SAP.info: If you go along with what the analysts are saying, you come to the conclusion that virtualization is the “silver bullet” to counter spiraling server and energy costs. Mr. Treitz, does your VMS study “TCO Study on Vblock” confirm this?
R. Treitz: Nobody needs to fire away at their hardware, and ready-made solutions lead us to believe that the world is simpler than it really is. What the analysts say about the hardware being more efficient is no doubt correct. In our study, one of the subjects we examined was hardware investment – and we identified application and database server savings of up to 86%. That sounds phenomenal, but it doesn’t necessarily have that much significance for companies that use SAP.
SAP.info: Why is that? How did you reach this conclusion?
R. Treitz: When we look at SAP operating costs, the facts are what matter. And the facts say that investment in hardware and system software makes up 4% of the total cost of ownership – or TCO – and the cost for operating hardware and software just 7% of TCO. From that, we can deduce that a saving in hardware investment comes to just about 86% of 4%, which is only 3.4% of TCO.
SAP.info: So companies that run SAP shouldn’t really bother with thinking about virtualization?
R. Treitz: No, quite the opposite. First, a 3.4% saving for SAP operations is not to be sneezed at. But the greater economic benefits are in a different area. These do not automatically ensue once a virtualization product has been purchased. If you do your homework and use virtualization as part of your architecture as a whole, you’ll be richly rewarded. In the end, you’ll save between 12 and 14% of TCO by transferring to a completely virtualized IT environment.
SAP.info: How should a company proceed, if it wants to tap these benefits?
R. Treitz: SAP’s TCO model and our cost distribution model, which we calculated using more than 2,400 SAP systems, offer some orientation about assessing the different influence factors. These reveal that the most expensive factors can be found in the areas of application operation, continuous improvement, and upgrades. This is a result of the continuous expansion of functionality in SAP landscapes. If you want to cut TCO, you need to ensure that the application becomes cheaper to maintain. And here, virtualization can have a greater leverage effect on TCO than in the area of “bare metal” procurement.
For people in charge of a company’s SAP environment, the biggest advantage of virtualization is flexibility. The flexible setting up, enhancement, shrinking, or copying of SAP instances makes working in implementation, change, or software maintenance projects much, much easier.
SAP.info: In various publications, such as your TCO Study on Vblock and your study on Dell VIS, you analyzed the extent of expected savings. How did you reach the results?
R. Treitz: Every SAP landscape is unique. That’s why, in the Vblock study, we analyzed the influence of virtualization using three different company profiles – multinational conglomerate, large company, and midsize business – as prototypes. For these types of company, the TCO model was fed with data from the VMS benchmark base. And I stress here that this is genuine data from the 2,400 real SAP infrastructures we measured. Then the TCO models for the three different company types were assessed for an environment without virtualization, for a virtualized environment, and for a virtualized environment with a standardized management set such as Vblock.
For the Dell VIS study, which we did shortly before SAPPHIRE NOW in Orlando, we looked at a specific case study, namely the University of Kentucky. This one example showed even higher savings than we determined for the prototypes.
SAP.info: Where are the possible pain points of virtualization for SAP operations?
R. Treitz: In discussions about virtualization, companies tend to forget that they’ve got another technical component on their hands. Having more products means that you’ll need additional skills to operate them, and having more technology means more potential sources of error. At the end of the day, you have to guarantee the smooth combination of several virtualization techniques, in other words, of virtual servers, virtualized SAN, a database product, and the SAP Basis technology. Here, there’s the danger that the providers will blame each other for any issues that may arise. That’s why it’s essential to certify the products with regard to each other and SAP.
SAP.info: What should companies do to steel themselves for these problems?
R. Treitz: I don’t advise buying a virtualization product simply as an “additional” part of an existing architecture. Vblock and Dell VIS offer more here, namely an almost complete architecture including standardized management tools. These processes are maturing at an astounding pace.
While the first solutions available were restricted to integrating the technical side of things, new solutions can really deal with applications, for example, they can perform fully automated system copies. A single management tool unites the provision of servers, storage, and the necessary activities in the SAP data. This reduces the amount of work, the sources of error, and the time until provision drastically. Here, technology brings direct benefits in terms of costs and quality.
SAP.info: So all problems have been solved?
R. Treitz: No, unfortunately not. There’s still plenty of homework to be done. At the technical level, SAP needs to work on the dynamic assignment of memory. There are still deficits here, which result in the SAP system needing to be restarted in certain situations.
And some legal matters need clarification. If the German banking authorities (BAFin) demand that SAP test and production systems are not allowed to run together on one server, then the providers must be able to demonstrate that the virtualization technology is “separated in the same way as the hardware.” So there’s still plenty to do for all parties involved.