White Paper TCO Study for SAP on VMware. Date: May 4 th, 2012

Transcription

1 White Paper TCO Study for SAP on VMware Date: May 4 th, 2012

2 Content 1 Executive Summary Impact Characteristics Methodology Background and Approach SAP TCO Model Reference Groups Defining of Profiles Profiles for the TCO Study FAQ Highlights on some typical TCO related questions What s In What s Out The Comparison Base Percentages VMware Savings in Total Level 1 Aggregation Level 2 Aggregation VMware Savings in Detail Hardware/Software Investment Implementation Hardware/Software Ongoing Costs Operations Continuous Improvement Projects Upgrade Projects Copyright ff VMS AG 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. 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. VMS registered trademarks are: VMS, the VMS logo, DNA-level benchmark, VMS Report, VMS Monitor, VMS Process Dashboard, VMS IT Dashboard, VM Solutions. SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP BusinessObjects Explorer, StreamWork, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and other countries. VMware and vsphere are registered trademarks of VMware, Inc. in the United States and/or other jurisdictions. White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 2

3 1 Executive Summary VMware is the leader in virtualization and cloud infrastructure solutions that enable businesses to thrive in the Cloud Era. Customers rely on VMware to help them transform the way they build, deliver and consume Information Technology resources in a manner that is evolutionary and based on their specific needs. VMS is specialized in analyzing and optimizing SAP landscapes (DNA-level Benchmark for SAP) and owns the largest and most detailed database for SAP benchmark results worldwide. In this study, VMS compiles its research about virtualization technology using VMware for the operation of SAP. VMS compared SAP on VMware with other options to run an SAP landscape. Origin of the savings is the technology migration steps shown below, developing from a traditional non-virtualized environment into a VMware environment: The total cost of ownership (TCO) savings potential for running SAP on VMware is 13%. Main drivers for the TCO reduction are: Using state-of-the-art, low-cost and fast x86 server technology. VMware virtualization enables significantly better utilization of hardware, thus reducing power and floor space consumption. Faster and smaller hardware also reduces the additional cost for servers, cost for data center and the administration of servers. Even more important are savings in the area of upgrade, rollout and improvement projects, for these savings have much more impact on the TCO of SAP systems. White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 3

4 Flexibility increases in project scenarios like rollout, upgrade and change. Building additional project systems, resetting test systems on the fly, adding training systems, etc. requires no change in adding or buying additional hardware but only in allocation of resources. Decoupling SAP and OS systems from hardware by virtualization enables more focused planning of each: the technical infrastructure and the SAP systems. Savings in the area of ongoing cost or operations are smaller, since the majority of the effort there is related to the SAP application itself, which is not affected so much by VMware. The potential TCO savings along the categories of the SAP TCO model are as follows: SAP TCO model (Level 1) Overall TCO savings when using VMware VMware induced savings (Virtualization Relevant Cost Subset) Hardware/Software Investment 10-18% 53 55% Implementation 16-19% 25 44% Hardware/Software Ongoing Cost 3-4% 37 41% Operations 2% 51 67% Continuous Improvement Projects 18-25% 39 43% Upgrade Projects 24-36% 49 52% Table 1: TCO Impact Overview (a) VMS analyzes VMware induced savings in two dimensions: Overall TCO as described Virtualization Relevant Cost Subset (VRCS), which comprises only those areas where virtualization has a direct impact. (b) The percentage ranges vary for different SAP environment sizes as explained later. White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 4

5 2 Impact Characteristics Depending on the dynamics of the tasks to be performed virtualization is more or less effective with respect to the optimization of the total cost of ownership: Dynamics Trigger Effect Who benefits Milliseconds to seconds Commercial IT systems have a lot of parallel activities going on. Virtualization helps to exploit machine resources better and to potentially gain better response times. Almost everybody. Minutes to hours ERP, HR and BW systems as well as industry specific invoicing systems show peak operation times. Virtualization allows to provide significantly more resources when needed for typical peak operations like ERP runs, HR salary calculations, month end closure or building BW cubes. About 60% of all SAP using companies have such kind of peak operations. Industry-wise, these are typically industries with large customer databases like Utilities, Telecoms, Retail, Banking, and Insurance. Days to weeks There are plenty of scenarios with only a temporary need for additional hardware and systems. TCO-wise this is the most important effect. While the more technical short time scale effects save on hardware cost, the capability of super fast provisioning of new SAP instances brings down operational (FTE) cost, which becomes the more and more dominant part in each TCO framework. About 78% of all SAP using companies face continuous changes in their landscape due to rollouts, functional extensions, release changes, process automation, etc. Industry-wise, VMS Benchmarkbase shows this to be a challenge especially in Telecom, Services and regulated environments like Healthcare. Months to years Business processes extend beyond SAP. Standardized hardware can be easily exchanged between SAP and non- SAP environments. Companies in large scale growth, shrink, split & merger situations. Table 2: Dynamics of SAP White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 5

6 3 Methodology This section outlines the methodology VMS used to perform the TCO analysis. The study s background (section 3.1) is discussed in detail and the SAP TCO Model the basis of the TCO analysis is introduced (section 3.2). An outline of the reference groups shows how the reference groups were derived that are later subject to separate cost analysis (section 3.3), followed by Frequently Asked Questions (section 3.4). 3.1 Background and Approach The goals of this study are to investigate the benefits of cloud computing architectures for SAP environments and understand the direct benefits (investments, ongoing costs and operations) and indirect benefits (for variety of different projects). The focus is to compare TCO of SAP environments running in a more traditional setting with the same systems running on VMware. Base Cost Level Traditional Setup Typical average traditional Unix-like or Windows based SAP landscape (non virtualized) x86 based cost level Without virtualization VMware Virtualized Environment Stages from non-virtualized environments up to Cloud Computing The basis for this comparison is the SAP TCO Model (section 3.2); the SAP TCO Model provides a multi-level hierarchy of cost categories. It covers all significant components of a SAP environment (hardware, software, and operations), and considers the complete lifecycle of SAP systems (plan, purchase, roll-out, operate, maintain, fix, change, and improve). By using the SAP TCO Model to calculate the total (and partial) costs of various scenarios, it is possible to obtain a highly comparable cost overview. The overview allows for the comparison and identification of cost discrepancies in detail, as well as in the total costs. VMS was able to extrapolate the required data from both the features of the product, as well as from the available data of thousands of measured systems in the VMS Benchmarkbase. The VMS Benchmarkbase contains data that compare more than 2,600 SAP environments, along with their respective costs. VMS analyzes best practices based on detailed measurements along with cost data from the VMS AdaptiveTCO workbench. White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 6

7 3.2 SAP TCO Model The basis of this study is the SAP TCO model. It covers the TCO of SAP software over its entire lifecycle. It is structured hierarchically, consisting of 3 levels originally (levels 1 and 2 are shown in the graphic below), each enabling a more detailed view on the subject. To better understand the impact of VMware, VMS provides an even greater level of detail where applicable (section 5). The drill-down helps readers to understand their flow of resources when running SAP. The study covers CAPEX (investments) and OPEX (operational costs) elements. The study is based on an environment over a lifecycle of 5 years. Table 3: SAP TCO Model (Level 1 and 2) White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 7

8 Assumptions: End-User usage was not considered in this study because the cost of workplace and business process operation is not in scope. The End-User usage second-level category - productivity loss makes ROI studies look good because even a small figure for loss per hour multiplied with a high number of hours multiplied with a high number of users will lead to savings that look significant. In reality these savings potential will rarely become effective. For that reason, VMS will not take these costs into account when highlighting TCO. Cost for WAN traffic is excluded, but it plays a role when SAP is outsourced (externally or on VMware). 3.3 Reference Groups The reference groups for this study are very representative of SAP penetration of these industries. One exception is IT because IT providers are more likely customers of VMS for optimization of SAP. Revenue (billion ) Share < 0.1 1% < % < 0.5 7% < 1 8% < 2 11% < 5 21% < 10 10% < 25 22% < 50 7% > 50 11% Table 4: Distribution according to the revenue of companies White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 8

9 Reference Group Share Manufacturing 42% Utilities 13% Finance 9% Services 13% IT 9% HealthCare 9% Others 5% Table 5: Distribution according to the number of measured systems Defining of Profiles Starting Point Although SAP is standard software and the TCO model is universally valid, each single company and each SAP installation is unique. Solution For the purpose of the study, VMS defined three different profiles that represent typical SAP customer landscape components, provide criteria to explain the differences, and are based upon real data, commonly found. The TCO model is an abstract model that groups different aspects of cost over the SAP project lifecycle. With the help of these three company profiles, readers may find themselves within the model more easily. White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 9

10 3.3.2 Profiles for the TCO Study The study was grouped into Global Payers, Local Players and Small-to-Medium Enterprises: Global Player (Affiliated Group) Local Player 1 (Large Company) SME (Mid-sized Company) Revenue > 10 Bill. < 10 Bill. < 1 Bill. Employees > 50,000 < 50,000 < 5,000 Organization Holding company with several subsidiaries 1 company 1 company Concurrent users 2,500 1, Systems 2 4 SAP systems: ERP/BW/CRM/Portal (Part of all SAP systems) 4 SAP systems: ERP/BW/CRM/Portal (Part of all SAP systems) 2 SAP systems: ERP/BW Named users 15,000 7,500 2,500 Users/day 5,500 3,000 1,000 Database [TB], P systems only Data Center RAID5, mirrored on a distant location RAID5, mirrored on a distant location RAID5, mirrored SAPS 4 275, ,000 60,000 Table 6: Prototypes Profiles 1) Local Player means that the major part of the company is located in one country. 2) Only a typical unit of the whole SAP landscape is focused. 3) Assumption: Q-systems need the same disc space as P-systems. 4) Based on the old definition of SAPS, because today there are still some ERP systems on 4.6C or 4.7. White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 10

11 3.4 FAQ Highlights on some typical TCO related questions What s In What s Out The SAP TCO model includes all elements necessary to run SAP in the enterprise but excludes end user equipment and WAN network elements to reach them. The study also excludes initial business process (re)design efforts when implementing SAP for the first time. Those efforts are largely driven by the status and demand of an enterprise but not by the hardware, software, or infrastructure used. The use of cloud computing, such as VMware, defines a change in landscape architecture. Such a change, especially in business processes, triggers the need for education of IT staff, a one-time effort. Since the steepness of the learning curve is very individual and depends on the individual IT team, it is not considered in this TCO model The Comparison Base We compare VMware against typical scenarios of systems in use today, including various Unix, Linux, and Windows-based implementations with a variety of database products running on dedicated servers. The base for the comparison is provided by the VMS Benchmarkbase. The Benchmarkbase contains the real-life usage, quality, and cost data of more than 2,600 SAP environments. It covers a broad variety of industries and geographies and accurately reflects the current dissemination of SAP s products in use. The distribution of the reference groups is presented on the following pages. The comparison group does not include any mainframe-based installations. From a CAPEX point of view this would lead to even more significant savings when a company switches from mainframe to cloud computing. VMS acknowledges this as a reasonable, albeit rare, step. The focus of this study, however, remains on mainstream elements and attempts to avoid special cases such as this Percentages VMS shows savings as precise percentages (e.g., 22% savings on implementing SAP for a global player) rather than as a range (e.g., 15%-30%). The VMS TCO model allows the calculation of typical savings for the specific defined profile, which VMS doesn t want to dilute by showing ranges. Of course a new VMware user might come up with slightly different percentages in the end because the real-world implementation will not be exactly identical to the prototype profile. White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 11

12 How to read the tables? Within the details (section 5), the savings potential is shown on level 3. There are cost elements where VMware will save money (background light blue), but there are also elements VMware has no influence, e.g., SAP licenses (background light grey). On the bottom line, the consolidated savings are shown for each company profile. SAP TCO Model VMS VMware triggered Savings Level 1 Level 2 Level 3 Details Global Player Local Player 1 SME Hardware/ Software Investment Technical Infrastructure Computing Hardware Application Server AA% BB% CC% Computing Software Operating System Consolidated Level 1 Savings: XX % YY% ZZ% In this example, VMware will reduce investments in the area of Application Server, but not for Operating System. Each cost element has a different weight within its category. Therefore the consolidated savings: XX%, YY%, and ZZ%, are lower in comparison to Application Server related savings: AA%, BB%, and CC%. White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 12

13 4 VMware Savings in Total 4.1 Level 1 Aggregation Overall TCO savings of the SAP Application Lifecycle for the three scenarios are as shown below: SAP TCO model VMware triggered savings Level 1 (Total) Global player Local player SME Hardware/Software Investment 18% 14% 10% Implementation 19% 18% 16% Hardware/Software Ongoing Cost 4% 3% 3% Operations 2% 2% 2% Continuous Improvement Projects 20% 18% 25% Upgrade Projects 26% 24% 36% Table 7a: Level 1 Aggregation In essence VMware induced savings stem from less servers (virtualization consolidates many virtual machines onto few physical machine) and less IT personnel (virtualization automates the data center operation). Whereas the impact on the application management and support cost is marginable. Operations (application management and support) remain the biggest cost driver in SAP environments. More than 80% of today s IT costs are related to systems and application management, widely exceeding more obvious and directly measurable costs, such as infrastructure investments. VMware does not have a direct impact on application operations and hence the savings seem low. However, because they have a very high impact on TCO, the potential savings are huge. Taking a second view with only the elements that are relevant to VMware, the picture looks different: White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 13

14 SAP TCO model (VRCS subset) Level 1 VRCS (only elements VMware has an impact on) VMware triggered savings Global player Local player SME Hardware/Software Investment 50% 55% 53% Implementation 44% 37% 25% Hardware/Software Ongoing Cost 37% 41% 39% Operations 67% 58% 51% Continuous Improvement Projects 43% 42% 39% Upgrade Projects 52% 49% 50% Table 7b: Level 1 Aggregation of subset TCO The subset of VRCS (only VMware relevant cost elements) is 28% of the overall TCO. The savings sum up to 46%. When considering only the items that are relevant to VMware, you can see significant savings over traditional on-premises deployments. 72% 28% Impact No impact Impact: a variety of different hardware investments; planning and setup of infrastructure; ongoing costs for hosting and operating servers and storage; implementation of test and training systems. No impact: license cost and maintenance fee; business tasks and project management during implementation; incident and problem management, change management, process design. The operational model impacts only 28% of the overall lifecycle costs. The biggest cost drivers are SAP licenses and Application Support (Incident and Problem Management). White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 14

15 4.2 Level 2 Aggregation SAP TCO model VMware triggered savings Level 1 Level 2 Global player Local player SME Hardware/Software Investment Technical Infrastructure 33% 33% 30% System Software 2% 2% 1% Application Software Implementation Process Design 70% 67% 59% Organizational Change Technical Setup 60% 40% 20% Business Setup Project Management Testing 35% 30% 23% Training 35% 30% 23% Hardware/Software Ongoing Cost Technical Infrastructure 22% 21% 18% System Software 3% 2% 3% Application Software Operations System Operations 22% 19% 16% Application Operations Continuous Improvement Projects Continuous Business Improvement Continuous Technical Improvement 18% 17% 26% 50% 50% 50% Rollouts 22% 18% 10% Upgrade Projects Application Upgrade 19% 17% 26% System Upgrade 81% 75% 64% Table 8a: Level 2 Aggregation White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 15

16 Taking a second view with only the elements that are relevant to VMware, the picture looks like follows: SAP TCO model (VRCS subset) (only elements VMware has an impact on) VMware triggered savings Level 1 Level 2 Global player Local player SME Hardware/Software Investment Technical Infrastructure 69% 69% 64% System Software 10% 15% 20% Implementation Process Design 70% 67% 59% Technical Setup 60% 40% 20% Testing 35% 30% 23% Training 35% 30% 23% Hardware/Software Ongoing Cost Technical Infrastructure 55% 52% 47% System Software 10% 15% 20% Operations System Operations 67% 58% 51% Continuous Improvement Projects Continuous Business Improvement Continuous Technical Improvement 49% 46% 48% 50% 50% 50% Rollouts 22% 18% 10% Upgrade Projects Application Upgrade 44% 40% 42% System Upgrade 81% 75% 64% Table 8b: Level 2 Aggregation of subset TCO The subset of VRCS (VMware relevant cost elements) is 28% of the total TCO. The savings sum up to 46%. White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 16

17 5 VMware Savings in Detail 5.1 Hardware/Software Investment There is a cost reduction potential of 10% - 18% in the area Hardware/Software Investment: SAP TCO model VMS Level 1 Level 2 Level 3 Details VMware triggered savings Global player Local player SME Note Hardware/ Software Investment Technical Infrastructure Computing Hardware Application Server (incl. vsphere 5) 84% 84% 75% 1, 2, 3 Database Server (incl. vsphere 5) 84% 84% 75% 1, 2, 3 Storage Backup Hardware 61% 64% 63% 4 Print Hardware 50% 50% 50% 1, 2 Archiving Hardware 10% 10% 10% 1, 2 Network End-User Environment System Software Computing Software Operating System Database Tools 10% 15% 20% 5 Backup Software Print Software White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 17

18 Archiving Software End-User Environment Application SW Licenses Consolidated Level 1 Savings: 18% 14% 10% Remarks: Table 9: Hardware/Software Investment Archiving and printing are not common for small SAP installations. End-User Usage was not considered in this study because the cost of workplace and business process operation is not in scope. The network is a LAN; WAN is not considered in this study. Where are the potential savings of 10%-18% in the Hardware/Software Investment category coming from? The overarching effect stems from the significant reduction of physical servers. Note Note Area Effect (1) x86 Hardware based on x86 architecture is significantly cheaper than comparable Unix or other servers. This is still true with the additional cost for VMware software licenses. (2) Virtualization The core of VMware: Maximize the utilization of the servers by virtualization. (3) System availability Built-in cluster-like functionality (VMware High-Availability & VMware Fault Tolerance) with much less administrative work compared to traditional cluster features replaces the need for cluster solutions based on spare hardware. VMware Fault Tolerance can also be used to secure the batch runs. White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 18

19 (4) System Landscape Recovery (5) Software license cost Integrated backup concept through close integration of backup infrastructure within VMware. Consistent backups across SAP landscapes out of the box. The Enterprise version of VMware vsphere 5 has got several tools inside. This saves money for additional third party tools. White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 19

20 5.2 Implementation There is a cost reduction potential of 16% - 19% in the area Implementation: SAP TCO model VMS Level 1 Level 2 Level 3 Details VMware triggered savings Global player Local player SME Note Implementation Process Design Planning of Infrastructure Blueprint/ Conceptual Design 70% 67% 59% 1, 4 Organizational Change Change Management Technical Setup Installation 60% 40% 20% 1,2, 4 Technical Configuration Technical Operations Technical Conceptual Design Implementation Business Setup All level 3 elements Project Management All level 3 elements Testing Training Testing Training 35% 30% 23% 3 Consolidated Level 1 Savings: 19% 18% 16% Table 10: Implementation White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 20

21 Remark: Process Design is limited here to the technical components (infrastructure and landscape blueprint). This model does not include business process such as the design and redesign efforts of the company when it starts to implement SAP. Where are the potential savings of 16%-19% in the Implementation category coming from? VMware enables a less complex hardware landscape. Furthermore it allows to automate manual data center processes in an unprecedented manner. Note Note Area Effect (1) Competition Usually a virtualization done with VMware goes along with the flexibility in using x86 servers. IT can buy additional servers and increase the SAPS if needed, even from a different server manufacturer. So the purchasing department has not to negotiate with a monopoly vendor. (2) Installation process Simple setup, installation and reconfiguration of virtual machines. (3) SAP system management (4) Simplification of hardware landscape Creation of individual templates to provide test- and training systems. Surrounding systems of an SAP landscape (e.g. FTP Server, Print Server, ) can be hosted and operated on VMware as well. White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 21

22 5.3 Hardware/Software Ongoing Costs There is a cost reduction potential of up to 4% in the area Hardware/Software Ongoing Costs: SAP TCO model VMS Level 1 Level 2 Level 3 Details VMware triggered savings Global player Local player SME Note Hardware/ Software Ongoing Cost Technical Infrastructure Computing Hardware Application Server (in vsphere 5) 64% 59% 53% 1,2,3,4,5 Database Server (in vsphere 5) 64% 59% 53% 1,2,3,4,5 Storage Backup Hardware Print Hardware Archiving Hardware 50% 54% 47% 1, 2 50% 50% 50% 1,2,3,4,5 10% 10% 10% 1,2,3,4,5 Network End-User Environment System Software Computing SW Operating System Database Tools 10% 15% 20% 6 Backup Software Print Software White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 22

23 Archiving Software Application SW End-User Environment Maintenance Fees Consolidated Level 1 Savings: 4% 3% 3% Table 11: Hardware/Software Ongoing Costs Where are the potential savings of up to 4% in the Hardware/Software Ongoing Costs category coming from? Once again it is the very high degree of data center automation and utilization that makes the difference here. Note Note Area Effect (1) Volume reduction Lower hardware and software maintenance efforts as result of significant reduced number of hardware system pieces. This also reduces the space needed in a data center. (2) Subsequent investments (3) Homogeneous extension path (4) Investment protection The flexibility of VMware in providing compute resources prevents immediate additional investments due to typical slighter changes in hardware volume needs by individual systems. The ability to expand the capacity of VMware infrastructure without rearranging already existing hardware elements. Changes in the SAP system layout are covered by changes on the virtualized OS level without the need to exchange hardware. Additional resource demands are met by additional virtual building blocks. (5) Green IT Lower energy consumption and reduced need for data center space. (6) Software maintenance cost The Enterprise version of VMware vsphere 5 includes a comprehensive tool set. This reduces the need for additional third party tools and therefore lowers maintenance. White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 23

24 5.4 Operations There is a cost reduction potential of 2% in the area Operations: SAP TCO model VMS Level 1 Level 2 Level 3 Details VMware triggered savings Global player Local player SME Note Operations System Operations System Monitoring Storage, Server, OS 66% 52% 30% 1,2,4 Database SAP Basis System Administration Storage, Server, OS 78% 63% 54% 1 5 Database 73% 69% 68% 1,2,3 SAP Basis Backup Archive System Problem Management User Administration Storage, Server, OS 69% 52% 40% 1 5 Database 18% 21% 23% 1,2,3 SAP Basis, Early Watch Software Change Management System Service Desk & Incident Management General/Administrative Costs Operations Application Operation All level 3 elements White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 24

25 Consolidated Level 1 Savings: 2% 2% 2% Table 12: Operations Where are the potential savings of 2% in the Operations category coming from? The biggest part of operations is Application Support (Incident & Problem Management), which mainly belongs to Application Operations. This part is independent of the operational model, so there are no savings. So the overall savings are low, between 0% and 2% due to the technical part. Note Note Area Effect (1) Flexibility on resource level (2) Flexible provisioning of systems (3) Reduction of planned downtime Adding/removing compute resources or storage to virtual machines based on demand. Adding/removing virtual machines - and SAP systems with them - based on demand. Due to virtualization, e.g. live migration without downtime from one physical host to another VMware VMotion. (4) Cost of overtime Infrastructure maintenance activities can be delivered to a large extend during regular working hours. (5) Complexity reduction No H/A cluster tests are required (which is typically very time consuming and error-prone). White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 25

26 5.5 Continuous Improvement Projects There is a cost reduction potential of 18% - 25% in the area continuous improvement projects: SAP TCO model VMS Level 1 Level 2 Level 3 Details VMware triggered savings Global player Local player SME Note Continuous Improvement Projects Continuous Business Improvement Process Design Organizational Changes Technical Setup 90% 85% 80% 1, 2 Business Setup Interfaces Project Management Testing Training 35% 30% 23% 3 Continuous Technical Improvement Continuous Technical Improvement 50% 50% 50% 1, 2, 4 Rollouts Rollouts 22% 18% 10% 2, 4 Consolidated Level 1 Savings: 20% 18% 25% Table 13: Continuous Improvement Projects Where are the potential savings of 18%-25% in the Continuous Improvement Projects category coming from? Business effort will stay the same independent of running SAP on VMware, but the technical setup on VMware is much easier. When VMware is used, you just add another resource that you need. The simple expansion and scaling of SAP instances, in the case of higher demand due to an increasing number of users or new functions, is based on the ability to expand the capacity of VMware infrastructures. The VMware architecture is very flexible and extensible. White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 26

27 The provisioning and management of SAP training and test systems can be simplified and accelerated using cloning and recovery functions. Fallback scenarios (return to original state in case of failure) are available right out of the box. Note Note Area Effect (1) Planning Due to hardware standardization or even better, left over space on existing servers, the effort for planning in setting up servers for projects is reduced. (2) Flexibility Adding/Removing compute resources or storage to virtual machines based on demand. Adding/Removing virtual machines based on demand. Quick and easy installation of SAP Systems due to the usage of preconfigured templates. (3) IT process standardization (4) Homogeneous landscape while expanding Creation of (individual) templates to provide test- and training systems. Surrounding systems of a SAP landscape (e.g. FTP Server, Print Server, ) can be hosted and operated on VMware as well. White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 27

28 5.6 Upgrade Projects There is a cost reduction potential of 24% - 36% in the area Upgrade Projects: SAP TCO model VMS VMware triggered savings Level 1 Level 2 Level 3 Details Global player Local player SME Note Upgrade Projects Application Upgrade Process Design Organizational Changes Technical Setup 90% 82% 76% 1, 4, 5 Business Setup 3, 4 Interfaces 15% 15% 15% 3, 4 Project Management Testing Training 35% 30% 23% 2 System Upgrade System Upgrade 81% 75% 64% 3, 4, 5, 6 Consolidated Level 1 Savings: 26% 24% 36% Table 14: Upgrade Projects Where are the potential savings of 24%-36% in the Upgrade Projects category coming from? Additional machines fully equipped with all necessary software can be added with a mouse click. Note Note Area Effect (1) Planning Due to hardware standardization or even better, utilization of left over space on existing servers, the effort for planning in setting up server for projects is reduced. (2) Flexibility Quick and easy provisioning of test- and training systems on demand. White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 28

29 (3) Speed Reduction of upgrade runtimes due to options for adding temporary additional application servers or compute resources. (4) Options to react Fallback scenarios (return to original state in case of failure) available right out of the box. (5) IT process standardization (6) Investment protection Simple expansion and scaling of SAP instances in case of higher demand due to increasing number of users or new functions based on the ability to expand the capacity of VMware infrastructures as the architecture is very flexible and extensible. x86 based systems plus VMware are versatile. That protects any such platform investment in case of changing demands that require real additional hardware resources. White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 29

30 VMS AG Headquarter: Burgstrasse Heidelberg Office Berlin: Prenzlauer Allee Berlin Germany Tel Fax info@vms.net White Paper TCO Study for SAP on VMware Content and Design 2012ff by VMS AG Page 30