Posted On: January 14, 2020

Tips for Maximizing Savings when Migrating ERP Footprints to the Cloud

As the 2020’s begin, Cloud computing’s transformation of the ERP space is well underway. While SAP, Oracle JD Edwards and E-Business Suite will remain a fixture of the business landscape, the Cloud will dramatically simplify the cost and complexity of ERP infrastructure management in the coming decade.

Although migrating to the Cloud simplifies ERP infrastructure management, charting the course to the Cloud that makes the most sense for your business can be complicated.

This means CIO’s, ERP Managers and IT Directors need to calibrate their Cloud strategy carefully to ensure that they maximize the value and savings they gain when migrating to the Cloud. Below, we outline the basics of Public, Private and Hybrid Cloud solutions and provide tips for maximizing savings in each.

Maximizing Cost Savings in a Private Cloud

The first point that ERP application decision makers need to keep in mind is that, in many ways, the Public Cloud is like a public utility. Public Cloud providers are similar to utilities such as natural gas or legacy landline long-distance providers in that they bill you based on your consumption.

So while moving your Oracle E-Business Suite, JD Edwards or SAP applications to a Public Cloud will save you money, you need to understand that your IT infrastructure costs might fluctuate.

At first glance, this might seem to conflict with a CIO’s or ERP manager’s perpetual goal of establishing predictable costs, but a closer look reveals that the Public Cloud’s cost structure actually offers concrete advantages. The Public Cloud’s utility-like billing structure offers ERP users a near risk-free way to test and experiment.

This is because the Public Cloud lets you cycle down or even deactivate environments when they are not in use. For example, you can shut down your test and/or development environments at night, when no one is using them. Likewise, you can reduce the amount of Cloud computing resources dedicated to your production environment during non-peak times.

  • So the Public Cloud’s variable cost structure ultimately paves the way for considerable savings.

Contrast that with ERP users who’ve spent heavily to build the infrastructure needed to support on-premise ERP. These users don’t have that flexibility, because they’ve already paid for all of the hardware and must continue to pay to maintain it and support it in a secure environment whether they’re using it or not.

So, when looking at Public Cloud providers such as Amazon, Azure and/or Oracle Cloud Infrastructure (OCI), you need to select one that offers a purchasing model that matches the application tier usage patterns of your current SAP, Oracle E-Business Suite and/or JD Edwards environments.

Typically, Public Cloud workload-based billing models are either offered as on-demand options, which closely resemble a utility company’s billing structure or a “compute commitment model.” The “compute commitment model” offers a more predictable pricing structure but provides less flexibility.

Public Cloud providers also often give ERP users an option to select a “spend commitment model,” which offers a utility-like model for storage, compute and other aspects of the Public Cloud instead of focusing on workload usage.

Regardless of which Public Cloud billing model you choose, you must carefully consider your ERP environment’s automation needs. All Public Cloud providers offer clients capacity and cost management tools. However, ERP systems like Oracle EBS, JDE and SAP are extremely complex, and creating application-specific rules that accurately reflect business requirements within a Public Cloud environment can be a real challenge.

Decision makers considering moving to a Public Cloud need to give this issue careful consideration and should partner with someone who has the experience and application-specific tools needed to manage this issue.

Maximizing Cost Savings in a Private Cloud

With the Public Cloud offering so many advantages, decision makers often question whether either moving or staying on a Private Cloud remains a viable ERP infrastructure strategy in 2020.

The answer is that, for many organizations, Private Cloud is a practical option for ERP applications such as Oracle JD Edwards, EBS and/or SAP and will remain so for the foreseeable future.

Moving to a Private Cloud is often a wise choice for ERP users whose environment requires maximum flexibility and who face multiple unknowns. Users who find themselves in these situations should seek a Private Cloud provider who offers an all-inclusive model that delivers cost-predictability if not outright cost-certainty, and one which ultimately will result in savings.

SAP, Oracle EBS and JDE users who have highly complex environments should also seek Private Cloud providers who offer application-specific and/or workload-specific value-added services and tools. These providers can help ERP users save money because they bundle application management costs. Further cost savings can be realized by partnering with a Private Cloud provider who offers inclusive service packages that bundle items such as technical upgrades and/or migration services.

ERP users who are considering working with a Private Cloud provider need to do their due diligence carefully to ensure that they’re only contracting for services that they know they’ll need. Likewise, they should pre-negotiate the cost of any add-on services that they may need to be incorporated during the term of the contract.

Maximizing Cost Savings Using a Hybrid Cloud Model

Some ERP users are going to find that neither a Public Cloud nor a Private Cloud is going to be right for them. In those cases, a Hybrid Cloud model is going to work best.

As the name implies, a Hybrid Cloud mixes resources from both Public and Private Clouds. Finding cost savings in a Hybrid Cloud model lies in striking the right balance between which workloads and applications they place in specific Clouds.

Maximizing Cost Savings When Using Multiple Clouds

Oracle E-Business Suite, JD Edwards and SAP users who need to use multiple Clouds typically find cost savings by shifting resources based on usage, capitalizing on Public Cloud vendor incentives and of course by outsourcing the support and management of their environments.

Often times ERP users can find further savings by optimizing their application, database and middleware licensing structure across various clouds.

Right Cloud Your ERP Solution with Syntax

Public, Private and Hybrid Cloud models offer ERP users tremendous cost savings, provided users choose wisely.

Syntax maintains robust partnerships with major Public Cloud providers such as Amazon, Azure and OCI, and the Syntax Enterprise Cloud® is North America’s largest Private Cloud for ERP. These assets give Syntax a unique ability to help ERP users chart the course to the Cloud that makes the most sense for them.

There are a number of ways to begin that process today: