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Do I Need a Hyperscaler? Or More Importantly, Do I Want One?

It’s been said often lately that technology is changing so fast that it is hard to keep up. Businesses are constantly shifting to invest and do more with their IT architecture as they pivot and change. During these challenging times, it is important that companies are making the right technological investments to reap the greatest benefit. A transition to a hyperscaler may be just the investment.

Let’s Start Simply

Do you know what a hyperscaler is and how it can greatly impact your business? A hyperscaler is a Cloud and Internet provider that offers scaling cloud services focusing on IaaS. Now, what does that mean? In simpler terms, hyperscalers are companies that dominate the Public Cloud IaaS market and allow companies to run applications and store data in their virtual servers. What does SAP have to do with them, and how are they involved in this? SAP and these big companies are now global strategic service partners meaning that if you are a customer of SAP, you can choose between data centers hosted by SAP and those run by our partner Infrastructure-as-a-Service (IaaS) providers. Hyperscalers have played a huge role in helping businesses stay on track during these challenging times.

How Cloud Has Helped During the COVID Crisis

COVID-19 has not only affected business revenue, but it has also affected the way businesses are run. With most non-essential businesses switching to remote work, companies must make sure their IT landscape is close to flawless for their employees to work from home. The COVID-19 pandemic is driving businesses in almost every field to deploy a remote workforce model overnight. This shift comes with instant need for cloud-based productivity and collaboration applications. Since organizations are looking to virtualize elements of their infrastructure, they need more cloud capacity to support these changes. Organizations already want to virtualize some of their infrastructure which requires more cloud capacity to support those changes, and that is where hyperscalers come in. Every company has had plans to digitalize their infrastructure, but when COVID-19 hit, they had only a short period of time to make those changes. Hyperscalers helped many businesses employ their new and necessary work-from-home solutions in just a few hours compared to a few months since virtually all businesses were on a time constraint.

Hyperscalers have helped the transition to a remote work force become easier, but that is just one way they have been beneficial during COVID-19. Let’s take a retail store selling groceries and personal care items, for example. During COVID-19, retail stores were closed due to stay-at-home orders. Suddenly retailers had to completely rely on their ecommerce sites in order to generate revenue. There was a great influx of ecommerce orders since their customers were not able to physically go to the store and shop. They were not able to handle the influx of data and their system could not handle the volume. It is essential for the ecommerce site to have a reliable IT infrastructure to support the abundance of orders especially when unexpected times, like COVID-19, hit. Hyperscalers can support spikes in workload. Using a hyperscaler would allow this retail store to process their online orders in a timely manner to maintain customer satisfaction while still being able to handle an increase in ecommerce orders. The ability to scale when needed like this provides benefits in the future as well when there are seasonal spikes or if customers make their online shopping more of a habit.

Even though hyperscalers offer a simplified and secure IT landscape, companies can be apprehensive in making the investment. This recently happened to manufacturing giant, Siemens, as detailed here, but, they quickly realized that their best option was to combine the existing landscape of SAP solutions with a hyperscaler solution. Their existing IT service were not able to provide the flexibility needed for business cases to scale. Siemens had already decided to set up SAP S/4HANA in a supplier’s environment, but they were not originally planning on using a hyperscaler. When the hyperscaler was combined with the SAP Cloud Appliance Library tool, Siemens was impressed with how fast it was. Because they implemented the hyperscaler, they were able to quickly respond to project demands all while giving more flexibility to their business cases. Siemens is positive that hyperscalers will provide the service levels that are necessary for the future.

Why You Want a Hyperscaler

It would be remiss in any discussion of moving business to the cloud to overlook the capital expenditure versus operational expenditure discussion (CapEx vs OpEx).  In the good old days, companies would buy their servers and had to base that purchase on estimates of their peak volumes.  This approach risked the situation where businesses were paying for unused system availability in order to avoid system crashes during peak times and leaving their customers with a bad experience.  Since it was a capital expenditure, there were also the accounting hassles, tax troubles depending on your locality, as well as maintenance expenses.  Since cloud is a subscription, it is categorized as an operational expense and many of drawbacks of capital are removed. This is a simplification or course but when added to the capability to meet system needs when and where they are needed and scale back when they are not, makes the move to cloud very attractive.

This is what lead many businesses to plan a move to cloud and/or hybrid scenarios in their IT strategy before the start of 2020.  The global crisis has accelerated those plans for many businesses and far from being a drawback, this is setting them up for the future.  According to McKinsey, some of these changes will become business habits.  From the workforce perspective, the ability to work remotely either all or part of the time may be key to attracting and keeping talent.  Consumers who become accustomed to an online experience may continue to fill their cupboards with these services long after the pandemic.  And more and more businesses will find quick adaptations in supply chain are crucial to facing unforeseen future crises all while currently reaping benefits such as increased transparency.

The reality during this global crisis is that companies need to concentrate on their core business and their core business is not hosting their IT applications. Instead of worrying about data growth and system availability, the focus needs to be making, selling, shipping, and providing service. By letting hyperscalers take on the hosting role, companies can concentrate on their core business with the added benefit of paying for what they need when they need it.

Transitioning to a hyperscaler can seem like a daunting task.  It’s a task that needs a plan. Where do you start?

How SAP MaxAttention and SAP ActiveAttention Help You Transition

No journey should start without knowing the route to your destination and your transition to a hyperscaler is no different. SAP is equiped to know how to run SAP applications and has experience working in collaboration with hyperscalers. We maintain partnership with the major hyperscalers, and have reference architectures in place that ensure the new deployment model delivers the best value to our customers. SAP MaxAttention Services helps customers just as they are starting to plan their journey with a Hybrid Cloud Strategy service for example or architecure planning, to create a transition strategy and a roadmap for  their system landscapes. Safeguarding your journey to the cloud, experts are ready with knowledge of technical architecture, security, and software change management to aid implementation. SAP MaxAttention services don’t stop when your transition is complete.  Here you can take advantage of optimized end-to-end hybrid operations.

And don’t forget your data!  Another benefit you can take advantage of via a hyperscaler is leveraging data on disparate databases and merging it together to create more comprehesive business analytics.  So while the benefits of moving workload to the cloud are more immediate, it sets your business up to adapt to future changes and use analytics to aid business decisions.

Moving Forward

Many businesses had to make a shift towards having an online presence because of COVID-19, however, not all businesses were well equipped for the volume influx. Implementing hyperscalers can be good for businesses now and in the future because in the ever-evolving market, hyperscalers can handle the variety of changing demands which can set a company apart from its competitors. The future for many businesses is uncertain right now due to these unforeseen circumstances, however, the future using hyperscalers is looking brighter than ever.

 

Authors: Markus Steer, Michael Hueller

 

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