September 13, 2011

3 Min Read
Will Customers Run Red Hat-SAP Combo In Amazon's Cloud?

By samdizzy


It’s one small step for Red Hat, Amazon Web Services and SAP. Specifically, Red Hat Enterprise Linux (RHEL) running SAP solutions can now be deployed in the Amazon Elastic Compute Cloud (EC2). But are customers willing to make a giant cloud computing leap with the three technology companies?

Yes, we’re tracking each company’s specific cloud strategy:

  • Red Hat: In addition to promoting RHEL, Red Hat also promotes enterprise virtualization (RHEV), OpenShift (platform as a service) and CloudForms (Infrastructure-as-a-Service). Watch for a potential update at

  • Amazon: Some pundits think Amazon Web Services will generate $1 billi0n in annual revenues as soon as next year. Impressive.

  • SAP: The SAP Business ByDesign suite hit a few bumps a year or two ago, but it seems like SAP has steadily improved the SaaS platform in recent quarters.

But here’s where things get tricky: Will enterprise customers actually embrace a Red Hat-SAP combo out on Amazon’s public cloud? And can SAP channel partners assist in that migration process? I think it’s too soon to say — though it’s good to see SAP, Red Hat and Amazon laying the groundwork for such migrations.

Holding Onto Data

RHEL has gained critical mass as a software foundation for many public clouds and on-demand cloud services. However, I think big businesses will hold firm to their in-house SAP deployments.

I simply can’t see CIOs letting go of their SAP data and allowing it to run out on Amazon’s public cloud. And I doubt major SAP channel partners will tell CIOs to shift their applications to the cloud. At least not yet, especially when evaluating SAP Business ByDesign may be a smarter first-step move.

But keep an eye on long-term market opportunities. In the SAP Business ByDesign scenario, SAP’s own cloud essentially manages customers’ data. But in the Amazon Web Services scenario, I wonder if it will be possible for MSPs and VARs to set their own cloud pricing while assisting customers with the public cloud efforts.

Expressing Confidence & Making Moves

Despite my near-term skepticism, Red Hat, SAP and Amazon sound upbeat. In a prepared statement, the three companies say:

“SAP sees a steady stream of customers moving to the cloud with many currently creating their landscape of SAP solutions to become “cloud ready.” Customers are looking for fast-scaling and pay-only-for-what-you-use flexibility associated with cloud computing. Red Hat already delivers an open source, enterprise-ready platform in support of SAP applications on premise. Through this expanded cooperation, customers can leverage Amazon’s EC2 for running SAP applications on Red Hat Enterprise Linux. This will enable customers to utilize the world-class support options available from Amazon, Red Hat and SAP in a collaborative way.”

Also of note: Sybase, an SAP company, is developing new tools to help ISVs (independent software vendors) build multi-tenant, hosted applications. The solution is known as SQL Anywhere OnDemand Edition. Translation: There are clear signs that SAP wants to empower customers with public cloud applications.

But this isn’t going to be an overnight transition. Generally speaking, I think large ERP customers running SAP and Oracle will be laggards in the cloud migration. Global 2000 companies trust their own data centers and their own IT departments. For them, I think cloud services remains a department-level opportunity for multiple niche applications. At least for now.

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