SAP S/4HANA Cloud Strategy Trends

The evolution of employee expectations and management, organizational structures, operating models, and business and technology strategies has been covered extensively throughout 2021. In our September Executive Magazine, we wrote about SAP customers that are expanding and becoming global at an increasing rate against a backdrop of transformation. According to SAP’s Global Head of SAP Enterprise Adoption, companies are doing this to become more sustainable, resilient, and to perform better.

And we know from our March 2021 report, which surveyed our technology executive community, CIOs’ top priorities (increasing process efficiencies and supporting new business models) point to an overall strategy of growth and innovation as opposed to one of constraint.

These tactical approaches are occurring across industries and geographies and are accelerating the adoption of enterprise technology. Over half of leaders surveyed for our March report said that SAP S/4HANA will be their most strategic investment in the coming year, followed by analytics, artificial intelligence, and hyperscaler migrations. Technology adoption seems to be having a positive impact on business. According to one global market research company, companies see 15% improvement in user satisfaction and 51% improvement in their key business performance measures when their users are well enabled. However, technology adoption has also uncovered a skills gap.

SUSE’s Vice President, Solutions Technology, Markus Noga notices this challenge among his own customers that run SAP technology. “The challenges customers are seeing today are primarily around skill set and the ability to deal with the rapid pace of technological change,” he says. Relatedly, executives surveyed for our March report cited SAP S/4HANA as the most important SAP skill set they needed to add to their teams.

Noga acknowledges that skills related to emerging technologies play a role of increased significance as the term “mission-critical business” has been brought to form over the past year and a half.

“Who would have thought we could run out of things like noodles, toilet paper, or canned goods? Who could have imagined that the Suez Canal could be blocked, disrupting supply chains from China? No one could have imagined that a new vaccine would need to be developed so rapidly and distributed at such enormous scale in order to save lives,” Noga says. He refers to having the right digital platform for your business — and the expertise to exploit its capabilities — as a matter of survival.

Visibility is being re-imagined as well. As executives struggle to gain proper visibility into their operations and performance, malfunctions are being escalated to the board and C-suite level faster than ever, Noga says. More companies are experimenting with different tiers and flavors of cloud and taking greater risks to become more agile. Thus, it’s no surprise that external assistance and expertise around product competencies, automated tooling, upgrades, and best practices for set-up has arisen as a clear need.

Deploying SAP S/4HANA

More SAP customers are deploying SAP S/4HANA and deciding which environment best fits their plans. Noga says that the pace, scalability, and innovation provided by the public cloud “is certainly breathtaking.”

According to the SAP S/4HANA Deployment Approaches report that SAPinsider published in June 2021, fewer respondents said they planned to deploy SAP S/4HANA using a public cloud Infrastructure-as-a-Service (IaaS) environment compared to 2020 (see full results in Figure 1). Noga points out, however, that two new options were added between 2020 and 2021: RISE with SAP and a hybrid deployment with some private cloud and public cloud instances.

 

Figure 1 Cloud Strategy for SAP S/4HANA Deployment

 

Regarding customers choosing RISE with SAP, Noga says: “RISE with SAP is a logical continuation of the HANA enterprise cloud business that I helped launch during my time at SAP. It really started out with an idea of having a single throat to choke for the customer. I think RISE with SAP is taking that concept one level further, from an accountability perspective, making it attractive to customers.”

Noga muses that customers selection of a hybrid cloud environment is reflective of their becoming more discerning about what to put where. “They’re learning more now and doing things like development and test environments on public clouds where it’s less expensive. In addition, they’re also running production environments and more hardened, dedicated environments on private cloud where they can have more confidence in security or reach into the systems without having ‘noisy neighbors’ that on a public cloud might degrade your performance.”

Supporting A Hybrid Future

Noga says that hybrid environments are the future and, with that, so too are containers and Kubernetes. This belief, in addition to being an open-source company, is driving SUSE’s latest go-to market strategy.

SUSE Rancher, for example, aims to help companies implement their Kubernetes enterprise strategy. “It offers very strong hybrid cloud management capabilities,” Noga says. “SUSE offers the same functionality regardless of which environment you choose. We integrate our public cloud offerings more deeply with the hyperscalers’ technology stacks for things like monitoring. We have a new capability offering with Azure monitoring integration, for example, but in the end, SUSE will support its customers wherever they choose to go. And increasingly today this means public cloud.”

SUSE is currently working on a unique project that can help SAP application system administrators transition to public clouds, Noga says. Dubbed Trento, the open-source cloud-native web console aims to provide a maintenance-free infrastructure based on modern concepts like automated service discovery and automated operations, observability, and configuration-as-code.
“Trento is now with SUSE’s testing and key operations teams and is expected to be released near the end of 2021. It will be a unique differentiator for the way SUSE operates and delivers infrastructure for our customers,” Noga says.

What Does This Mean for SAPinsiders?

1. Plan where you run instances of SAP S/4HANA for impactful return on investment (ROI). Noga is seeing customers experiment with hybrid environments and believes this is the future for many. He cautions against developing mainly a business blueprint and leaving technical aspects for late in the project when deploying SAP S/4HANA, though. “It is a highly risky strategy. We’ve seen multiple large enterprises go live before they’ve planned their scale up, their scale-out, and their security, and it had negative consequences for the business and the project timeline.”
2. Support your cloud deployment with the proper security. SAPinsider’s research shows that many customers are deploying some instances of SAP S/4HANA in the cloud. Increased adoption of cloud-based applications means more potential access points. In fact, cyber attacks have been identified by our community as the No. 1 security concern related to cloud deployments. Noga says that SUSE is proud to partner with hyperscalers and help customers like Carhartt run SAP S/4HANA in the cloud quickly, smoothly, and securely. “With the scalability of the public cloud, SAP S/4HANA on top, and SUSE Linux Enterprise Server for SAP Applications as
3. Prepare your infrastructure and teams to respond to mission-critical needs. As a result of the pandemic, many companies pivoted their products and services to help save lives, like making hand sanitizer, creating personal protective equipment, and delivering the technology to support new business models and analytics capabilities. This has created an increase in enterprise technology adoption as well as revealed a skills gap. Empower your teams with the tools — and the training — they need to deliver desired business outcomes.their operating system of choice, Carhartt reports that they have been able to completely eliminate downtime and grow direct-to-consumer and direct-to-business channels,” Noga says.