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Google's SAP on GCP investments may pay off

Investing in data centers and bringing on former SAP executives, Google is hoping to turn its cloud platform into a public cloud destination for SAP customers.

Google doesn't want its cloud platform to be considered the third-best public cloud hyperscaler for SAP S/4HANA workloads.

The multinational tech company in Mountain View, Calif., is making a clear push to market its Google Cloud Platform (GCP), a suite of cloud computing services, as the preferred destination for SAP systems. One of Google's most significant moves is its considerable investment in data centers that are dedicated to running SAP ERP systems and other SAP applications on GCP, said Snehanshu Shah, managing director of SAP partnerships at Google.

The data centers are located in Frankfurt, Germany, not far from SAP headquarters in Walldorf, and provide three specific functions for SAP on GCP, according to Shah. They are as follows:

  • an SAP development environment enabling customers to build and manage S/4HANA and other SAP applications;
  • as host for some of SAP's SaaS applications, including its HCM suite SAP SuccessFactors; and
  • a managed environment for customers such as government entities that cannot use the public cloud due to regulations.
Snehanshu Shah, managing director of SAP partnership, GoogleSnehanshu Shah

"These data centers are all built by Google, they're all exactly the same, the entire stack is completely vertically integrated," Shah said. "There's an enormous amount of security that goes into this and we want to protect customer data, so everything is encrypted in flight. The SAP workloads are in our data centers because we built our own virtual machines to control all of this infrastructure."

SAP customers want two basic but essential characteristics in their public cloud environment, Shah explained: They need to make sure that their mission-critical systems don't go down, and they need their systems to be highly scalable.

Massive move to public cloud

One thing that has changed dramatically in the past year due to the COVID-19 pandemic is the willingness of companies to put mission-critical systems in the public cloud, Shah said.

"For SAP customers, there's a massive move to public cloud between all the hyperscalers, so you're no longer the first, you're the thousandth," he said.

He believes interest is skyrocketing for a few reasons including resiliency and security.

"Cost and business continuity is one thing that we're seeing with COVID, the other is security," he said. "The amount of security resources that any public cloud has dwarfs anything that even a large Fortune 100 company can have, and that's critical for a lot of SAP customers because at the end of the day its financial data and you do not want anybody tapping into that."

Rodan + Fields, a skin care company in San Francisco, is one SAP customer that has taken advantage of GCP's single instance public cloud capabilities.

Steve Dee, Global CIO and CTO, Rodan + FieldsSteve Dee

Rodan + Fields sells its products directly to consumers via its website and through a network of 300,000 consultants. The company has an SAP-based environment that includes SAP ECC and SAP Hybris, according to Steve Dee, Global CIO and CTO at Rodan + Fields. The company initially hosted its SAP systems on a private cloud network but decided to move to GCP two years ago when the private cloud couldn't handle increasing business demands.

The business has huge spikes at certain times of the year, such as at the end of each month when consultants tend to increase their sales activities, and Dee said they needed to have a public cloud environment that provided stability, security and scalability.

"We rarely go on sale, and when we do, it generates a huge amount of demand," Dee said. "For example, on Memorial Day we did 10 to 15 times the amount that we'd do on a normal day. So, the ability for us to scale in those spikes is one of the top reasons for being on Google Cloud."

You don't have to worry about managing a data center, you just have to worry about the functionality.
Steve DeeGlobal CIO and CTO, Rodan + Fields

Rodan + Fields is running its e-commerce sites on SAP Hybris and is using SAP ECC for its back-end business systems but is planning an S/4HANA migration in 2021, Dee said. It will also make the ERP migration easier, as it takes away the need to think about all the infrastructure and application management issues, he said.

"That's one benefit of the cloud; it takes managing infrastructure from the buy, build out, wire, all your heating, cooling needs -- you don't have to worry about managing a data center, you just have to worry about the functionality," he said. "As we think about next-generation technologies like S/4HANA, the faster you can get there the better, and it gives you options around machine learning and more automation."

SAP, Google Cloud cross-pollination

SAP on GCP may get a leg up on the other cloud hyperscalers because several ex-SAP executives work at Google, said Jon Reed, analyst and co-founder of Diginomica Ltd., an enterprise computing news and analysis site. That roster includes Shah, who spent 11 years at SAP, as well as Rob Enslin, president of Google Cloud sales, who was formerly the president of SAP cloud business group.

Jon Reed, co-founder, Diginomica Ltd.Jon Reed

"Google Cloud is something of a dark horse [as a public cloud hyperscaler] because of all the SAP cross-pollination within Google Cloud," Reed said. "There are pros and cons to each different cloud environment, and that's part of what customers will look at going forward, so Google having so many SAP engineers under the hood, in theory, would provide them with some valuable capabilities."

Google's ex-SAP contingent can be a critical difference as SAP wants its customers to see the public cloud as a place to get the most out of S/4HANA's modern ERP capabilities, he said.

"One thing that SAP has been hammering away about lately is this idea that the hyperscalers can provide the same level of experience and access to innovation, rather than just throwing up your ERP system into the cloud and just letting it sit there," Reed said.

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