Three Options for the Hosted SAP Offering
Businesses that have come to rely on enterprise applications from vendors such as Oracle and SAP may believe that the complexity of their systems will prevent them from ever taking advantage of the benefits outsourcing those systems to the cloud.
And customers are gravitating towards the cloud, both for the nimbleness it offers them, the reduced capex it offers, as well as the reduction in complexity. Just look at SAP’s annual revenue decline for 2009 vs. cloud-based enterprise applications system Salesforce.com’s revenue increase for roughly the same period to see the difference.
Does that mean customers who have an existing investment in SAP applications are out of luck? Not at all. Witness IT solution provider Symmetry, which offers outsourced SAP infrastructure services to end customer companies.
Symmetry CEO Dan Wilhelms estimates that customers who switch to a hosted SAP model save about 30 percent over running it themselves in house.
Symmetry will provision new servers for customers or transfer their existing servers to Symmetry’s data center. Symmetry will then take over the complexity of managing, maintaining and administering the SAP system.
And it’s a business that’s growing, Wilhelms tells Channel Insider.
"There is a much greater interest in hosting and software as a service than there has been in years past," he says. "More and more companies are taking a hard look at their IT competencies."
Symmetry has provided has SAP technical administration services for the last 14 years from its center of excellence in Milwaukee, WI. But in the last two years the company has added a data center hosting component, enabling end customers to move all their hardware on software to Symmetry’s data center.
"Many clients had SAP servers hosted by third parties," Wilhelms says. "What we’ve found is that traditional hosting providers have business models that are not conducive to running SAP. Traditional hosting providers have relied on a shared infrastructure model where they buy large pieces of equipment and rent pieces to as many people as possible."
And while that may make sense for email or a simple database offering, SAP applications are too big and complex for such an arrangement. They can have thousands of users hundreds of terabytes of data.
"Our hosting model is designed around dedicated systems for each of our clients," Wilhelms says. "That allows clients to move their existing SAP servers to our environments rather than buying new infrastructure if they want to make a hosting decision."
Or they can buy new infrastructure, too. It’s up to the client. Wilhelm says Symmetry has been offering the hosted service as a production environment for about two years and about one third of customers move their existing equipment to Symmetry’s hosting service.
Over that time Symmetry has developed a system of best practices to ensure customers don’t experience any interruption in SAP uptime. Systems are moved to temporary servers at Symmetry’s data center. Then the customer’s hardware is moved to the Symmetry data center. Ultimately the customer’s equipment is brought back up to host the SAP system and data again. The whole process takes about eight weeks.
Symmetry offers its services to be consumed by businesses in the following three different ways:
- Symmetry physically moves the customer’s equipment to Symmetry’s data center,
- Symmetry provisions new equipment at its data center that the client owns but that stays at the Symmetry data center, or
- Symmetry purchases and owns the equipment and then rents it to customers over the length of the contract.
"We are seeing a fairly even split among the three options," Wilhelms says.
Large accounts are assigned a dedicated Symmetry technician. Smaller clients may share their technician with four or so other clients. In addition to the primary technician, teams of five to six administrators will support a group of clients to ensure customers get the best support experience.
Wilhelms says his customers are typically between $200 million and $1 billion businesses with 24 by 7 global operations but an IT staff of just one or two people with any SAP expertise.