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A Road to the Cloud

September 15, 2021 | Industry trends

Simon Ratcliffe

Simon Ratcliffe
Principal Consultant, Advisory

When safety equipment company Arco discovered there were plans to construct a major road through their offices and Data Centre, they knew they had to accelerate their plans to take SAP into Azure.  Azure had already been chosen as the best fit public cloud platform and Arco themselves had adopted a cloud first strategy for all new services some years before, but the advent of the new road moved a lot of dates forward. 

Although their immediate motivation may be unique, Arco are far from being alone in taking their ERP to the cloud.  Research by Computing1 shows that 26% of those surveyed have actually completed their ERP to the cloud migration, whilst only 2% have no intention and everybody else being somewhere along the journey.  In two years’, many more expect to have completed and so it is fair to say that the sunset is coming for on-premise ERP solutions.  This trend is interesting given that ERP has traditionally been a stalwart of the data centre, so what is driving the change in thinking? 

Ensono’s experience shows that companies are less worried about the concept of ERP in the cloud now, especially with the availability of plenty of case studies and reference architectures and so cloud migration becomes less of an issue.  This is then supported by many other applications moving to the cloud which releases valuable capital and also provides more effective solutions for disaster recovery and infrastructure scalability.  Once on the public cloud, re-factoring components for HANA becomes easier and having flexible development and test environments means progressing SAP systems is simpler. 

Facing the challenges 

The Computing research highlighted an interesting difference between those that have migrated and those that are yet to complete the journey.  Whilst both groups indicated that their biggest challenges were the complexity of their current environments and the lack of skills to migrate and then operate on Azure, those that have not yet migrated cited cost as a significant factor whilst those that have completed migration did not highlight this.  This suggests that costs are not as high as expected before the project begins. 

In order to address the complexity, Arco undertook a complete assessment of their data centre environment, identifying all the servers, services, components, connections and dependencies.  Like many organisations, their documentation had become incomplete over time and they knew it was absolutely key to comprehensively map out their current environment before any attempt was made to move it.  The assessment data was fed into the Ensono SAP Transform Framework which contains mechanisms for parallel Azure and SAP designs and uses proven reference architectures to provide an initial view of the environment and the associated cost in Azure. 

Surprising news about costs 

Arco recognised that an Azure environment was not the cheapest option for them, but the other benefits outweighed the direct cost disadvantages.  Arco also found that although costs are all published, there are so many less than obvious costs in the cloud, such as data egress charges, that they allowed a contingency of 25% within their business case.  When the systems settled and good practices such as Reserved Instances and Hybrid Use Benefits were established, then costs became more realistic. 

The Computing research shows that an overall reduction in operating costs was the number one reason for migrating SAP to the cloud and responses suggest that the majority of those who have completed the migration have realised this benefit.  So, although the migration to Azure may not, on the face of it, be the cheapest option, it does seem to consistently deliver overall cost benefits when it is executed.  The research also produced the interesting fact that over 90% of respondents believed that the benefits derived from a migration of SAP to the cloud outweighed the challenges they had executing the project. 

Arco realised a number of immediate benefits.  They can now very easily ramp up capacity for testing and development work, so the scalability delivers agility into their environment.  Security is a significant benefit as it becomes easier to create separate environments to test patches and, therefore, be able to apply them more quickly and disaster recovery is more easily tested.  Arco has been looking to pursue ISO:27001 before the migration but are far more confident of achieving it post the migration to the cloud.  The Azure environment also provides them with significantly more granular cost information, and they can now analyse the costs of the different areas of the business.  Whilst re-charging the costs is not yet on the agenda, the base mechanism already allows cost recognition and awareness. 

Finding the right partner is crucial …. 

Arco selected Ensono because they were one of the very few organisations who could offer both Azure and SAP skills in-house and also had a proven track record in delivering this type of migration.  Skill shortages were cited as one of the key problem areas with migrations of SAP to the cloud in the Computing research1 and so finding the right partner becomes absolutely critical.  The combined Arco – Ensono teams worked extremely well together and, despite some early challenges with a difficult migration wave, the main systems were moved over a weekend and the users said afterwards they were not aware a change had been made.  Success is when the users don’t notice but the systems perform better. 

In conclusion … 

The key takeaways from this project and the Computing research suggest that there is still a critical skills shortage in the public cloud / SAP arena but that picking the right partner can deliver highly successful projects.  Accepting that the cloud is not necessarily the cheapest option but is one that can deliver flexibility and agility is important, as is understanding that not all migration waves will go entirely smoothly.  However, the more data that is collected about how the current systems are connected, the less likelihood there will be of disruption during the migration.   

It appears that those organisations that have completed their migration are very satisfied and are realising more benefits than they originally expected.  It seems as if ERP in the data centre is very much an idea that has fallen out of favour and that the benefits of migrating to the cloud outweigh the challenges of getting there. 

For more information on SAP migration to the cloud click here

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