In this presentation, Ralph Treitz from enterprise consulting legend, VMS AG, dives deep into a detailed cost analysis of running SAP on AWS using best practices from more than 2600 environments. If you want to know more about understanding the components of TCO models for enterprise software (including SAP), this is the session for you.

2. Recent Findings
SAP Business Suite and Netweaver on Amazon AWS.
• The AWS platform is certified for running SAP solutions.
• AWS recently extended the capabilities to accommodate
large ERP systems on AWS e.g. 6,000 users, 90,000 SAPS.
• Up to 94% savings on storage and server operations.
• 80% savings on servers for large ERP systems.
• No upfront investment.
• The overall 5-year TCO savings when running SAP on AWS
ranges between 16% and 22%.
• The savings in the areas, where AWS has an impact on,
Content and Design © 2012 ff. by VMS AG
range between 59% and 71%.
• Amazon AWS achieved again a CWI (AWS) of 59,
the leading position in VMS’s list of platforms.

3. Agenda
• How the cloud computing platform impacts SAP
• What is the cost savings potential of Amazon AWS
• How to apply that to my own environment
Content and Design © 2012 ff. by VMS AG
• Takeaways
P. 3

4. NIST Cloud Definitions -1- (May 2012)
Cloud computing allows computer users to conveniently rent
access to fully featured applications, to software development
and deployment environments, and to computing infrastructure
assets such as network-accessible data storage and processing.
Content and Design © 2012 ff. by VMS AG
P. 4

5. NIST Cloud Definitions -2- (May 2012)
Cloud computing is a model for enabling convenient,
on-demand network access to a shared pool of configurable
computing resources (e.g., networks, servers, storage,
applications, and services) that can be rapidly provisioned and
released with minimal management effort or service provider
Content and Design © 2012 ff. by VMS AG
interaction.
P. 5

6. The task list when moving an app to the cloud
NIST May 2012.
Depending on an organization's requirements, different technologies and
configurations are appropriate. To understand which part of the spectrum of
cloud systems is most appropriate for a given need, an organization should
consider how clouds can be deployed (deployment models), what kinds of
services can be provided to customers (service models), the economic
opportunities and risks of using cloud services (economic considerations),
the technical characteristics of cloud services such as performance and
Content and Design © 2012 ff. by VMS AG
reliability (operational characteristics), typical terms of service
(service level agreements), and the security opportunities and risks
(security).
P. 6

7. The Evolution of Providing IT Services
(based on the NIST definitions)
• Outtasking
• Purchasing very specific repetitive services from external service providers
or individuals.
• Outsourcing
• Transferring the responsibility for an explicitly defined customer-specific
application infrastructure to a service provider.
• Your environment – running and serviced in another data center.
• Going Cloud
• Self Service: on demand.
• Resource Pooling (no permanently dedicated hardware for a customer, an
application, a system).
• Elasticity (growing and shrinking).
Content and Design © 2012 ff. by VMS AG
• Pay what you use in measured consumption units not in long term
provisioned units.
• Virtual Appliances
• Pre-configured SAP systems (either customer-specific, customizable or
provider-specific) with or without customer data, …
• … which can be installed, restored, cloned within minutes or at least hours.
P. 7

8. SAP’s Experience With Virtual Appliances
SAP Virtual Appliance Factory – Provisioning SAP installations.
• Base Single System, e.g. ERP
• Before 5 MD
• After 0,5 MD
• Single System with Content, e.g. IDES, IS
• Before 7 MD
• After 0,5 MD
• Business Scenarios, e.g. ERP with IS, CRM, BOE, SCM, EP
• Before 20 MD
• After 0,5 MD
Content and Design © 2012 ff. by VMS AG
• The appliance concept is desperately needed, as we learn from a quote in a
German computer weekly newspaper:
„We had typical lead times of 13 weeks until we could provide a new SAP
installation, now we are down to 4 weeks and can respond to customer
requirements more quickly“
P. 8

9. Cookbook for SAP Related Cloud Economics
How can we quantify the benefits?
• There is broad acceptance that the technical features
of cloud computing are beneficial for running SAP.
• But a positive opinion and a business case a two
different things. So VMS provides:
1. A systematic approach to understand the TCO
of SAP in the cloud.
2. Calculations for 4 different prototypes of
SAP installations.
3. A methodology to apply that to the individual
situation of a company using SAP applications: Low 7 High
Cloud Worthiness Assessment potential CWI potential
Content and Design © 2012 ff. by VMS AG
4. A ranking for Amazon AWS cloud offering in the
market:
Cloud Worthiness Index (AWS)
CWIAWS = 59
P. 9

10. P. 10
Extended by VMS.
The SAP TCO Model
Content and Design © 2012 ff. by VMS AG

11. P. 11
The SAP TCO Model cont.
Content and Design © 2012 ff. by VMS AG

12. Where Do Benefits Materialize?
Excerpts from the recent VMS white paper on SAP on AWS 2012.
AWS
SAP TCO model
triggered Weight
(Level 1)
savings
Hardware/Software
22-29% 11% 26%
Investment Impact
Implementation 26-39% 9% No impact
74%
Hardware/Software
17-19% 12%
Ongoing Cost
Application Operations 2% 33%
Continuous
Content and Design © 2012 ff. by VMS AG
22-45% 20% Impact: hardware investment; planning and building of the
Improvement Projects
infrastructure; running cost for hosting, operation of infrastructure,
Upgrade Projects 23-45% 15% storage, setting up development, test and quality assurance systems.
No impact: licenses and maintenance of application software; all
Savings where AWS matters: 59-71%
business process related work during implementation, changes and
upgrades, incident and problem management; process design.
Savings overall: 16-22%
P. 12

13. The Individual Cloud Worthiness Index
How to define your individual business case.
K$/month
• True indicator of the economic value of a cloud platform.
100
• Easily understandable and comparable simple number
between 1 (low savings potential) and 10 (high savings
potential). ∆W ∆T
• Expressing the customer-specific cost savings potential. ∆WO
• Leveraging best practices of more than 2,700 SAP
environments.
50 100
• Applicable to all leading cloud platforms. 92
• Applicable to Private AND Public Cloud platforms.
63
• Applicable to SAP HANA. 54
Content and Design © 2012 ff. by VMS AG
• Independent from VMS.
0
TCWO BPWO TCW BPW
Low 7 High
potential CWI potential TCWO – TCO as is
BPWO – Best Practice without Cloud
TCW – Total cost with Cloud
P. 13 BPW – Best-Practice with Cloud

14. Takeaways
For IT professionals and IT service providers.
• In order to enable self service features in an SAP environment, you have to
define and to implement the appropriate procedures.
• Only 1/3 of the cloud triggered savings are in the field of cheaper hardware
and infrastructure.
• 2/3 of the savings come from the cloud enabling faster, more reliable,
easier to use , less laborious self service procedures.
• SLAs are going to change and will per defined “per service” not “per piece
of hardware”.
• Decision makers and users are more and more conditioned by their private
life cloud usage experience.
Content and Design © 2012 ff. by VMS AG
• There will be satisfaction for such expectations, whether from home-grown
IT, the service provider or any kind of new service supplier.
• If you leave it to the users to make up their cloud decisions, then there will
be a lot of mess to be cleaned up afterwards.
• Mastering cloud technologies increases your value to the market.
P. 14

15. Takeaways
For users.
• Promote and demand IT agility, since there is no excuse in saying –
I couldn't do it because IT was not capable to deliver resources.
• The gain in time by a faster IT must result in faster decision making and
faster adaptation of business processes.
• Buying cloud services bypassing your IT may make you feel autonomous,
but who will later on integrate your mess of processes and data islands?
• In Europe more than in other parts of the world, data privacy, data security
is used as the reason why “the cloud will not work for us”. It is time to find
solutions which cover both sides , the benefit of cloud computing and the
need of data privacy and data security.
Content and Design © 2012 ff. by VMS AG
• Otherwise, the economic gap between cloud computing and traditional
homegrown IT will widen and later enforce unfavorable quick and dirty
solutions.
P. 15

16. Takeaways
For purchasing departments.
• Stop prolonging existing service contracts. It is time to rethink.
• Check whether an offering has really “cloud inside”.
• The cloud economy releases you from the typical burden of old style
outsourcing contracts like selecting a computer type for years, minimum
volumes, expensive add-on clauses, etc.
• Check your application vendor strategy together with your IT. This is
today’s lock-in level. It will take years to replace a core application
architecture. So you better craft your purchasing plans carefully.
• Check your companies needs regarding CAPEX and OPEX.
Content and Design © 2012 ff. by VMS AG
• This does not only apply for hardware and system software. The next
frontier will be the debate around more flexible application software
pricing.
P. 16

17. “What Is Your CWI Today?”
Content and Design © 2012 ff. by VMS AG
Low 7 High
potential CWI potential
P. 17

18. P. 18
Appendix
•
•
About VMS
VMS Customers
Content and Design © 2012 ff. by VMS AG

19. About VMS
Who we are.
2002 • VM Solutions GmbH, Heidelberg
• VMS = Value Management Solutions = IT creates value
• Creation of a new methodology: DNA-level benchmark
2005 to measure and compare complex systems
• Finalist CyberOne 2005
2006
• Germany’s most active benchmarking company
• > 50 international customers
2007
• Advisory Service: SAP know how - best practice processes
• > 1,600 years of SAP data collected
2008
• VMS Benchmarkbase is the largest repository of SAP usage worldwide
• > 100 international customers
Content and Design © 2012 ff. by VMS AG
2009
• Conversion to VMS AG
2010 • Launch of VMS Process Dashboard
• “Top Innovator 2010”
2012 • Launch of Cloud Worthiness Index (CWI), Core Performance Index (CPI)
and High Performance Analytics Index (HPAI)
• > 2,700 measured SAP systems, 650 measured SAP BW systems
P. 19

20. VMS Customers
Coverage of various industries and business models.
Consumer Goods
Retail
Process / Pharma Bayer
Discrete
Manufacturing
Automotive /
Aerospace
Energy /
Infrastructur
Daimler
Financial
Banking Services
Content and Design © 2012 ff. by VMS AG
Insurance
Services
Bayer
IT Services Business
Services
IT Manufactures
P. 20

21. VMS AG
Burgstrasse 61
69121 Heidelberg
Office Berlin:
Prenzlauer Allee 173
10409 Berlin
Germany
Copyright © 2002-2012 ff VMS AG www.vms.net
www.vms.net
All rights reserved, including those regarding reproduction, copying or other use or communication of the
contents of this document or parts thereof. This publication may only be reproduced, processed using electronic
retrieval systems, or copied in its entirety. We reserve the right to update or modify the contents. Tel: +49 6221 4 38 52 - 0
VMS references and indicates its own trademarks as is practical and appropriate to do so. Other trademarks used
in this document are trademarks of their respective owners and will be respected by VMS. Fax: +49 6221 4 38 52 - 22
VMS registered trademarks are: VMS, the VMS logo, DNA-level benchmark, VMS Report, VMS Monitor, VMS
Process Dashboard, VMS IT Dashboard, VM Solutions, Cloud Worthiness Index, CWI.
E-mail: info@vms.net
Photo Credits: Birkenzweig, eliteglobalbusiness, harry_nl, Nick Saltmarsh, pcshow98, twentyeight on
www.flickr.com – Download April 2009 – florianmarquart on www.flickr.com – Download Sept. 2011 – Royalty-
free images of iStockphoto®.