RISE with SAP –Impact to SAP partners and user deployment choices?

“RISE with SAP” is the latest initiative announced to bring together some existing trends already in play, as well as unveiling some major commercial changes. I thought that it would be helpful to take a look at some of these in further detail to try and understand where the real value lies and the potential impact for users. This article considers the impact to SAP partners and explores how it will affect SAP user's deployment choices. This part 2 follows my previous article that looked at the business implications “RISE with SAP– What’s the impact to SAP user's commercial terms?”.

 User Deployment Choices

Customers have so far been slower to move their SAP environments to cloud than SAP and the other Hyperscale cloud providers would have liked. Microsoft commissioned Forrester last year to find out how many organisations had moved core systems like SAP to cloud and the reasons holding them back. The research found that 70% of Azure customers had yet to move their core systems to cloud.  Organisations have already learnt a lot of lessons from moving their general applications/workloads to cloud. They understand the many potential benefits cloud brings, however they also know the potential pitfalls and implications of running a non-optimised environment [See article Mistakes moving to cloud: the stakes get higher]. Most companies will eventually move all their core/system applications to cloud, however it will not be all at once and is likely be spread over many years -leveraging a ‘best of both worlds’ hybrid cloud environment in their journey.

SAP have realised this and are now embracing this with their extended maintenance of the pre-HANA suite to 2027/2030 last year. They have also expanded the role that Hyperscale vendors play to increase the choices available including the Data Centre locations available to run SAP cloud services.

However, accepting the offer from RISE which replaces the traditional model [separate SAP perpetual licenses + annual maintenance] with a new subscription-based SAP cloud service(s), will force users away from managing and controlling their own deployments. Without access to application licenses that can be installed in the customer’s own environments and managed by the user, or their MSP of choice, then this deployment option becomes no longer available. SAP customers will no longer be able to deploy their own SAP environments in any public cloud instances or on-prem infrastructure under user control.

A significant development on SAP deployment hybrid choices, is the on-prem deployment option that was recently announced for HEC CE “Customer Edition”. SAP HANA Enterprise Cloud (HEC) launched back in 2013 was SAP’s original cloud infrastructure cloud service. However, by now extending HEC to include infrastructure in the customer’s own Data Centre or located on customer premises is a big change. With HEC Hybrid, both SAP cloud and the on-premises environments are part of the HEC service that is purchased from SAP and both are thus under SAP control.

The role of Partners

Many SAP landscapes have evolved to become quite complex systems which add to the challenges of migrating or updating them. Organisations often consider starting completely afresh with a new ERP, and roll out a greenfield deployment in order to avoid the headache of untangling old processes.

SAP do not want to repeat this complexity cycle and by adopting a policy of only developing a generic, unmodified core they provide simplicity that utilises extra add-ons and extensions to be implemented by partners to deliver the variety required. This approach uses their “Industry Cloud” umbrella to cater for 25 industry sectors with SAP partners permitted more access to develop solutions for the client. SAP Business Transformation Platform and even some SaaS services will allow partners more capabilities to tweak the solution as required for different industry needs.

This latest HEC CE offering is only currently available from their two longstanding partners Lenovo and HPE. Integrating geo dispersed elements to operate as a homogeneous environment presents various technical challenges. SAP chose two of their most experienced SAP vendors to work with them to develop and establish how the system elements would interoperate efficiently. Working closely with this small syndicate of experienced partners allowed the solution to be refined together and ensure users get the seamless experience required from their hybrid cloud solution.

SAP Partners are being encouraged to develop their IPR with APIs and customisations to facilitate this plan as well as enable them to differentiate themselves in the market.

Conclusion

Technical aspects of integrating different HEC elements will require in-depth detailed knowledge that can only come from a collaboration between SAP and their top partners. Only announcing Lenovo and HPE for HEC at this stage makes sense while the finer details are being worked out.

Leading large S/4HANA projects from the top will give SAP the control they need to appoint appropriate partners, govern what they deliver and control how they work together. Achieving and delivering the 'simplicity' promised from a unified HANA system may require this commanding approach. Perhaps with SAP in the driving seat they will be able to coordinate the different partners, skills and knowledge required to ensure the customer's new S/4HANA system delivers the agility needed. S/4HANA is a complex system that operates in a market full of different choices and competing directions.

References

https://www.dhirubhai.net/pulse/rise-sap-whats-impact-users-commercial-terms-david-penny/

https://www.sap.com/products/rise.html

https://www.dhirubhai.net/pulse/agility-real-benefit-hana-david-penny/

https://www.dhirubhai.net/pulse/mistakes-moving-cloud-stakes-get-higher-david-penny/

https://www.dhirubhai.net/pulse/what-actually-all-different-sap-clouds-david-penny/

https://news.sap.com/2020/10/sap-hana-enterprise-cloud-customer-edition-ready-for-business/