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SAP Cloud Computing

452 Posts

With rapid adoption and migration to the Cloud, comes changes to how we run and manage our businesses.

In this post, we look at changes for Cloud Vendors, and Reseller Partners as it relates to Consulting and Implementation Engagements. The key comparative areas being:


AreaThe Traditional On-Premise ModelWhat Changes with Cloud?
FeesProjects are based on a one-time Time & Materials basis typically with  unpredictable costs of implementation.

Projects can be delivered on a Fixed Fee basis – thereby significantly lowering and providing predictable services fees.

Project Fees can also be billed on a recurring basis to cater for ongoing customer engagement and frequent innovation cycles.

DurationProjects can last for years.Cloud projects are measured in weeks, not months or years, providing a faster time-to-value.
LocationOnsite Consulting with associated additional expenses.With no onsite hardware with installed software, an effective virtual approach can be taken to streamline project costs and bottlenecks.
Software TailoringExtensive application customisation and associated ongoing maintenance costs.Focus on best practice, packaged Configuration versus customisation.
RequirementsStart with customer requirements and define a one-off solution.Start with customer requirements and always leverage best practices for reusability
Resource AllocationLarge Implementation teams varied and unpredictable experience levels – all billing the clientFocused team with functional depth and experience
UtilisationConsultants are incented to bill hours (and keep utilisation high)Consultants focused on implementing efficiently with high quality and customer satisfaction, and multi-task on multiple-projects.

The Cloud Subscription Renewal Model changes the game as far as Customer success is concerned. A customer centric approach is critical towards winning in the Cloud.

"68% of companies are more likely to have a marginal project or outright failure than a success due to the way they approach business requirements analysis"

          - Tech Republic

This places further emphasis on ensuring best-in-class solution delivery in order to maximise Cloud customer retention. 

Ultimately, the impact and knock-on effect of project implementation failure can be seen as one of the key reasons a company may choose not to renew their Cloud subscription.


Kunal Pandya is a Senior Director at SAP, responsible for the Global Cloud Solution Center, enabling and evangelising Cloud to SAP's Partner Ecosystem.

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"We have concerns about moving our applications to the Cloud"


This is a statement I have heard countless times from businesses large and small.  This post explores the key concerns, and addresses SAP's solution.


Concern 1: "Is the Cloud as secure as hosting applications in-house?"

Quite possibly the single largest concern about moving to the Cloud. The common myth with IT Security Leaders is that hosting software in-house, is more secure than hosting in a controlled Public Cloud. And this reminds me of a tweet I recently came across:


The fact is, there are not too many companies in the world who have invested over 40 years of experience and expertise into security.  SAP's Cloud complies with the toughest and most vigourous certifications and independent audits.


  • Professional hackers are contracted to test and harden the infrastructure
  • Prospective Customers are able to review data centres - including certifications, and audit reports (under non-disclosure)
  • The largest banking institutions, government agencies and security companies are using SAP's Cloud today - this is by far the biggest ratification of the Cloud.


Operating a data center usually does not fall under a given company's core area of expertise. Increasingly, these companies are asking themselves which services should be run in the cloud. Ultimately, having invested €millions into it's data centres on a continual basis, SAP's Cloud Infrastructure is as secure, as if your company had an unlimited budget.


Learn more about SAP's Data Centers here: SAP Datacenter


Concern 2: "What does SAP know about the Cloud?"

SAP's Cloud consists of over 35 million paying subscribers.  There is no other Cloud Vendor on the planet with more paying subscribers to their cloud.


Typically, we think of Consumer Cloud applications such LinkedIn or Facebook who combined have over 1 billion subscribers - but how many of those subscribers pay for the service?  Not more than 35 million. We also think of companies such as Salesforce.com or Workday - again, not close to 35 million.


"But what does 35 million paying subscribers actually mean?":


No software vendor can reach 35m paying subscribers by accident.  In order to do so, they must have:


  • Best in Class Solutions
  • Best in Class Infrastructure
  • Best in Class Security
  • Best in Class Quality Assurance
  • Best in Class Partners
  • Best in Class PEOPLE


With YOY triple-digit growth in the Cloud, SAP is not only a leader in the Cloud, it is THE leader in the Cloud.


Concern 3: "Can customers in the same cloud view each others data?"


Multi-tenancy is a game changer, not only by providing significant economies of scale, but also increasing the rate of product innovation to not only match, but usually exceed customer's expectations.


In a public, controlled cloud, customers share a pool of computing, network, memory and storage resources. As these physical resources are shared, a common concern is that cloud customers are more easily subjected data dilution between customers using the same service.


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The fact is, it is impossible for customer data to be exposed to another customer within a multi-tenant controlled cloud environment - such as SAP's. Even while all customers share the same infrastructure and binary code of the application, the data is always kept separate in Memory as well as within the Database.  In-fact SAP's Cloud Applications have been built from the ground-up as multi-tenant applications ensuring strict segregation architecture and best practices.  Strong login credentials or even Single-Sign-On capabilities protect the regular access to the application.


Concern 4: "We must host our applications within our country's borders"

In light of the Edward Snowden revelations of widespread surveillance by the National Security Agency, the response from many IT Leaders will increasingly be that they are indeed uncomfortable with the loss of control over their data. In recent months, many countries have begun to explore mandating local cloud providers to ensure that domestic data stays in the country.


This can be considered a show-stopper.  But is it?  I have heard IT Security Leaders raise this as a concern, but it's legitimacy can be questioned upon further detailed research.

The fact is, SAP's Controlled Cloud complies with the most stringent laws, certifications and data protection provisions. Data from cloud customers falls under the jurisdiction selected by the customer and IS NOT forwarded to third parties. SAP’s support services ensure that data protection is also maintained during required maintenance operations.

SAP's Cloud data is not stored “somewhere in the cloud,” but in clearly agreed-upon locations. SAP cloud customers specify in their contract which data center they want to use as the “data location.” No one has blanket access to the data, and comprehensive audits ensure that all technical and organisational measures are complied with and implemented.

Concern 5: "We just don't want to lose control of our applications"

Whilst the tide is turning, there will be companies and IT Leaders who are unwilling to take the leap into the Cloud. There may be genuine concerns, however I typically find this is more of an emotional response - especially in recent times.

We must be mindful of the fact that 'moving to a vendor's cloud' equates to outsourcing.  The traditional CIO and CTO's role is changing from being builders of business technology, to enablers and drivers of business strategy. The era of Cloud Computing, where the business leader brings new software and technology to the enterprise, means IT leaders need to hone new skills or risk being relegated to the role of IT order-taker.

In addition, due to the ease of adoption and consumption of Cloud applications, Line of Business (LoB) leaders are beginning to play an even bigger role in the procurement process.  IDC estimate by 2016, 80% of IT decisions will involve the LoB, and 53% of IT decisions will be lead by LoB.

Screen Shot 2014-07-27 at 17.24.59.png

Because CIOs and CTOs face competition in such completely new ways, they have to be much more responsive and agile in proving their value and worth. They must be better intermediaries in dealing with the variety of cloud services available today, and add value by coming up with a more responsive set of services and better overall value for the company - aligned to corporate strategies.

This significance of this change can bring an emotional response against Cloud, and we must be mindful of this.

However, moving to the Cloud does not mean the end of in-house development. It is vital for IT leaders to understand that the Cloud is not entirely replacing internal infrastructure, but augmenting it. It is due to this, businesses may need greater application development expertise across a broader range of skill sets, not necessarily less. Internal software engineers and developers must possess skills that span both the cloud and on-premise resources, securing and leveraging the opportunities inherent with Cloud without giving up the traditional processes that differentiate and deliver competitive advantage.

The Cloud is here, and adoption and migration continues to grow at a rapid pace.  These key concerns must be met with empathy and a consistent, researched response in order to obtain the key sponsorship that will be required to support adoption.

Kunal Pandya is a Senior Director at SAP, responsible for the Global Cloud Solution Center, enabling and evangelising Cloud to SAP's Partner Ecosystem.

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276374_l_srgb_s_gl.jpgIs your company ready for the coming cohort of "Cloud Natives" ?

My daughter (16) saw me recently preparing yet another Powerpoint deck about Cloud. So she asked "Dad, like, what's cloud?". After stripping out the fragments of teenspeak, I launched on to one of my corporate pitches about cloud that I give , carefully explaining that the benefits of cloud have moved on from IT savings to flexibility and innovation.


Blank look. Nothing in her life is not cloud.


Teenagers live their life flitting between devices, leaving a trail of blogs, texts, updates, pictures, music and videos all over. The very idea of worrying about where data is stored, or how applications are constructed is as important to them as my knowing about how a carburettor works. To one generation, the corpus of knowledge that "everybody knows" becomes arcana that only a hobbyist would care about.


Talking about life BC (Before Cloud) requires us to discuss how applications are written, sold, and installed. Most teenagers have never even inserted a CD into a computer to install a piece of software. In fact my daughter is a bit hazy on the difference between a CD, an LP and a 78: they all seem equally antique. So having a discussion about Cloud requires a comparison with non-Cloud, and there are almost no examples of that in her life: she merrily uses GMail, DropBox, Tumblr, Picassa, Facebook or Angry Birds which seem to magically move from Tablet to Phone to Wii to Smart TV with all of the data. When we bought a new TV, we typed in a password and suddenly all of our pictures appeared on the TV. I was the only one impressed.



Apart from appearing hip to your kids (a lost cause in my case) what does this have to do with your decision on how to move to the cloud?



My daughter will be entering the workforce in 5 years: she will be one of the first cohort of "Cloud Natives" who will be joining companies ready to start work. If their first IT experience involves imaging a laptop, using shared drives, installing MS-Outlook plug-ins then they won't be happy or efficient. All of the systems of engagement that your employees use need to be understandable by a Cloud Native.



5 years isn't very long for an IT strategy. You need to assume that traditional on-Premise Client Server systems will be incomprehensible to a Cloud Native. Any IT roadmap needs to adjust to this reality: the transition is happening fast. You can't afford to miss out on the creativity and energy of the coming generation.


If you are not sure who to accelerate your path to the cloud, take a look at sap.com/cloud for ideas, inspiration and information on Hybrid Cloud approaches.

It’s summer time on the Northern hemisphere. Everybody there will be facing summer holiday soon, for most people the best time of the year – recharge batteries, enjoy time with the family, learn about new cultures, countries and locations or just hike in the mountains and enjoy wonderful views and clear air.


The anticipation is rising the closer the journey comes, but the list of things to do before leaving the office is still not empty. And between you and your holiday one last thing is left to do:

Your Travel Expense Report with the expenses of the past few weeks!


To make sure the reimbursement brings a welcome windfall during your vacation you have to submit it today!

Heck, it’s the same as the tax declaration but it’s not only once a year but every month – at least. And the family is waiting at home.

Why can’t this be as easy as being on vacation, enjoying the sun and the cocktail in your hand watching your wife reading a thriller and your kids cheerfully playing in the water?

A dream? It can be real! Can’t believe it?

So here is how you can make that dream come true: Instead of collecting all the paper receipts on your journey and put it in an envelope to not lose them, and weeks later trying to remember where they all came from – you directly take a picture with you smartphone, enter the amount and forget it. It’s automatically assigned to your journey. Instead of having a very long last day in the office, you only have submit your travel expense report with another few
clicks from the shuttle back home. That’s all!


Trade in unproductive time for your best time of the year!


Isn’t that a fantastic exchange rate? Your family will love SAP Cloud for Travel and Expense, too.




Visit us live on GTBA Convention 2014 @ booth 2819 (26th-30th July 2014)

Or visit us online on www.sap.com/cloudfortravel


Want to read more blogs about Travel and Expense management? Click here



Hope you did tune into our first of a webinar series on...

It’s  Time to Embrace the Cloud and the Platform - Understanding SAP's Cloud Strategy

Not? Well, you might have missed the invite then ;-) Check here also for recording: ASUG.com - Events





In session #1 Matthias Steiner, Sindhu Gangadharan and myself,  we focused on an intro to what we see happening in the market, how to address a business strategy supported by cloud and had a pre-view on 3 key topics - SaaS, PaaS and Integration.


We know that the move to the cloud must be a thoughtful evolution. Our strategy centers on leveraging the right mix of cloud, managed (= virtualized, outsourced, hosted, private cloud), and on-premise technology.  You have very specific challenges you are looking to solve, and very specific investments you want to leverage. The customers starting point on this journey will help define the mix that is right for you - and the focus needs to be on business outcomes.

You find the slides posted here:  ASUG Webinar on Cloud, PaaS and Integration (July 2014)

*Update* You find the recording here: Webcast Series: It's Time To Embrace the Cloud and the Platform - Understanding SAP's Cloud Strategy-20140722 1629-1



Session #2 will be all about the platform - and my distinct colleague Matthias Steiner


SAP’s cloud strategy spans across all three layer of cloud computing from Infrastructure-as-a-Service, to Platform-as-a-Service and Software-as-a-Service.

While the first (IaaS) and the last (SaaS) are well-known and established technologies, the middle layer – PaaS – is still emerging. At SAP we believe that companies are well-advised to embrace all three layers to implement a successful and ultimately sustainable cloud strategy. SAP HANA Cloud Platform (HCP) is the Platform-as-a-Service offering from SAP and it plays a vital role in our vision for a winning cloud strategy in a hybrid IT landscape.


Sitting on top of the IaaS layer, cloud platforms provide both a design and run-time environment to develop new solutions or extend existing applications and run them in the cloud. That could be custom solutions used internally within your company or new cloud applications sold via the SAP HANA Marketplace (or other channels). HCP combines the full power of the SAP HANA platform with the ease of use and maximized outreach of the cloud. A comprehensive et of application services and APIs for the most commonly required functionality (e.g. Identity management, connectivity, portal capabilities, integration services, mobile and analytical services etc.) significantly reduce the cost of development as well as the time to market. And while there are no limitations of what once can develop with HCP we see three major usage scenarios:


  • Develop new line-of-business or vertical solutions leveraging the power of in-memory computing based on SAP HANA
  • Extend existing on-premise applications (e.g. the SAP Business Suite)
  • Extend existing on-demand solutions (e.g. SuccessFactors Employee Central)


In this part of the webcast we will introduce you to SAP HANA Cloud Platform and provide an overview about its capabilities. We’ll also provide some real-life customer examples of the three exemplary usage scenarios outlined above.



See more here http://hcp.sap.com and here http://scn.sap.com/community/cloud-platform and join us:


Exploring SAP’s  Hana Cloud Platform: The Foundation for Developing and Running Applicationsin a Hybrid IT Landscape

7, 2014 at 11:00 am ET



Session 3 - touches a key element for hybrid cloud deployments - Integration. Sindhu Gangadharan - #SAPTechEd 2013 Speaker of the Week

My colleague Sindhu Gangadharan will dive into the key area supporting hybrid cloud deployments - integration. Integration is key to achieve the Desired Business Outcomes from the Cloud. The approach to cloud integration needs to be as flexible and agile as your cloud applications and platforms. When it comes to the right approach to cloud integration in the era of hybrid IT, it's critical that the solution is able to seamlessly bridge the cloud and on-premise world.


As of March last year SAP brought to market HANA Cloud Integration (HCI) a service offered on HCP. HCI  is SAP’s strategic cloud integration solution for cloud to cloud and cloud to ground integration scenarios.  HCI is also enriched with  pre-packaged integration content for the different SAP Cloud LOB solutions like SuccessFactors, Cloud for Customer, Ariba etc.


In this part of the webcast we will look into the product capabilities of HANA Cloud Integration and how customers can very quickly go through a typical cloud integration project consisting of the following steps:

  • Discover from content catalog
  • Configure and deploy integration content into customer workspace
  • Monitor and operate integration scenarios


We will also look into some of the customer examples where customers have leveraged HCI and gone into production within a matter of few weeks of implementation time.


Join us:


Cloud Integration - The Cornerstone  of your Cloud Journey

23, 2014 at 11:00 am ET




And finally, at TechEd / d-code in fall you will have the opportunity to attend a full day pre-session. Check here: Home | SAP TechEd && d-code Las Vegas and join us on site:


Focus on the Cloud: Series Recap and an Insiders POV on SAP d-code (SAP TechEd)

8, 2014 at 11:00 am ET




Looking forward to see you on the webinars and in October SAP TechEd && d-code.

Follow us via @SAPCloud and the experts via @steinermatt , @gangadharansind and @SDenecken

Cloud is the business model of the future, but it comes in a number of different guises. Enterprises need to find the right mix – otherwise they could end up creating unnecessary complexity. Sven Denecken, Global Vice President of Cloud Solutions at SAP, shares some helpful tips.




To judge by the general buzz at SAPPHIRE NOW in Orlando, one thing is clear: Cloud technologies have shifted from the realms of hype into everyday business reality. And the days of “Cloud 1.0,” which seemed to sound the death knell of every on-premise system, are numbered. Companies are looking very closely at how adopting cloud technology could boost their flexibility and broaden their options. When it comes to creating new processes and harnessing the potential of new markets, businesses should certainly investigate whether a cloud-based solution might not be a simpler and more scalable alternative to an on-premise landscape.


To ensure that they benefit from the advantages that cloud computing undisputedly offers – rapid business payback, speed, and ease-of-use – cloud technology visionary Sven Denecken advises companies to consider the following questions before making a decision. It could help them avoid some of the dreaded pitfalls – like unintended complexity.


Sven’s seven tips for preventing complexity are:


1. Software as a service: get user buy-in


No software innovation reaches users faster than a cloud application. Not even the tightest on-premise investment schedule can match cloud computing for speed of innovation. User experience is key to the acceptance of software from the cloud. Yet, as well as adhering to the design principles that reflect the way humans interact with software, cloud applications must also be consistent . That is, they must harmonize with the other applications deployed in the enterprise. After all, what’s the use of a great app that is easy to operate if it can’t communicate properly with the existing business processes?


2. Platform as a service: a good application needs a good platform strategy


By leveraging an innovative platform from the cloud, companies can continue to use their existing solutions, incorporate new add-ons, and develop new applications – without having to start from scratch every time. However, the risk here is that developers might be tempted to misuse the platform as a toolbox and to ignore the multitenant nature of the system as a whole. To take an example, salespeople need to be able to access revenue and financial key figures, purchasing data, and production status information without having to switch back and forth between programs.


3. Integration: clarify responsibility


Ease of use can be compromised if it is not clear who is responsible for a particular application or applications. This is especially an issue if an enterprise deploys products from several different software companies. But even if a variety of cloud products are in use, it must still be possible to run diagnoses and reports, collect measurement data, and deal with error messages across the entire product spectrum. This requires “consistent integration.”


4. Infrastructure as a service: bring applications to the cloud age


Cloud solutions require a well-designed infrastructure because it needs to “understand” the differing strategies that cloud providers adopt. Experience shows that companies tend to move to the cloud incrementally rather than in one giant leap. The main challenge they face is making their infrastructure cloud-enabled and innovation-ready, while simultaneously bringing their existing applications to the cloud age.


5. Security: keep the NSA affair in mind


Data security and privacy are today’s hot topics, not least because of the public debate and anxieties that have arisen in the wake of the NSA affair. SAP data centers comply with the most stringent security standards. So far so good. But companies also need clear policies that stipulate where data is stored, how it is transferred, and what happens to that data when cloud partners change.


6. Public cloud: multitenancy in the hybrid model


In this model, the cloud provider operates an infrastructure and offers customers access to applications over the Internet. The focus here is on cost-efficiency. Most enterprises’ software systems have a multitenant architecture. However, most public cloud providers aim to provide maximum scalability, which limits their customers’ ability to adapt their business processes. The more customer-oriented variant allows a broad spectrum of configuration options, but, in both cases, customers are generally prohibited from accessing the program code. If this option were available, it could create new levels of complexity by affecting delivery cycles, performance, and response times. A practical solution is to mix systems to create a hybrid model that ensures a high degree of scalability, a secure multitenant solution, and configurability. The perfected art of the public cloud makes it possible for customers to extend their systems without jeopardizing the vendor’s program code or slowing innovation cycles.


7. Private cloud: hybrid tops efficiency stakes


In the private cloud, companies profit from all the benefits of the cloud, but within their corporate firewall. A private cloud can either be operated internally or by an external cloud service provider. The important thing here is to know what level of innovation you can expect and what actual benefits private cloud brings to the business. In practice, the most common approach is the hybrid cloud model, a blend of public, private, and – as experience shows – traditional on-premise solutions.


Let us know what you think and follow us on twitter @SAPCloud and @SDenecken






Originally appeared in SAPNews

On-premise, Cloud or Hybrid: which is the best cloud approach. It all depends on what type of invitation you get. The most welcoming invitation to the Cloud is "Come as You Are": simple, non-disruptive and fast time to value.


It is The Season in England: Ascot, Wimbledon and of course Weddings. Each of these comes with the classic English engraved invitation which specifies the time and place. But often, down in the bottom right corner of the invitation is the Dress Code. Just like the variable English weather, this is enough to set everyone into panic.Come as you are.gif


I don't get many White Tie invitations, but this involves renting "bib and tucker" (tails), and for your wife we are at the level of ball gowns and tiaras. The more common Black Tie allows the male to dust off his trusty DJ ("tuxedo") even if it is now a bit tight, but again your companion is probably shopping for new shoes, bag and other accessories. All very stressful. The best type of invitation is one that says Come as You Are.  An invitation to "Come as You Are" means that you don't need to buy anything new, you don't need to upgrade your shoes or spend time doing your hair. It is the most welcoming invitation.


We often see the same thing with the invitations we get to the cloud.


Some solutions require wholesale change to your business process to use the cloud: this will certainly cost time and money. In today's fast-moving business environment everyone wants access to cloud innovations but doesn't want to necessarily to sweep away all their IT investments. What you want is an invitation to "Come as You Are": in cloud terminology this is called a Hybrid solution.


Business Networks are a great example of Cloud Innovation which fit into your existing IT Landscape, allowing you to keep some processes in-house (perhaps General Ledger and Inventory Management) yet still accessing business partners in the Cloud. Once you have connected all your systems to the network, you can evaluate the next phase: migrating the apps themselves to the cloud. For SAP customers, you can connect your SRM, PM, MM, FI, VIM and SNC systems to the Network quickly, getting huge value from the additional collaboration.

Come as you are fragment.jpg

Come as You Are. No need for expensive or time-consuming upgrades to take advantage of the connectivity and innovation of the Cloud. You can learn more about SAP's Cloud solutions at http://www.sap.com/pc/tech/cloud.html

Jon Reed and I met in the hotel lobby in Orlando on the day after the Sapphire had ended and had an interesting talk about all things Cloud. We neglected to tape image001.jpgthis conversation so we wanted to try and duplicate this interaction.  Last Friday night (late!), we met online for a long conversation about SAP’s cloud activities.  We had started out with a structure / topics to discuss but as the conversation progressed, we moved in a variety of unexpected directions and covered a bunch of fun topics (Simple Finance / Simple Suite and the SAP ecosystem, Cloud Foundry and the HANA Cloud Platform, the HANA Enterprise Cloud and customizations, etc).


There is a video of us talking (not too exciting – just talking heads) but I suggest listening to the podcast instead of watching the video.


The relaxed / informal conversation is one that we would have in a brewpub after a long day at some IT conference.  The advantage of the podcast is that you don’t struggle to hear the conversation in a room with other patrons screaming for more drinks.   The only things missing were the cold beer and tasty bar snacks.


Here is the link for the podcast.


[Image Source]

At a recent SAP All Cloud Connect event, Sven Denecken (GVP Cloud Solutions) presented a session entitled “Making Change Your Advantage”) that included slides that depict some shifts in SAP’s Cloud strategy.  I’d like to take a quick look at a few of these slides and provide some additional insight into why I find them interesting.


SAP Cloud Portfolio



Points of interest

  • SAP is moving from a very broad message (solutions in “HR, Customer, Procurement, Finance”) that was present as recently as Q1 2014 to a more specific message with new elements (“Supply Chain Management”, “SCM, PLM, Manufacturing”)  and more differentiated offers for other areas (commerce, customer engagement).
  • The inclusion of recent acquisitions of FieldGlass and hybris in the portfolio is an important addition and shows how the portfolio is evolving based on these purchases.  See Why is still missing but I don’t know if that acquisition has closed yet. My assumption is that it will be combined with hybris in the “omni-channel commerce” offering.
  • Currently, FieldGlass is only associated with Procurement offering.  I’d expect it to also be part of the HR offering along with SuccessFactors.
  • This is first time that I’m seen Manufacturing explicitly mentioned in the Cloud Portfolio.  There are already other active competitors in this area. I don’t know whether HANA Enterprise Cloud (HEC) Suite on Hana installations truly meet the requirements of this sector. I’d like to see a cloud-based version of MII.
  • I’m missing more of a focus on Industry (yes – I know CRM  on HANA for Industries is mentioned). At the Sapphire, the Industry Cloud was announced and I’d expect more industry-specific offerings. It could be that such offers originate from the ecosystem rather than SAP itself and thus aren't included in this slide.
  • The fact that Simple Finance is present in the HEC and the Public Cloud is a bit curious. I asked Sven about this on Twitter:



You might well be seeing Simple Finance on Azure or AWS at some point.  It might also be the first application of a series of “Simple” applications that could use this deployment option.  It is however a bit curious that ‘Suite on HANA’ won’t have the same deployment option – it appears to be restricted to the Managed Cloud.


Differentiating vs Non-differentiating Processes




Points of interest

  • Although I find the distinction between the two process types useful, I don’t know whether I agree in their association with a particular Cloud type (public vs. managed cloud).  I don’t understand why differentiating processes couldn’t be present in the Public Cloud. The definition of which processes are differentiating is also industry or perhaps customer-specific.  For example,  some companies (IT outsourcing companies?) might view, HCM as a differentiating process.  I also don’t know whether non-differentiating processes are so depicted based on the assumption that they are more highly standardized and thus more likely to be placed in a Public Cloud.  CRM.  for example, is described as being a non-differentiating process yet CRM on HANA is offered as part of the Managed Cloud.
  • Although the depiction of Managed Cloud and Industry Cloud together might be a bit confusing, the Industry Cloud would most likely be part of the HEC making the association more logical.


As I read this tweet from blogger Naomi Bloom, I was reminded of various conversations at the recent Sapphire conference about the impact of customization in cloud solutions.  Although Bloom’s tweet focused on SaaS, many of my conversations regarding this subject involved the HANA Enterprise Cloud (HEC) – SAP’s Managed Cloud solution.  I wanted to take a quick look at this subject.


In describing the transition of OnPremise customers to the newly announced Financials Add-on for SAP Business Suite Powered by SAP HANA, Hasso Plattner depicted the importance of retaining customizations.

We carry everything the customer has deployed on [SAP Business Suite] forward. Just looking at accounts receivables within SAP, we have 44 different layouts in our shared services center. Our users have defined them. We cannot ask customers to redo such customizations only because we want to move them forward to Simplified Finance. Their old transactions work on the simplified data model.  That's the first transition we did. The second transition is that we've put in a new application and a new accounts receivable line-item display into the system that carry forward the customizations of existing applications. So when customers go to the new applications, they will still see their layouts and will not lose their customized views. [SOURCE]

Yet in the same interview, Hasso  emphasized the importance of a  high level of standardization in cloud environments – in this case, the HEC.

Any of the larger ERP system are dedicated -- that's what I call it instead of "hosted" -- because they have to be standard systems. That have to be much more standardized, otherwise we do not get economies of scale.

Since the “Financials Add-on for SAP Business Suite” is also available as “SimpleFinance” on the HEC, this inherent conflict between customization and standardization caught my attention.


As the most recent SAP HEC for Projects Service Description Catalog demonstrates, this conflict is not only restricted to the new SimpleFinance offering. There are a variety of other customizations which are possible in this environment – many of which are the responsibility of the customer.


Other customizations, however,  can be outsourced to SAP for a fee:


I have no idea about the costs associated with such support but I assume that it is customer-specific and could be relatively high if extensive customization must be supported in the HEC.


Since this HEC-based customization has a financial impact on solutions hosted in this environment, customers have an incentive to respond accordingly. Owen Pettiford describes one strategy to deal with this dilemma: customers must reduce their customization as much as possible when moving to the HEC.

Review all your modifications and custom code and remove as much of this as possible whilst upgrading to the latest enhancement packages and support packs that are required for the switch to Simple Suite (I believe this is EhP 7 for ERP).

Since these customizations are often regarded by customers as representing their differentiating processes in relation to their competition, there is often a reluctance to remove them in response to the provider’s standardization requirements.


If customizations of such HEC-based application are still necessary / desired, what options are present?


HANA Cloud Platform as customization platform


One possibility is the use of HANA Cloud Platform (HCP) as an extensions platform that will allow customers to “personalize your SAP systems.

There are business blueprints to help customers during the HEC-related migration and on-boarding process move the appropriate customizing to the new platform but the ability of the HCP to cover some of the desired customizations is new and largely unexplored.


The HCP will be useful to personalize Fiori applications using OData streams from HEC-located applications. Despite the understood euphoria associated with this scenario, I’m not sure if the HCP-based applications will be able to cover all the customizations that are possible in the Business Suite. Only time will provide best-practice examples of which HEC-based customizations can be moved to the PaaS.


The ROI of such transitions to HCP will be interesting to watch since the involved increased subscriptions costs if customizations remain in the HEC must be compared to the associated implementation / maintenance costs of a HCP-based solution.  SAP must be interested in this shift away from the HEC towards HCP to reduce customization-related friction in the HEC and the promotion of the HCP as extensions platform.

I’m willing to bet that in the future Facebook will be nothing compared to a social network platform that is dedicated to Things.  Internet of Things (IoT) has been a buzz in the IT industry and the manufacturing community for some time.  The struggle with IoT is that it is trying to find a great marketing message about how it will directly improve human lives.  The primary focus in magazine articles, blog posts, and IT water cooler conversations has been about how to make IoT matter for people.


No matter how evolved we as humans have become, our fundamental instinct is to measure what is good as it relates to human benefit.  Self-admittedly I have been thinking about IoT in terms of personal benefit as well.  And for that reason I’m finding myself a bit reluctant to be super excited about the Internet of Things.


I've been wondering though if there is a possibility of benefit greater than that of the human. What if, machines just want to talk with other machines?  In the same way as someone who I have never met might be reading this and we are in some way connecting through thought and sharing of ideas.  Could the machine want the same thing as it relates to information?


I know the immediate response might be to think about SkyNet from the Terminator movies, but that’s really not where I am trying to travel with this line of thinking.


For instance imagine a sprinkler system that today uses its own weather sensor to determine if it should turn off the sprinklers for the day due to rain.  Today that is a self-contained smart home device.  But if that same device was part of a social network and is listening to a local weather tower outfitted with sensors and also part of that social network, than it could make a decision based on a much more sophisticated rain detector.  Suddenly the sprinkler is making decisions based on information from a social network service for the Internet of Things.


When ZipCar came to the market everyone started to really understand the concept of the “Collaborative Consumption” business model.  Again focused on a human’s ability to find benefit from a community based service. So now take the same idea, and imagine a world where machines could be better, based on a collaborative consumption of information from other Things.


The argument here is that device intelligence could be extremely limited if contained to the domain of a single manufacturer’s IoT cloud intelligence.  If sensor information is shared by all Things, than the level of intelligence within the device or the device manufacturer’s network does not need to be as sophisticated and therefore that expensive.  By leveraging information from various sources in a collaborative social network, this will create tremendous product capabilities beyond what any one manufacturer could create on their own.


This would result in a reduction in the overhead for any one manufacturer when creating intelligent devices. So where is the competitive advantage? It’s all about user experience, customer service, and the ability of the manufacturer to intelligently take advantage of the social network.


IoT Social Network.jpg

Devices would send their sensor data to their manufacturer’s cloud and the IoT social network.  The manufacturer would be constantly analyzing data from the social network and from its device, resulting in intelligent instruction updates to the device.  OK I will give you this is highly simplified, but the idea is that a manufacturer will improve the device experience through a combination of information from the device as well as IoT social network.


Big data and analytics will be the centerpiece of this social network.  One might automatically assume the tech companies are going to be the best suited to provide this infrastructure and service, but I wonder if the manufacturing community in partnership can help create a platform. Whether a manufacturing consortium creates this or a tech company creates the IoT social network, it is clear that social networks will rule the future of IoT.


So I will end this post the same way it started by asking one simple question. Who is going to create the Social Network of Things?

Are you the one who wants to know the right questions to ask you potential cloud vendor?

Are you a techie who wants to understand modern  Cloud architecture  and don’t know where to start ?


If you are looking out for a cloud service provider for your SAP implementation or planning on a new SAP installation on Cloud , one of the best place to start is to look at their reference architectures(RA) . That applies even for technical people who want to understand the cloud best practices of a particular vendor .


Reference architectures represent the aggregate experience from several implementations and Best practices acquired over several implementations.


Every vendor whether its IBM,Oracle, HP, Vmware have published there own Reference architectures and they are in public domain.


IBM first published their Cloud computing reference architecture CCRA Version 2.0 on March 2010. It is a open group submission , SAP is a part of open group as well. In fact IBM Smart Cloud for SAP was built on the CCRA.


The US National institute of standards and technology( NIST ) followed up and came up with their standard which is an excellent resource to understand what to expect and thing to watch out for.. It architecturally complements the IBM CCRA in many ways though there are some additional actors and players in the NIST one .

NIST also lays more emphasis on a independent Security and privacy impact audit, not a surprise considering its a government entity


The idea behind these  reference architectures was to make a level playing field and to enable standards to help the consumers choose their vendors . The standards were also to provide confidence to the consumers that their applications would work in any cloud.


Moving your SAP landscape into cloud is a long term investment and its highly important to understand what the vendor stands for and the best practices with respect to Security , resilience and governance. It will be of help to read and comprehend the vendors Reference architecture as it contains all the fundamental components that make up their Cloud computing environment.


If you look at NIST's RA it  follows the actor/role based model of defining the architecture . The NIST reference architecture is more focused on the “ What is needed “ aspect rather than a specific cloud implementation .


On the other hand  the IBM Cloud computing reference architecture (CCRA) is kinda dynamic in that sense since it evolves dynamically with inputs from IBM research and the delivery teams and contains a lot of artifacts and work products to describe the “how”.

Both these RA's are a good source to understand about cloud architectures overall .

Comprehensive details of their Reference architecture can be found in the NIST website (www.nist.gov/customcf/get_pdf.cfm?pub_id=909505) and The IBM CCRA open group submission can be found (http://www.opengroup.org/cloudcomputing/uploads/40/23840/CCRA.IBMSubmission.02282011.doc)


Most of SAP Cloud partners have published their  reference architectures as well and its all in the public domain.

Insights that you can gain from the Reference architectures..


  • Elaboration on the various roles and elements within the role.
  • Important considerations for Service Providers,Consumers and Creator /Cloud Brokers
  • Importance of a Vendor neutral approach in Cloud
  • Importance of Support for open standards in Cloud
  • How comprehensive is their Security , resilience and consumability features
  • What are their standards for data portability and service interoperability
  • Design philosophy for cloud scale efficiency
  • How is consumer self service and integration into the Cloud handled.
  • Ecosystem support
  • The Cloud computing management platform and the tools involved
  • lean and automated service management and how important are they to achieve the cloud scale efficiency


These reference architectures lays a good foundation for further discussion with your cloud Service providers and to ask the right questions.


Compare and contrast these Reference architectures so when you meet your service provider you know the right questions to ask both interms of Services provided as well as their Architectural philosophy.

Two recent sessions at the Cloud Foundry (CF) Summit provide some interesting insights into possible developments concerning the HANA Cloud Platform (HCP). The first session was entitled “Future of Enterprise PaaS” from Steve Winkler and Dirk Basenach. The second session was entitled “Commerce as a Service with Cloud Foundry” from Hybris’ René Welches.

I’ve blogged about HCP and the Cloud Foundry in the past but the new material provides some additional insights into the potential synergies between HCP and CF.


Here is the session from Winkler and Basenach:



There was one slide in particular from Basenach’s presentation that must be examined in more detail.




Let’s take a closer look at some of the important points:


  • Hybris on the HCP

Although I’ve blogged about the possibility of Hybris running on HCP, I’ve never see any official material about such migration efforts.


  • Use of CF services in the existing platform

One of the most important insights is the presence of CF-based microservices in the existing landscape.

My assumption is that this sceanrio would only work if the HCP was based on CF (more on this topic later).


  • Common API Layer

I’ve been thinking about what the depicted “common API layer” might contain. I think we should be looking for some sort of API Gateway in the near future in the HCP.

The API gateway sits between the application’s clients and the microservices. It provides APIs that are tailored to the client. The API gateway provides a coarse-grained API to mobile clients and a finer-grained API to desktop clients that use a high-performance network. In this example, the desktop clients makes multiple requests to retrieve information about a product, where as a mobile client makes a single request.

The API gateway handles incoming requests by making requests to some number of microservices over the high-performance LAN. Netflix, for example, describes how each request fans out to on average six backend services. In this example, fine-grained requests from a desktop client are simply proxied to the corresponding service, whereas each coarse-grained request from a mobile client is handled by aggregating the results of calling multiple services. [SOURCE]

An API Gateway would complement the existing Fiori / OData / mobile story.


  • Domain-specific Hybris microservices

The microservices mentioned above originate from Hybris’ Commerce as a Service efforts (YaaS).

[y]aaS is a multi-tenant cloud platform which allows everyone to easily develop, extend and sell commerce services and apps. [y]aaS is based on a steadily growing micro service architecture running on Cloud Foundry as foundation. All services within [y]aaS are exposed through a consistent RESTful API. Besides the API, [y]aas also includes a Marketplace for hybris services as well as 3rd party services, an On Demand Store Front and a Back office application, all running on Cloud Foundry. [SOURCE]




What is interesting is that they reflect a particular domain (in this e-commerce) rather than technology (mobile, ID Service, etc) as in the existing HCP services.


  • PaaS hosting by Customer and Partners

Currently, the HCP only runs in SAP Data Centers (DCs) –Basenach states that in the future the HCP might be able to run in private clouds (either in the DCs of customers or partners). I could imagine scenarios where partner-run HANA Enterprise Cloud instances could be complemented with HCP PaaS instances in the same environments.

Virgo and the transition to Cloud Foundry

In his presentation at the CF Summit, Basenach mentions something very interesting about the future of CF.


SAP "We expect @cloudfoundry to become the Linux of the cloud era" #cfsummit

— James Watters (@wattersjames) June 10, 2014

I kept thinking about this statement and what it might mean in terms of SAP's PaaS strategy.


A step back

There is very little documentation about the internal HCP architecture but I found an old drawing that provides some details.


Matthias Steiner confirmed that this fundamental architecture still exists (with name changes and the presence of HANA).


The existing HCP architecture uses the Eclipse Virgo project as its foundation yet much of the lowest layer (“NW Cloud Infrastructure”) appears to be proprietary. This lowest layer is the best candidate for a shift to CF.


The Virgo project has had its share of problems including a change of leadership last year when long-time leader Glyn Normington left the project.


Interestingly, Normington works for Pivotal developing "buildpacks" for running Java applications. Indeed, he has already built a build-pack for Virgo for CF.  Thus, a HCP transition to CF appears possible (even with the continuation of the use of Virgo) though I have no idea regarding the efforts involved.


Why would SAP want to use CF in HCP?


The use of CF is currently booming and exciting things in the community are happening

The enterprise use of CF is increasing exponentially as demonstrated by a number of new offerings (IBM’s BlueMix, HP PaaS, etc). With this high level of activity, the re-use of a rapidly evolving feature-set is definitely preferable to a proprietary stack.


Features such as recently announced cooperation between Cloud Foundry and Docker (where Normington will also be working!) would also allow SAP / HCP to transition more easily towards the new container-focus in the PaaS arena.


Improve the ability of partners to host HCP instances

As mentioned above, HCP installations in private clouds are also planned. Partners would probably be more familiar with CloudFoundry-based PaaS’ operations rather than the proprietary PaaS stack currently in use in the HCP.  The active promotion of CF in such private clouds is also one of the contributions of SAP to the broader CF community.


Increase the developer ecosystem for HCP

HCP still uses a propriety command line interface to interact with the underlying Paas.  For example, here is the command concerning hot deployments:

neo hot-update --host us1.hana.ondemand.com --account myacc --application myapp --source samples/deploy_war/example.war  --user mymail@example.com --strategy replace-binaries

The use of a CF as the underlying PaaS framework would make the lives of developers easier in that there is a much larger community that already has experience with CF. For example, IBM’s CF-based BlueMix Paas, the deployment process uses the well-known CF commands.

SAP’s competitive advantage in the Cloud Foundry market

CF is just the fundamental technological framework for a PaaS. It is not, however, a PaaS offering that customers can purchase.  As mentioned above, there are a variety of CF-based PaaSs available.  Pivotal also has its own version of a CF-based offering entitled Pivotal Web Services.  Thus, the use of CF itself really isn’t the main selling point of such environments. Some vendors such as IBM with its BlueMix are pushing their proven IBM infrastructure (“Open Cloud Architecture”) with hard SLAs and global DCs as its competitive advantage.


In this environment with many CF-based PaaSs, how could a CF-based HCP distinguish itself?  Comparing the marketplace for Pivotal Web Services with its services that are focused on technology and the developer (Cloud Forge, IronMQ, SendGrid, etc), you already have something similar in HCP (HANA DBs, Hana Cloud Integration, SMP, etc). I think domain-specific / industry-specific microservices -  such as Hybris’ e-commerce services – must be the main focus to provide a competitive advantage.  This is an area that other vendors can’t cover. Imagine a microservice for supplier (Ariba-based) or employee (SuccessFactor-based) or contract-worker (FieldGlass-based) or invoice (HANA Enterprise Cloud ERP-based).  These are scenarios in which only SAP can truly excel.

In my previous blog about SAP Simple Finance I tried to give a high-level overview over this new solution launched at SAPPHIRE NOW 2014. Here is a short reminder that you can skip if you read my previous blog post and the associated comment trail SAP Simple Finance launched at SAPPHIRE NOW 2014


Summary: SAP Simple Finance is the result of a close collaboration with customers to identify the most complex functions and tasks in finance and make them simpler to consume and perform. SAP Simple Finance takes full advantage of the SAP HANA in-memory platform with new finance capabilities, offers a new user experience for easy access with SAP Fiori - all deployed in the SAP HANA Enterprise Cloud under a full subscription model making it easy for finance departments to adopt these solutions, accelerate their finance transformation and to deliver strategic outcomes to their business.


So now let's take a more detailed look at 5 concrete examples of innovations for driving simplicity:

(1) Intercompany reconciliations "on-the-fly"

With SAP Simple Finance, customers can replace the long running transactions and batch processes they might be using today for achieving intercompany reconciliations. SAP Simple Finance provides a unified, single general ledger that automatically achieves this reconciliation. This not only speeds up reconciliations, but also enables simulations and thereby enhances a company's ability to plan and stay ahead of the curve.


(2) Integrated Planning

SAP Simple Finance provides unified models for enterprise-wide financial planning and reporting scenarios on a single source of truth. This integration can eliminate any latency or discrepancies that might exist between operational systems and analytical or planning systems and it enhances a companies overall planning capabilities.

(3) New Cash Management

With the new cash management capabilities in SAP Finance, customers can analyse global bank balances and cash positions based on data from SAP and non-SAP systems so customers can take action to manage any risk exposures. This new ability is based on real-time connections to banks and local entities and minimizes any cash management risks that might be created by working with outdated, or manually updated spreadsheets.


(4) Single Source of Truth

SAP Simple Finance provides common source of information for transactions and analytics, regulatory and managerial accounting processes, eliminating the need for manual reconciliations. This eliminates any double work, costs and risks associated with running many, potentially redundant and separate systems and documents. Using a single source or truth minimizes complexity across Finance. It can eliminate lot of manual reconciliation efforts, and is a significant enabler for achieving a true real time enterprise.


(5) Reduced Data Footprint

With SAP Simple Finance, IT departments can drive massive simplification using the capabilities of SAP HANA. By removing data redundancies and pregenerated aggregates, customers can achieve a reduced data footprint and increased throughput. Eliminating the need for a large number of redundant aggregates, tables, indexes, and totals, etc. simplifies the overall system, minimizes the potential for latencies and errors and allows customers to respond to change faster and more consistently across the organization.


SAP Simple Finance is targeted for deployment in the SAP HANA Enterprise Cloud to progressively add the simplified consumption and end to end user experience of cloud based applications. SAP, however, continues to provide our customers choice in terms of deployment models and speed of change for the overall finance solution portfolio. Customers can move their SAP HANA-based Finance landscape to the SAP HANA Enterprise Cloud or deploy the SAP HANA optimized Finance functions on top of their on-premise landscape leveraging the financials add-on for SAP Business Suite powered by SAP HANA as an example. New customers can just go directly to the SAP HANA Enterprise Cloud to consume SAP Simple Finance as a managed service in the SAP cloud, with some components of the SAP Simple Finance portfolio running in the public cloud, and other components running as a managed service in the SAP HANA Enterprise Cloud. In this way we increase our customers’ ability to extend their existing investments with the cloud to achieve new levels of efficiency and to enable new financial processes.


I hope this short blog has given you some more useful detail about SAP Simple Finance, and I look forward to your questions and to our continued dialogue.


"Oh boy", you are probably thinking, "another boring, rambling blog post on the future of the cloud". But then you see the picture of fishes in the ocean. And you are wondering "what does that have to do with cloud?". Let me explain why I chose this analogy to predict what's going to happen after the hype


around cloud computing has calmed down. If you imagine you could ask a fish about the concept of the "ocean", they would have a hard time understanding what you are talking about. Not just because they are fish, (and, therefore, by definition, they don't have a lot of skills or experience with having conversations about abstract concepts) but because they are living in the ocean, and, as a matter of fact, they are a part of an ocean. Fish depend critically on the existence of the ocean, they contribute to it, and to varying extent, are shaping the specific part of the ocean they are living in, without actually being able to understand it. That's why this concept reminds me to what's happening to Cloud Computing.

At this point, Cloud Computing is still largely defined by technical concepts, with vendors arguing about the differences between "public" and "private" clouds, and whether the various cloud flavours are truly and fully "cloudy" enough. This frenzied stage of buzzword wars and technological bickering is actually  quite normal for emerging IT concepts (e.g. Mainframes, Minis, Personal Computers, Desktop Publishing, Client/Server, Object-Oriented Languages, Internet, E-Commerce, Service-Oriented Architectures, ..).  But, sure enough, this phase will pass and another high-tech band wagon will roll into town. And I am loathe to throw my hat in the ring trying to predict which will be the next buzzword to take the IT-world by storm. I, for once, cannot wait until the hype around "Cloud" has subsided, until the "peak of inflated expectations", as Gartner Group calls this stage, has truly passed. I think we are getting very close to this stage.

So, what I really meant to express with this blog post is this:

  • The hype around the buzzword "cloud" is about to subside because it has gone past the peak of inflated expectations.
  • The "cloud" is here to stay, and is becoming a mainsteam concept because it delivers speed, simplicity and flexibility (which is what people want).
  • Like fish that live in & contribute to & are defined by an ocean, software will live in & contribute to & will be defined by the cloud or whatever concept comes next
  • Like fish (that are surrounded by the ocean without being able to define it) people will be surrounded, serviced and supported by the "Cloud" without actually being aware of it


Like I said before, I am somewhat hesitant to predict the next buzzword that will take the place of "cloud" on the winners pedestal of hype. But, for purpose of finishing this blog's train of thought, I'd like to pick a term: "The Grid". The term "Grid" has been around for a time, and has a reasonable chance to acquire an increased share of IT fame in the next 5 to 10 years. So let's assume, for the sake of argument, that "The Grid" is about to emerge as the concept to replace "Cloud Computing" as term-de-jour in the industry. What will be the main attributes of "The Grid"?


The "Grid" will come in 5 layers, each of which are interlinked and essential to deliver the next evolution of Information Technology. The 5 layers are listed from the physical to the more abstract/logical levels:

  • The Power Grid -- essentially delivering the electrons we need to run our devices, in an increasingly decentralized and sustainable format, allowing devices to be "always on".
  • The Connection Grid --- essentially delivering the networking capabilities to connect everything and everybody everywhere, with less and less effort, allowing everybody and everything to be "always connected".
  • The Data Grid --- essentially providing massive, real-time bit feeds to billions of consumers (people, applications, machines, devices, things, ...), allowing people and things to be "always informed".
  • The Semantic Grid -- essentially providing the "meaning" behind data to allow secure access controls, translations, transformations and exchanges in an increasingly open an shared format, allowing people and things to be "always enabled".
  • The Service Grid -- essentially providing the services (physical and logical) to deliver value to the processing points, be it in the form of labor or software applications services, allowing people and things to be "always empowered".


So as we move from "The Cloud" to "The Grid", the requirements on a software developer like SAP are changing massively and extremely rapidly. While we can still leverage over 42 years of experience of providing the software that is literally running a major portion of the planets processes, our software will have to evolve to comply with the requirements of the emerging Grid. For me, that is the true meaning of our statement that SAP is the Cloud Company powered by SAP HANA. This is not simply about the cloud, or simply about SAP HANA. This is about understanding, driving, and defining the next stage of information technology for a world in which hundreds of billions of networked people and things are always on, always connected, always informed, always enabled and always empowered. It's about taking complexity and turning it into something simple, so information technology can turn into an "ocean of potential" we can tap into without even being aware of it, or having to to explain or define it.


I look forward to that journey




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