Google Cloud Platform has expanded its attempt to become hyperscaler of choice for SAP with Google's new partnership with Lemongrass.
Lemongrass, an Atlanta-based firm, is a cloud managed services provider (MSP) that formerly focused exclusively on offering SAP services for AWS. Lemongrass' services include SAP S/4HANA migrations, as well as hosting and managing SAP infrastructures and applications.
Lemongrass is a relatively small MSP in a market dominated by industry giants including IBM, Accenture, Deloitte, Infosys, Cognizant and Tata Consultancy Services. Starting in 2010, the company has carved a niche as a specialist in SAP migrations to the AWS cloud, as well as providing cloud hosting and managed services. Lemongrass currently runs more than 6,000 SAP servers and supports around 300,000 users across 20 countries, according to the company.
The new partnership is recognition that the cloud hyperscaler market competition is heating up, and that SAP and Google are becoming more aligned.
SAP on GCP a no-brainer
Lemongrass had been a "one-trick pony with SAP on AWS," said Joe Coyle, chief strategy and alliances officer at Lemongrass, but it became increasingly clear that SAP on Google Cloud Platform (GCP) was becoming a force in the hyperscaler market.
"It became a no-brainer pretty quickly that in order to scale this business and not to miss the next rocket in the hyperscaler world that we were going to have to take our skills and port them over and innovate with SAP on GCP," Coyle said. "We are going all-in now on GCP, not so much just doing SAP migrations, but we look at GCP as the ultimate innovation platform going forward."
Lemongrass will provide its standard SAP migration services, he said, but it will now be able to take advantage of GCP's tools for data analytics, AI and machine learning.
"The main reason [why SAP customers] are targeting to port SAP workloads on GCP is for that wealth of tools that they can surround themselves with and make the SAP data more strategic because of the way you can use GCP tools on it," Coyle said.
Security is another reason why companies are considering moving SAP onto GCP, he explained.
"When you look at the closed-loop network and the security parameters that are in place, that's probably the second-biggest reason," Coyle said. "When you combine those two, the innovation and the security, it's a no-brainer. "
Lemongrass has also expanded to provide services for SAP on Azure, although the managed service provider's focus will be stronger for GCP, he said.
"We will work with Azure as a Gold Partner, but we look at this strategic piece of GCP to be much more important [than Azure], just because of where [GCP is] in the market and the [amount] of growth that's coming," Coyle said.
SAP migration experience needed
The partnership with Lemongrass helps Google address the growing demand for SAP customers to move to the public cloud, a market that is poised to grow substantially, said Snehanshu Shah, managing director of SAP solution engineering at Google.
"We've been talking about SAP in the cloud for the last few years, but the reality is the majority of SAP customers have not migrated," Shah said. "Some customers like Home Depot have taken the big leap into the cloud, but those are few and far between. Most customers have a small workload, but the majority of their workloads are sitting on-premises or in private clouds."
Google was interested in partnering with Lemongrass because of its experience in doing SAP migrations, he said.
"We looked at the expertise that Lemongrass brings for doing rapid zero-downtime migrations and helping customers run their SAP systems faster and better, because this frees up customers to innovate," Shah said. "Customers are looking for a partner that knows SAP very well, but also knows data very well. They want a single partner that understands SAP and can run SAP, but also understands how they can leverage GCP's data, AI and ML capabilities in SAP."
Plus, Rise with SAP, SAP's program to provide customers with a SaaS model to migrate legacy systems to the public cloud, is also providing market opportunities for MSPs like Lemongrass, according to Shah. When it was first introduced in January, Rise with SAP offered customers the opportunity to deploy S/4HANA in the public cloud hyperscaler of choice, under one contract from SAP.
While this arrangement appeared to circumvent MSPs, SAP is leaving plenty of work for the MSPs, Shah said, and customers have said that they want more choice in who migrates their systems and manages and upgrades their applications.
"SAP is saying we will provide the software as a subscription, which is a big advantage for midsized customers," he said. "They'll provide services like managing the HANA database and some of the core SAP Basis functions, but anything beyond that -- extensions or upgrades -- the customer manages directly with a partner."
Growing market for cloud managed services
The addition of SAP workloads on GCP, along with adding services for Azure, shows that Lemongrass is not content to keep all of its eggs in the AWS basket, said Predrag Jakovljevic, principal industry analyst at Technology Evaluation Centers, an enterprise computing consulting firm in Longueuil, Quebec.
The market for managed services providers like Lemongrass for SAP and other ERP systems on public cloud infrastructures is likely to grow, Jakovljevic said, because of concerns about public cloud security as well as aging and shrinking IT staffs, as the MSPs can take on the work that IT departments may not have the capacity to handle.
"We'll likely start to see that more managed services solutions will continue to appear for SAP and Oracle," he said. "You could see these managed services appear for complex SCM [supply chain management] and PLM [product lifecycle management] solutions, too."
The partnership with Google should provide Lemongrass with the opportunity to expand business globally, according to Jakovljevic. The partnership will also benefit Google.
"Google will be able to start picking off AWS and Azure clients," he said. "With more platform options, you could see lower cost solutions for IT."
More importantly, the partnership will benefit SAP customers, as they have more options for putting workloads on the public cloud, he said.
Lemongrass' move to expand its footprint makes sense, said Joshua Greenbaum, principal at Enterprise Applications Consulting, an enterprise computing industry consulting firm in Berkeley, Calif.
"GCP is emerging as a stronger partner than AWS for a lot of sectors where Amazon competes directly with its AWS customers, and that's going to be more and more important as AWS' parent company continues to expand its lines of business," Greenbaum said. "It wouldn't surprise me to see a company like Lemongrass use this new arrangement to start migrating existing AWS customers to GCP, or at least spin up new instances of SAP on GCP for its existing AWS customers."
Rise with SAP is increasing opportunities for MSPs, according to Greenbaum.
"The 'one handshake' contract [with SAP] doesn't necessarily mean that customers can now just let the hyperscalers do all the maintenance and support for their SAP instances," he said. "Many MSPs have specific domain knowledge and their own tools for managing complex SAP instances that frankly are better than what the hyperscalers have. Once customers get out of the deep infrastructure and look at the higher-level business processes, they'd rather trust an independent MSP to do that high-level support than a commodity priced hyperscaler."
Jim O'Donnell is a TechTarget news writer who covers ERP and other enterprise applications for SearchSAP and SearchERP.