Today, the world welcomes a new public cloud provider to play in the SAP space. That provider is none other than Google. This is exciting. No really, it’s exceptionally exciting. Why?
Well, not only because I've been lucky enough to experience SAP running on the platform first hand, but also because I genuinely believe it is a great product which is going to match those currently in the marketplace: Amazon EC2 and Microsoft Azure. This combined cloud competition is going to drive innovation and disruption... and let’s be honest, that has to be good for customers.
Enterprise applications in the cloud
Some would argue that Google has been playing catch up in the Infrastructure as a Service (IaaS) arena for a number of years. This is a fair statement given that Google only launched its Google Cloud Platform (GCP) in 2012, over six years after Amazon launched Amazon Web Services (AWS) and two years after Microsoft launched Microsoft Azure.
While GCP has always provided a good service, it has lacked credibility in the enterprise space largely because of the lack of certification for key enterprise applications like the ones from SAP. The launch of SAP HANA running on GCP signifies that it is ready for enterprise workloads, not just start-ups and internet organizations. Of course, the announcement that you can also run HANA Express edition on GCP means that it isn’t just enterprise customers that are being targeted by SAP. A match made in heaven? You decide.
With the move to SAP HANA expected to increase far beyond its already impressive numbers over the next two years, largely driven by SAP S/4HANA and SAP BW/4HANA, customers will be taking a serious look at where they want to place their enterprise applications. With three excellent options in the public cloud space, customers are now spoilt for choice.
Driving down costs
For companies who have already decided to move their SAP landscape to the public cloud, this increase in choice will no doubt bring about price wars. Looking at the costs for various high memory options on the three platforms, you’ll see a large variation:
Although these prices give you a good baseline, costing on these cloud platforms isn’t straightforward. There are options which can affect prices e.g. a 30% discount for signing up to AWS for an extended period, or the sustained usage discounts which Google provides.
You can expect these price differences to change over time and even themselves out. Nevertheless the increased competition is creating a buyers market for cloud services and one where negotiation will no doubt be a possibility.
The gap in functionality between cloud providers is going to rapidly decrease. When it comes to running SAP on its platform, Amazon has been leading the charge to date. They have offered greater functionality such as automatic high availability failover using CloudWatch and a wider range of instance sizes. Microsoft is catching up quickly and Google has now entered the race. Given the R&D budgets of Microsoft and Google, you can expect them to aggressively enhance their respective platforms.
Each provider has its own differentiator. AWS, for example, can host up to 2TB virtual machines for SAP HANA. On Microsoft Azure, you can purchase a 4TB Suite on HANA or S/4HANA instances.
You can expect that each provider will want to eliminate the competition's differentiator, while searching for new ones. I fully anticipate Amazon and Google to launch larger instances to ensure they are competitive.
The question is, what comes next? If I were a betting man I would say SAP integration into other cloud services. It feels like there is an opportunity for Dataproc, BigQuery or HDInsight integration to the SAP stack.
The silver lining
Global spending on public cloud services is set to grow to $141B in 2019, from the $70B that was spent in 2015*. The uptake in this area is going to be exponential. The changes we’ll see in the market over the next twelve months will transform enterprise applications on the public cloud, benefiting both current and potential cloud customers alike.
Now is the time to be looking at your cloud strategy and understanding how it fits into your digital roadmap. As the only service provider in the world to have experience in running SAP on the three major public cloud providers, we are here to ensure you make the right choices based on your unique business requirements. To register your interest in a free Discovery workshop, fill out the form below.