SAP's Cloud Chaos Offering with Hybrid Cloud - Brightwork Research & Analysis

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Executive Summary

SAP has created a highly chaotic offering related to its cloud.
In this article, we cover the impact of SAP’s highly confusing cloud cocktail.

Introduction

I was recently reading the options for SAP’s hybrid cloud. It struck me as incredibly complicated. A hybrid cloud is a term that is thrown around at the conference and in sales meetings. However its implementation implications details are left out of the discussion. I spent some time thinking through all of these details, and there are a vast number of consequences to using a hybrid cloud.

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Selling All Choice as a Universal Virtue

Something that SAP marketing is gravitating towards is emphasizing choice, but without providing the context. Having more options is not a universal virtue. Some options are bad ones. One does have a choice to fly, drive or bicycle from Los Angeles to Phoenix. But let us be honest, no one bicycles from Los Angeles to Phoenix. It will take forever, and you would probably die in the desert in between. Alternatively, a gun can be pointed away from your body, or the weapon can be pointed towards your body. Both are options. But really, away from your body leads to better outcomes.

SAP presents options that, in many cases, are not good. And there is another downside. The more options that are submitted by an account representative, particularly if you don’t understand all the implications of choice, the more the account rep has the advantage. This topic comes up all the time during SAP sales calls. SAP is continuously offering new things. However, many of the things that SAP offers end up not working out, and they disappear. Does anyone remember SAP PLM? How about SAP Run Simple? I have cataloged these items over some years. Others with experience in SAP will observe the same.

So, as an SAP customer, you want healthy choices presented to you. Not simply endless buffets, where one out of the three items will end up making you sick.

As a corporate buyer – after choosing to say use S/4HANA (or as I like to call it – “just S4” – let us not start putting the names of databases in applications, please). Then has to perform an analysis where they determine what portions of the applications will be hosted (say the customized pieces?) and what will be on-premises. On top of this analysis, one must work out the integration between these components. Who wants to do that? Along the way, the customer must determine what integration SAP can offer the company (say the hosted Sales module in S4 has a connector to the on-premises Supply Chain module) and then test these were. This seems like a ton of work and reminds me of the SAP material I read about Fiori, where SAP proposes that customers can begin developing their apps — starting what amounts to custom development shops in their companies. This is the current sales pitch on SAPUI5 that I find quite disingenuous. (SAPUI5 is just a development environment. There is a place for custom UIs, but it is important not to confuse a finished UI with a development environment.)

And Everyone Agrees!

If we look at the material offered by SAP partners — it’s just restatement of the same options in the SAP literature about the hybrid cloud. Why putting your consulting letterhead onto something that is written by someone else? There is no interpretation of the material that I could find. Those of you who were waiting for a consulting company to help you objectively make sense of this mess, prepare to…..keep waiting.

Here is an example of a quotation from an SAP “bobblehead” partner that delves into the hybrid concept.

“There is a third group of customers as well, enterprise-scale customers and others who are interested in rapid business transformation at a reduced up-front cost. A hybrid model – utilizing both on-premise and cloud delivery – allows them to maintain core data and applications in-house, while being able to leverage the cloud to quickly change and adapt to new opportunities for process improvement – such as incorporating mobile devices into their business processes – without the additional upfront expenses of a full-blown software license and implementation.” – Blue Harbors

So let’s unpack this. Now part of the application will be in the cloud, and part will be on-premises. How confusing. I suppose the deciding factor is that one chooses the most customized parts of the SAP application and chooses to host those.

This is covered in another Blue Harbor quotation.

“For larger, more established enterprises, the on-premise delivery model makes sense. The fact that the system lives in-house instead of on the cloud allows for greater control and more customization to meet the needs of businesses whose processes are already well established.”

“Think of SAP’s HANA Enterprise Cloud as Infrastructure-as-a-Service plus managed services for SAP software (customers can also run custom SAP HANA apps as well as software for select third-party apps OK’ed by SAP).” – Blue Harbors

What is Real The Need?

I do not see any evidence that companies need to begin considering “hybrid” clouds for SAP software. No doubt, Blue Harbor would like to be your project psychologist for this disastrous design that will quite significantly increase the risk of the overall project. Is Blue Harbor, even considering how much more complex this makes these projects? Is the problem on SAP projects that they are not complicated and risky enough that we need to push the envelope?

Using this third option massively increases complexity for the corporate buyer and has unknown/untold implications for complexity. And what is the benefit of all this complexity? It is never stated. This falls under the “more options” rubric.

Think of the decision tree that a hybrid cloud creates.

Select what portions of the SAP application should be on-premises and which should be in the cloud.
Then integrate the parts of the SAP application that are in the cloud versus those that are on-premises.
Evaluate the integration/connector that is part of the SAP hybrid solution. (because you cannot trust the state of the connector by listening to SAP sales)

Etc…

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Conclusion

SAP’s new direction, in many cases, dilutes one of its primary value propositions. That is its “out of the box integration.” In reality, the only part of SAP that was integrated “out of the box” was the ERP suite. The ERP modules all share the same database, sit on the same server, etc..

All the other SAP applications have all are connected with adapters. That is adapters that, in many cases, were/are no more integrated than the adapters of different vendors to SAP.

Indeed, entire applications can be on-premises or cloud. The hybrid cloud needlessly confuses the question of the delivery method. And it does so in a way that only puts another confusing layer on top of a set of choices that is already complicated enough. For these reasons, I would suggest rejecting SAP’s recommendation or the option of using a hybrid cloud.