SAP Senior Vice President Clay Caldwell expects the new customer edition of SAP HANA Enterprise Cloud on Hewlett Packard Enterprise’s GreenLake cloud service to appeal to the “majority” of the SAP installed base. ”There is still a large segment of our customer population that would prefer to be in their own data center,” he said.
When SAP conducted a survey to see just how strong the appetite was for an on-premises private cloud version of SAP Enterprise Cloud and related SAP S/4HANA licenses, it was surprised at the number of customers that wanted to run the complex application in their own data center.
“The feedback was far greater across all geographies and across multiple industries than what we expected,” said Clay Caldwell (pictured), senior vice president and global general manager, HANA Enterprise Cloud at SAP, in an interview with CRN. “It wasn’t simply around the opportunity to offer data sovereignty or compliance offering. It was more broad-based. There is still a large segment of our customer population that would prefer to be in their own data center.”
That’s the reason SAP is teaming with Hewlett Packard Enterprise on the launch of the new customer edition of SAP HANA Enterprise Cloud on the HPE GreenLake on-premises cloud service.
SAP said the new offering is a direct response to customers who want the flexibility and service of a managed private cloud but want to keep their systems in their own data centers. Customers also have the option of using a colocation facility or running it at the edge.
Caldwell expects the new SAP HPE GreenLake service to appeal to the “majority” of the SAP customer population. “The interest has been fantastic,” he said.
HPE will supply, install and manage the infrastructure, while SAP will provide application management services and expertise on integration from the operating system to the database to the cloud.
One reason SAP teamed with HPE is to offer a broad-based midmarket T-shirt-size offering that goes well beyond the large, multimillion-dollar SAP engagements. In fact, there is no steep minimum contractual commitment for the SAP HPE GreenLake service.
“The great thing about the GreenLake offering is we have T-shirt sizes-small, medium, and large,” said SAP Executive Vice President and Global Head of Enterprise Cloud Services Peter Pluim. “You can grow along with it. It will basically be around the same pricing that we have today for customers in our own data center or in a hyperscaler.”
HPE has created a “component-based pricing model” for the SAP HPE GreenLake cloud service so customers can pay as they grow in the SAP ERP application environment, said Sunil Patel, head of the global SAP and Deloitte GTM (Go To Market), Alliance and Ecosystem Sales for HPE.
The SAP HPE GreenLake offering comes just two months after HPE launched T-shirt size offerings of GreenLake as part of a move to a group of 17 “building block” offerings for small, medium, and large businesses.
The SAP HPE GreenLake cloud service removes a “huge barrier” for customers contemplating modernizing their SAP environments, said Patel.
“We did an analysis of our HPE installed base running SAP on legacy systems, and I will tell you there is a very high percentage of those that are due to modernizing,” he said.
The on-premises private cloud SAP sales offensive is the brainchild of Pluim, who joined the German software maker 15 months ago after heading up infrastructure and data management services for $13.6 billion systems integration behemoth Atos.
Under Pluim’s leadership, SAP has nearly doubled the amount of SAP cloud customers. “The demand for customers to move to an Opex model and also just get rid of the whole hassle so they can focus on becoming agile and resilient and not have to worry about the IT side of it is enormous,” he said.
SAP now has more than 1,200 customers operating its ERP application in an SAP-managed private cloud model, said Pluim. Seventy percent of those customers run the ERP application in one of SAP’s 15 data centers around the world.
SAP expects to increase the number of customers running SAP in a private cloud by at least 10 percent over the next several years in the wake of the new HPE GreenLake service.
SAP will begin aggressively selling the HPE GreenLake cloud service in the fourth quarter with delivery expected in the first quarter next year.
“The unique value is we deliver an almost SaaS-like experience completely tailored to the customer’s need,” said Pluim. “We basically create our own little hyperscaler environment for the customers in this data center with all of the expertise of SAP on top. That is the unique value we are providing in an Opex model.”
The SAP HPE GreenLake offer ultimately lets customers focus on their business rather than the nuts and bolts of their IT operations, said Pluim.
“What is very important here is there are so many moving parts. This allows customers to focus on what they really need to focus on—which is what they actually do with all of this IT stuff instead of worrying about the IT stuff themselves,” said Pluim.
One of the biggest drivers for the on-premises deployment is the astronomical investment in applications that run in a complex enterprise environment. Most enterprise customers have anywhere from 3,000 to 10,000 enterprise applications.
“I worked with a customer who has invested and calculated over 30 years nearly $1 billion in software development for those applications,” said Pluim. Those applications have latency requirements, firewall connectivity, use protocols that are half-dead. All in all, there is no business case for those customers to say, ‘I am going to kill all that software development and I am going to go micro-services and create everything from scratch.’ There is no case. That is billions in software costs.”
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