HCLT Whitepaper: SAP-on-Demand: An Innovative, Efficient and Secure Cloud ERP Solution

SAP-on-Demand: An Innovative,
Efficient and Secure Cloud ERP Solution
An ENTERPRISE MANAGEMENT ASSOCIATES® (EMA™) White Paper
Prepared for HCL Technologies - Infrastructure Services Division (HCL ISD)
November 2011

IT & DATA MANAGEMENT RESEARCH,
INDUSTRY ANALYSIS & CONSULTING

SAP-on-Demand:
An Innovative, Efficient and Secure Cloud ERP Solution

Table of Contents
Executive Summary..............................................................................................................................................1

The Value Proposition of Cloud ERP..............................................................................................................1

Practical Requirements for Cloud ERP Providers..........................................................................................2

The HCL SAP-on-Demand Offering...............................................................................................................2

Solution Stack..................................................................................................................................................4

EMA Perspective...................................................................................................................................................5

About HCL............................................................................................................................................................6

©2011 Enterprise Management Associates, Inc. All Rights Reserved. | www.enterprisemanagement.com

SAP-on-Demand:

Executive Summary
Enterprise Resource Planning (ERP) solutions constitute the most important and strategic IT systems
run by modern enterprises. Cloud platforms offer many benefits for ERP solutions including usage-
based billing, best-in-class management, high availability, and ease of platform upgrades. HCL, bringing
substantial expertise as a SAP solutions consultant, is entering this market with SAP-on-Demand
(SAPoD). SAPoD is an HCL offering that should be considered by any enterprise turning to Cloud
options for their core ERP needs.

The Value Proposition of Cloud ERP
ERP (Enterprise Resource Planning) solutions constitute the most important and strategic IT systems
run by modern enterprises. They support the primary value chain operations of firms in diverse
industries, as well as common back-office functions such as corporate finance and human resources.
Many organizations view these systems as the primary responsibility of their IT department, which
often spends millions or tens of millions on ERP software, the hardware to run it on, as well as
necessary supporting services such as facilities, network, backup, scheduling and monitoring.
While ERP systems are often extensively tailored for the given
company’s business model, the core infrastructure supporting this
functionality is relatively standardized and can turn out to be very The tradition of acquiring and
expensive. Servers with the capacity to run ERP systems at scale running the underlying ERP
are costly devices to acquire and run, and once acquired they infrastructure in-house is now
grow obsolete and depreciate, with the enterprise locked into their being challenged by Cloud
capabilities until they are replaced. Servers acquired to run an ERP options, which offer several
system may be sized on the assumption that the usage will grow over attractive benefits such as better
time, and hence for their earlier years have surplus capacity, which is capacity management, focus on
essentially a waste.
business functionality and more.
Engineering the appropriate server architecture (e.g., clustering,
failover, load balancing, capacity, storage, etc.) for a large ERP system
is not a trivial exercise; it requires skilled staff and often results in long lead times. Yet, this engineering
is a non-value-add activity from the point of the business that just demands a high-performing and
highly-available system.
The ERP functionality is the value the business needs. The underlying infrastructure is necessary,
but non-value-add. As a result, the tradition of acquiring and running that infrastructure in-house is
now being challenged by Cloud options. The Cloud-based infrastructure delivery model offers several
attractive benefits such as:
• Focus on business functionality.
• Better capacity management.
• Aligning IT expenses with revenue; moving from capex to opex.
• Ongoing technology refresh.
• Eliminates the need for engineering complex infrastructure.
• Reduces the need for internal services such as network, backup, scheduling, and monitoring.

Page 1
Page 1 ©2011 Enterprise Management Associates, Inc. All Rights Reserved. | www.enterprisemanagement.com

SAP-on-Demand:

Practical Requirements for Cloud ERP Providers
The Cloud land rush is on, and emerging Cloud service vendors are many. EMA is wary of these emerging
players, as high reliability/high value Cloud services require significant investment, engineering, and
operational discipline. Availability, security, and high performance are table stakes. Cloud providers
must have well thought-out pricing models that support customer expectations of downward as well as
upward scalability. Reliable capacity estimation, tenancy architectures, metering, migration, and related
support infrastructure must be established. Commercialized public Cloud offerings require customer-
facing support layers (e.g., for ordering additional services) that are not seen in traditional, internally
owned static IT. Even in the case of internal Cloud such capabilities don’t need to be as refined as truly
public-facing Cloud offerings.
Physical data centers must be constructed and certified to the appropriate standards level (e.g., SAS 70
Tier III). Operational processes such as Incident and Change Management must be implemented to
high maturity levels, perhaps certified against ISO 20000.
ERP data is a primary business asset that includes balance sheets,
customers, suppliers, employees, and payroll. Therefore, security is a
ERP data is a primary primary concern; certification against ISO 27001 is typically sought
business asset that includes and on a practical level requires state-of-the-art infrastructure for
balance sheets, customers, host intrusion detection (HIDS), anti-virus, firewall, and so on. The
suppliers, employees, and higher-order services such as monitoring, backup, automation, and
payroll. Therefore, security scheduling must be engineered to state-of-the-art levels as well.
is a primary concern. Additional differentiators for Cloud ERP providers include
streamlined asset supply chains so that assets are quickly added,
refreshed, and retired with maximum efficiency and cost effectiveness.
Green IT abilities such as minimizing power consumption in the data center by intelligently managing
server activity may also be important.
A further issue for international providers is the varying data privacy laws around the world, which may
be directly inconsistent with each other (for example, provisions of the U.S. Patriot Act violate other
national laws stipulating privacy of personal information, meaning that private German data may not
be physically stored in the U.S.)

The HCL SAP-on-Demand Offering
HCL is coming to market with a variety of Cloud offerings targeting various verticals and platforms.
One of these offerings is SAP-on-Demand (SAPoD). This service includes all aspects of SAP support
at a platform (SAP Basis) and infrastructure level, including a user facing “MyCloud” portal. HCL has
SAP offerings (Table 1) that suit a variety of purposes and business needs. Usage scenarios may span
from initial piloting and development all the way through large, mission-critical SAP system operations.
HCL also provides engagement services via HCL Axon, their Enterprise Application Services
Division. HCL Axon has deep domain solutions for specific SAP modules such as Financials or
Human Resources.

Page 2

SAP-on-Demand:

The detailed offerings include:
• Integrated compute, storage, and network infrastructure hosted in a SAS-70 Tier III data center.
• Full operations management capabilities (monitoring, Incident Management, Change Management).
• Various levels of service available via a published service catalog.
• Dual data centers in both the U.S. (New Jersey and Pennsylvania) and Europe (Sweden).
• Storage categories to meet the specific SAP requirements.
• User facing “MyCloud” portal for provisioning, billing, and visibility into the SAP environment.

The SAPoD offering is based on the standard benchmark of SAP Application Performance Standard
(SAPS). One SAPS is defined as 2,000 fully business processed order line items per hour. The
offerings range from Bronze through Platinum levels spanning 97.5% to 99.9% availability. Higher
tiers are based on 20,000 SAPS per year; lower tiers, on 10,000.
Initial sizing is done via HCL’s SAP “QuickSizer” tool, which takes a variety of inputs as to user base
and expected throughput and delivers a recommendation as to appropriate service offering. Pricing
is based on SAPS per annum and gigabytes of usable storage per month. The service offerings also
reflect different commitments for recovery (RPO/RTO) and storage and system architectures.

SAP-On Demand Service Catalogue
Platinum Gold Silver Bronze
SAP Instance Type
Instance Instance Instance Instance

Parameters

System Uptime

Data Center Availability 99.90% 99.50% 99.00% 97.50%

1.85 Days 3.65 Days
Yearly Downtime 8.75 Hrs Best Effort
(43.8 Hrs) (87.6 Hrs)

Recovery Time Objective 2 Hrs 4Hrs 8 Hrs Best Effort

Recovery Point Objective 15 Min 30 Min 6 Hrs Best Effort

Architectural Details

Twin Data Center Support
Yes Yes Yes No
(Disaster Recovery)

NA
Storage Replication Sync A-Sync A-Sync
(BCP Extra $$)

System Architecture n+1 n / n+1 n n

SAP Utility Model (All Figures in SAPS)

Minimum SAPS to be
hosted per year after initial 20,000.00 20,000.00 10,000.00 10,000.00
six months of transition

Table 1. HCL Service Catalog

Page 3

SAP-on-Demand:

Solution Stack
The HCL solution stack (Figure 1) consists of facilities, core infrastructure, and the SAP basis
platform, supported by security and management layers. Network, security, storage, and facilities
are shared; to date, HCL has provisioned all customers with dedicated servers, load balancers, and
intrusion prevention systems. Virtualization is used as appropriate within the dedicated infrastructure
to optimize delivery costs and support objectives such as disaster recovery.

SAP Basis

Management

Security
Compute Storage Network

Facilities

Figure 1. HCL solution stack

HCL’s systems management capability is called the MTaaS™ Tools Stack (www.hclisd.com/MTaaS.
aspx). MTaaS™ for the SAP-on-Demand offering includes the SAP solution for Incident, as well as
an internally hosted, multi-tenant Remedy instance. Nimsoft is used for application monitoring. The
SAPoD service leverages MTaaS™ for monitoring and managing the SAP environment.
Access management controls from Cyber-Ark and Xceedium are used for one-time password
generation and privileged access control; all administrative activity is logged. Customer data can also
be encrypted and masked. A dedicated security management team monitors the incidents and ensures
the security infrastructure’s integrity.
MTaaS™ delivers monitoring data in customizable dashboards that provide users with insights into
overall SAP availability, SAP performance, and SAP end-user connections. Customers of the SAP-
on-Demand offering are provided with console access to their respective instances, and also a unified
reporting tool called “HCL MyDashboard.” This dashboard provides visibility into the customer’s
services as monitored by the MTaaS™ stack.
The HCL service desk is the qualified single point of contact for the end users; the service desk in turn
involves the respective infrastructure or application teams. Services under the purview of service desk
(which can be contacted via web, phone, or chat) are:
• Incident Management from ticket logging to ticket escalation and follow-up until the ticket
resolution and closure.
• Resolver groups assignment/follow-up.
• Categorizing, prioritizing and logging all service requests.
• Ticket dispatch.
• Critical event coordination (also known as major incident management).
• Incident closure and trend analysis.

Related, relevant services available as a set of ancillary offerings from HCL include terminal services
(e.g., for SAP development) and endpoint monitoring.

Page 4

SAP-on-Demand:

EMA Perspective
HCL’s offering demonstrates the sophistication in SAP engineering they have gained through years of
SAP solutions consulting. Well grounded in assisting customers with in-house SAP offerings, HCL is
now taking that experience and applying it to a Cloud offering that promises the following benefits:
• Greater alignment of IT costs with business cycles, including scaling costs up or down according
to demand.
• Eliminates the need to fund excess capacity early in an infrastructure cycle.
• Greater ease of maintaining up-to-date technology.
• Greater utilization and cost transparency.
• High availability via robust architectures and management practices.
• Hardware vendor neutral, best-of-breed solution, with greater flexibility to adopt new technology
trends (e.g., VCE Vblock, Cisco UCS, and other converged solutions).
• Cohesive systems management platform (HCL MTaaS™) supporting SAP service delivery.
• Deep SAP lifecycle capabilities with over 6,000 staff skilled in SAP consulting, application support,
infrastructure support and system integration.
EMA is especially supportive of HCL’s established track record
in SAP-functional development and solutions delivery. This lends
credibility to their Cloud offerings. However, to some extent, they EMA is especially supportive of
may have to overcome their image as primarily an offshoring and HCL’s established track record
outsourcing company. in SAP-functional development
HCL has competitive challenges, including from SAP itself. However, and solutions delivery.
SAP’s offerings are limited; its Business ByDesign™ targets small-to-
medium sized businesses and does not directly compete with HCL’s
offering here. Offerings emerging under the new SAP-on-Demand brand are as yet relatively limited,
and SAP does not itself offer its core ECC 6.0 products as an on-demand offering. SAP is still reeling
from the departure of its key Cloud architect, and so there is an opening for offerings such as HCL’s.
Cases provided by HCL include a leading pharmaceutical company in the U.S. ($3.4bn revenue) and
a leading manufacturer in Denmark (€4.7bn revenue). For the U.S. firm, 50,000 SAPS were initially
provisioned and are scaling 15% year-over-year, with associated storage of 20 TB. For the Denmark
client, the initial SAPS were 260,000, since ramped up to 850,000, with associated storage of over half
a petabyte. In both cases, HCL was selected for its expertise and proven transition methodology.
As HCL evolves its offerings, they may be able to add additional value by considering:
• Better out of region recoverability — a requirement for more heavily regulated industries. This
would translate to another data center further away from the New Jersey/Pennsylvania sites.
• Presence in the Asia-Pacific market and additional sites in Europe.
• Continued evolution of their approaches toward hosting, tenancy, provisioning, and virtualization.
• Moving from aggregate availability SLAs (e.g., 99.x% uptime) to response and latency SLAs more
focused on the end-customer experience.

Page 5

SAP-on-Demand:

ERP solutions are pivotal to modern enterprises, and platforms such as SAP, Oracle, Sage, and
Epicor show no signs of fading away. Implementing these solutions is difficult enough in terms of
functionality, business process, and culture change. Cloud offerings promise to at least eliminate the
headaches that come with infrastructure engineering and operations
of the necessary plumbing for these products. One of the often-
cited concerns with Cloud is the fear of lock-in. In theory, this Enterprises wishing to focus
should not weigh as heavily for a standard offering like SAP. on the value of ERP, while
HCL has established itself as a credible solutions provider for avoiding its infrastructure
SAP and in its SAP-on-Demand offering is a logical progression. and operational headaches,
Enterprises wishing to focus on the value of ERP, while avoiding its would be well advised to
infrastructure and operational headaches, would be well advised to give strong consideration to
give strong consideration to HCL’s SAP-on-Demand. HCL’s SAP-on-Demand.

About HCL
Established in 1976 as an IT garage setup, HCL is a $6 billion organization with over 85,000 professionals
across 31 countries. HCL Technologies Infrastructure Services Division, also known as HCL ISD,
is the fastest growing line of business and manages mission-critical environments for over 20% of
Fortune 100 organizations. The company’s fast growth has attracted several bestselling authors to
include the HCL ISD case study in their bestsellers; a growth that Apple, Google and Microsoft saw in
their times! HCL ISD’s scale of infrastructure operations involves centralized management of globally
distributed assets of over 3 million devices; resolving over 10 million helpdesk calls while supporting
over 1.7 million business users’ needs. Over 17,000 certified infrastructure management employees
leverage a robust global delivery network of 21 service delivery centers across the globe, to manage the
customers’ growing infrastructure management services needs in 26 languages. The industry experts
recognize our expertise and leadership in the infrastructure management outsourcing space — the
reason being our secure offshore management centers, skilled labor pool, multilingual capabilities and
over 35 years of experience in delivering infrastructure management services, among others. Governed
by its core values ‘trust’, ‘transparency’ and ‘flexibility’, HCL ISD is known for delivering consistent
IT and business value. The company’s key service offerings include, data center services, end user
computing services, network and security services, mainframe and cloud computing services. For more
information, please visit www.hclisd.com.

Page 6

About Enterprise Management Associates, Inc.
Founded in 1996, Enterprise Management Associates (EMA) is a leading industry analyst firm that provides deep insight across the full spectrum
of IT and data management technologies. EMA analysts leverage a unique combination of practical experience, insight into industry best practices,
and in-depth knowledge of current and planned vendor solutions to help its clients achieve their goals. Learn more about EMA research,
analysis, and consulting services for enterprise line of business users, IT professionals and IT vendors at www.enterprisemanagement.com or
blogs.enterprisemanagement.com. You can also follow EMA on Twitter or Facebook.

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©2011 Enterprise Management Associates, Inc. All Rights Reserved. EMA™, ENTERPRISE MANAGEMENT ASSOCIATES®, and the
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HCLT Whitepaper: SAP-on-Demand: An Innovative, Efficient and Secure Cloud ERP Solution

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HCLT Whitepaper: SAP-on-Demand: An Innovative, Efficient and Secure Cloud ERP Solution