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Good afternoon everybody,

I hope that everyone reading this blog already got their hands on SAP Cloud Appliance Library (http://cal.sap.com) in order to experience the new SAP delivery service for traditional SAP Systems into the cloud. Don’t worry if not, there is always time to catch up on that. Once you navigated to the SAP Cloud Appliance Library page you can instantly make yourself familiar with the workflow and the process of the deployment of so called try-before-you-buy “Trial and Developer Editions” from SAP. Of course there are plenty of them available and after registering your cloud provider credentials we deliver these Trial and Developer Editions directly into your cloud account. This is actually your chance to get your hands on a HANA Developer Edition that is deployed on the Cloud or even an SAP BW on HANA Trial system that is running on super-fast 244GB Servers in the cloud. Imagine how much hardware you would need to place below your desk in order to make that happen 😉

So, while getting familiar with how everything works you might have noticed that there are other SAP Systems (we call them Solutions in CAL) available in the overview list. To unlock them you need 2 things in place: 1) to have the SAP perpetual license for the product and 2) you would need to purchase the SAP Cloud Appliance Library subscription. The subscription itself is currently listed with 750€ to get access to the complete library and is available either in the SAP Store or through your account executive.

“Wait a second, my company already purchased the SAP license, why do I have to pay for this now extra?”

Well, this is a very valid question and for the answer I’d like to project that to a real world example to explain it better. When you need a new sofa you usually visit a furniture store and find a great piece of furniture; an awesomely looking sectional sofa. Once you paid for the sofa at the cash register you usually go around the corner straight to the delivery service counter of the furniture store and they offer you to have the sofa delivered to your home and have it assembled there. For this service there is a deliver (and maybe an assembly) fee included which you usually are OK with to pay. The reason is obvious, it is much more convenient for you.

So how does that relate to the model with SAP Cloud Appliance Library at all? Think of the sofa as SAP software incl. the license and the furniture delivery service is the SAP Cloud Appliance Library subscription. The only difference is that the subscription is like a flatrate for sofa deliveries (for any models in the catalogue) as long as you keep only one sofa at home. Although you already have a license for the SAP product the delivery service flatrate from SAP Cloud Appliance Library is not included. And we don’t want to include this service into the license free because maybe you like the idea to install the software on your own without the upcharge of an unnecessary delivery service.

“But wait another second; I build up an SAP System in-house for less than 750 Euros. Why do you charge so much?”

Well, that this question may arise too. Fair enough – and in order to understand the mechanics better let’s take a quick but holistic look at the expenses for installing and configuring an SAP System. You would need to have someone building up the infrastructure, install the operating system, install some virtualization software, do the OS configuration, get you the DVDs for the software, do the SAP installation (SAP & DB) and do the basic configuration for the database and SAP. All these activities are going to takes quite some time. Let’s be very optimistic that you can do all that in 100 hours and each hour accumulates another 100 Euros labor costs for your company – you will end up with 10,000 Euros for just installing the system. Not to mention the additional wait time of almost 3 weeks (assuming a 40 day working week) until you get your hands on the system.

So the math is quite simple:

Option 1) 10,000 Euros + 3 weeks waiting

Option 2) 750 Euros + 30 minutes waiting

Please note that we did not look at the infrastructure/hardware costs which will be easily another 20,000 Euros for Option 1. Depending on the t-shirt size and scheduling options (24/7 vs. 9/5) you would need to add 500-1000 Euros per month for Option 2.

“Wait, wait, wait; you are comparing capital expenses of Option 1 with the operational expenses of Option 2. That’s like a flawed comparison!”

Well, this is absolutely true and it is probably a decision from your CFO or the financial officer in your department which kind of expenses you should keep an eye on. Hardware that was purchased in Option 1 could be reused for various other things in case it was just for a PoC, sure. However, there is Moore’s Law so you would need to keep investing because the old hardware is deprecated. Also take into account that there are downtimes to replace broken parts. Overall, why not let the cloud provider do this for you 😉

Ultimately you also need to ask yourself how agile you want to be. Having a state of the art SAP system up and running in a matter of 30minutes compared to working & waiting 3 weeks (and this is really a very good guess) … OK, enough said, I think you are geting what I want to say.

Now, it shall be your decision.

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