the migration of the financial systems to the cloud, adds:

"The use of a central SAP financial system means that time-consuming system tests and country-specific updates are no longer necessary. The extensive coordination of international teams is thus greatly simplified."

Cloud and Open Source

The Suse Linux platform is suitable for hybrid deployment because it is made for on-premise and cloud operation. It can thus ensure standardization in a hybrid cloud landscape.

Suse manager Michael Jores explains:

"Suse delivers for the hybrid cloud, on-premise and cloud infrastructure: SLES for SAP Applications as an optimized Linux platform, high availability and disaster recovery for SAP, life-patching to increase availability, Suse Manager as an automation tool for the Linux infrastructure.

On the on-premise side: a Kubernetes platform to deploy SAP Data Hub, for example. On-premise and within the SAP Cloud Platform, Suse-OpenStack is provided and there is co-development with SAP for the PaaS layer in Cloud Foundry."

But what IT skills does the existing SAP customer need on the way to Hybrid Cloud, we asked Jens-Gero Boehm:

"Suse Linux infrastructure skills from on-premise operations can be transferred to cloud infrastructure. Suse high-availability plus disaster recovery skills via Suse HA technology, Pacemaker and Suse live patching are also important, as these are needed for zero-downtime approaches.

The use of infrastructure automation has significant optimization potential with Suse Manager. With the latest developments at SAP on Kubernetes, Suse provides the Container-as-a-Service platform to orchestrate container-based applications with Kubernetes."

Achim Zimmermann of Q-Partners agrees with his colleagues from Suse in the E-3 interview and adds:

"Knowledge of hybrid cloud doesn't just extend to infrastructure-as-a-service concepts; it's more about understanding the broader capabilities of cloud ecosystems and delving into the areas that are most relevant to your own cloud adoption.

The most effective journey to the hybrid cloud requires technically savvy people who have a greater understanding of business operations. In turn, business experts need to become more tech savvy."

Google manager Bernd Stopper once again emphasizes the importance of open source components here:

"Google offers a wide range of technologies for hybrid applications. So a journey across hybrid cloud to multicloud environments is possible.

Kubernetes in particular offers a lot of flexibility for hybrid cloud environments to run applications within a container portably between on-premise and in the cloud."

Monetary advantages

Finally, Bernd Stopper from Google explains:

"A hybrid cloud offers a wide range of advantages that are reflected in monetary terms. On the one hand, it offers new, much more flexible billing models for SAP workloads in the cloud.

For example, IaaS workloads for S/4 on Google Compute Engine, VMs, can be billed by the second. Furthermore, there is the option to sign a one- or three-year commit contract with Google. A one-year commit can save up to 37 percent on costs, and a three-year commit can save up to 71 percent."

Hybrid cloud seems to be becoming a successful model in the SAP community.

"With a cloud hosting service provider, companies can place constantly accruing investments in new systems in competent hands. This not only saves time and money, but is also more secure and frees up capacity in the company's own IT department to support its own applications."

says Jürgen Biffar, chairman of the ECM competence area at Bitkom.