Cloud Computing - demise of 100,000's of SAP consultants - thoughts here

[Former Member]

Hi all

The latest buzzword in computing is "Cloud" computing. Whilst we might be a while off yet before this becomes commonplace especially for SAP users it is becoming more and more a reality in many businesses.

Communications technology, hardware and storage costs have so decreased in comparison to staffing / building / energy costs etc etc that this type of approach possibly is looking more and more viable.

The savings that can be made in not having to worry about Server uptime, applying patches, finding expensive short term consultants, dealing with "Off shored" call and support centers etc etc will begin to look ever more attractive to businesses trying to cut costs.

With really good hardware and proper virtualisation techniques it's possible to provide most of the services a "typical" SAP user would want at a cost (to the end user) far cheaper than it costs them now.

For SAP it's also a "No Brainer" since as operating systems,applications and most importantly the Customer Base matures one has to consider where the next income stream comes from.

Whilst this won't happen overnight and you will always have to have "Functional" consultants around this really is a WIN WIN situation both for SAP and the end user alike. The only people who would have to be retrained would be the current "Basis" teams who usually cost the most money in any case.

The end user would presumably (when its all up and running) get a nice uptodate system without any of the hassles of maintaining it and also be able to investigate and deploy new technologies without any major hardware investment whilst SAP would guarntee itself a continuing decent revenue stream.

This will take many years to achieve - maybe never 100% but it's certainly a viable business model for a great deal of customers running SAP who don't have huge or very complex operations right now.

Any thoughts - especially if you are likely to be effected by this.

Cheers

jimbo

[Former Member]

I just wanted to point out the [Cloud Computing wiki|https://wiki.sdn.sap.com/wiki/display/CloudComputing/Home] space that we've recently established here on SCN. Please have a look and feel free to contribute your thoughts there as well.

Cheers,

Steve

[Former Member]

Hi,

I just shared of SAP's work in this domain.

/people/frank.stienhans/blog/2009/04/28/cloud-computing-at-sap[/people/frank.stienhans/blog/2009/04/28/cloud-computing-at-sap|/people/frank.stienhans/blog/2009/04/28/cloud-computing-at-sap]

Would love to get your feedback.

Frank

[Former Member]

I agree that this is a really viable business model - and I also agree that substantial emergence of such a model would take some time. But as of the moment I don't see that entire system landscapes be awashed into a 'cloud computing' model. Perhaps, some of the components are friendlier to this business model - I'm thinking MI and perhaps Enterprise Portal to start with.

On a client (business) standpoint - you have a LOT to consider (issues & risks) if you are to migrate to this new model. Trully, it is cost-efficient - there's no doubt about that. But the migration costs could be a burden (nevertheless a short-term one). Secondly - there is the issue of data privacy - that can be of course stringently outlined in the SLA/Terms BUT would the business entities be comfortable with the idea of sensitive data hauled off to a third-party entity?

But - if data security risks are well managed, the benefits totally outweigh everything else.

Moreover, whoever implements this model - SHOULD have a behemouth a war chest to start it up.

At the moment, I can't imagine the financial figures requried to sustain Fortune company-size a market. It must be huge.

[Former Member]

Hi there

certainly some of the Smaller companies could use it right now -- Portals would immediately be a case in point -- a lot of users currently don't implement Portals because of Hardware / development costs but it would suit their business mode to be able to use these.

The Business 1 suite might also be a bit redundant had "The Cloud" become available earlier.

I recommend this read.

http://news.cnet.com/8301-19413_3-10196722-240.html

I can see why this sort of stuff interests Microsoft as it has to devise a new revenue stream -- Office has essentially matured and the looking good so far about to be publicly released Windows 7 RC (Release Candidate) is the last chink in it's current "cash cow". Windows and Office will provide diminishing returns in the future so they well may have a vested interest in this stuff.

I think traditional I.T depts won't like it for obvious reasons but it will be a while before "The Public" cloud is readily available and cost effective. They could start by creating an "Internal Cloud" to ease the transition.

Trusting "Remote" providers with Data isn't such an unusal step -- We all use Banks and government depts usually without too much of a problem.

The "Always On" concept isn't a problem either -- I'll bet a typical corporation running its own SAP system has probably more server outages (planned and unplanned) than some of these "Service" providers.

Just take your Mobile phone. How often these days is the Mobile Phone network down.

We are into a totally new era of Computing both in the way we use hardware and acess services.

Cheers

jimbo

[Former Member]

Small businesses - now that's an sound early stage market for this business model. Service provider side, a little less investment required than catering to bigger companies - client/customer, affordable SAP technology.

Actually, "Internal Cloud Computing" - I believe this one's just beside the next room. NetWeaver is a case in point. With transactions governed via Portal - and a robust centralized SAP System Landscape.. we're not too far off with this one.

-Jan