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5/20/2011
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SAP Cloud Partnerships Expand On-Demand Options

Amazon, Dell, Verizon and China Telecom services deals highlight the app vendor's broad cloud-computing strategy.

Analytics Slideshow Calculating Cloud ROI
Analytics Slideshow Calculating Cloud ROI
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Analysts and the media tend to focus on Business ByDesign, the on-demand applications suite, as the centerpiece of SAP's cloud-computing strategy. But there's a growing list of on-demand activity beyond Business ByDesign, as witnessed by announcements at this week's SAP Sapphire Now conference concerning partnerships with several cloud-services providers.

In fresh deals with Amazon Web Services and Dell, SAP and these partners will offer applications on both public-cloud and private-cloud infrastructure, and the services promise the fast-scaling and pay-only-for-what-you-use flexibility associated with cloud computing. On the mobile front, telco giant Verizon has partnered with SAP to deliver the Sybase Unwired mobile application development platform and Afaria mobile device-management platform as services. Finally, SAP has partnered with China Telecom to become a Business ByDesign service provider, a move that will open up the suite to a big, high-growth market.

Any deal with Amazon, the largest infrastructure-as-a-service (IaaS) provider going, tends to get lots of attention, yet this deal wasn't even mentioned on stage at Sapphire. SAP issued a press release on Wednesday that it has certified its Rapid Deployment Solution (RDS) applications to run on Amazon's cloud.

RDS apps are slimmed-down, pre-configured versions of standard SAP applications, and there are now 14 in total, including RDS versions of CRM, sales and operations planning, warehouse management, supplier relationship management, and master data management applications. The latest RDS addition is a Hana/in-memory-based operational reporting application that was announced this week.

SAP said most of the RDS apps are now certified and deployable on Amazon's Elastic Compute Cloud (EC2). Also deployable on EC2 will be SAP BusinessObjects 4.0, the vendor's business intelligence suite.

The catch--and perhaps the reason the deal didn't get much attention this week--is that third-party service providers will be needed to migrate existing applications, deploy new applications, and provide ongoing application management services for apps running on EC2. What's more, SAP is still working on licensing and subscription plans, which it said will offer quickly scalable capacity and the ability to turn off (and stop paying for) unneeded capacity. SAP said all this will happen "in the coming months," and it has yet to name third-party services providers.

In contrast to how you would work with, say, Salesforce.com, SAP deployments on EC2 will require a relationship with SAP and another with a third-party services firm to handle the application and EC2 capacity management. That sounds a bit more complex than the usual on-demand subscription service, but Sanjay Poonen, SAP's President of Global Solutions, said Amazon's scale brings rock-bottom IaaS costs. For example, the combined cost of licensing, management services, and Amazon Web services for the RDS CRM app will be lower than the cost of subscribing to Salesforce.com, Poonen said.

Why put BusinessObjects in the cloud when SAP already offers Business Intelligence OnDemand? For one thing, the OnDemand service is not the same thing as a full-blown BI suite. With the Amazon option, organizations can migrate their conventional BI suites, and all the reports, dashboards, data models and other content they've created, over to EC2.

SAP is following rather than leading with its Amazon deal. Lawson Software, for one, already has customers running apps on EC2, and Lawson itself (a firm set to be acquired by Infor) handles all the migration and application management services.

Dell, which is a current hosting partner for SAP, announced Monday that it will add private-cloud and pubic-cloud options for running the vendor's applications. Dell said it can deploy private-cloud services on premises in a customer's data center, with flexible, automated provisioning of capacity through a portal. Or it can run the deployment in its own data center. Either way, Dell does the setup and ongoing application management.

The contrast between Dell's private-cloud option and conventional hosting (whether on-premises or in Dell's data center) is that customers can contract for their average compute capacity. In a conventional, on-premises deployment or hosted scenario, customers overbuy capacity, giving themselves 30% to 50% higher capacity than their average workload and at least 20% higher capacity than their expected peak workload, according to Dell. That assures adequate computing power for peak loads as well as headroom for growth.

Dell's public-cloud option, running from Dell data centers, is there to provide "burst" capacity that can come online quickly to handle peak workloads. Dell says this combination of private- and public-cloud services ensures lower cost for everyday needs with backup capacity to spare. The new cloud options for SAP apps are expected to be available by July.

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