SAP TCOROI Customers Final

TCO and ROI Analysis of
SAP Landscapes using

VMware Technology
WHI T E PAP E R
TCO and ROI Analysis of SAP Landscapes
using VMware Technology
WH I T E PAP E R / 2
Table of Contents
Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Overview of the TCO/ROI Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
The Four TCO Categories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Downtime. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Operation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Hardware and Software. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Direct and Indirect Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
TCO Calculation and Improvements for Virtualized SAP Systems. . . . . . . . . . . . . . . . . . 11
TCO Calculation for SAP Data Center Server Hardware. . . . . . . . . . . . . . . . . . . . . . . . . 11
Requirements and Sizing for New and Reused Hardware. . . . . . . . . . . . . . . . . . . . . 11
Methodology for Calculation of Hardware Requirements. . . . . . . . . . . . . . . . . . . . . 12
Productivity Improvement with New Hardware. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SAP Data Center Storage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
TCO Calculation for Data Center Server Storage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Calculation of Storage Requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Storage Productivity Improvement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
SAP Data Center Networking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
TCO Calculation for Data Center Networking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Methodology for the Calculation of Network Requirements. . . . . . . . . . . . . . . . . . 15
Productivity Improvement due to Network Virtualization. . . . . . . . . . . . . . . . . . . . . 15
Data Center Server Space. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Data Center Power and Cooling. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
TCO Calculation for Data Center Power and Cooling. . . . . . . . . . . . . . . . . . . . . . . . . 15
Calculation of Power and Cooling Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Productivity Improvement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
SAP Data Center Provisioning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
TCO Calculation for Server and Software Provisioning. . . . . . . . . . . . . . . . . . . . . . . .17
Methodology for the Calculation of Provisioning Savings. . . . . . . . . . . . . . . . . . . . . .17
SAP Deployment Provisioning Improvement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
SAP Data Center Server Administrative Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Resource requirements for newer SAP releases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
TCO Calculation for SAP Administrative Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Methodology for the Calculation of SAP Administrative Costs. . . . . . . . . . . . . . . . 19
Improvement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Reduced Business Risk. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
TCO Calculation for Business Risk. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Methodology for the Calculation of Business Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Improvements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
SAP Clustering. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
TCO Calculation for SAP Clustering. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Methodology for the Calculation of SAP High Availability. . . . . . . . . . . . . . . . . . . . .21
Improvement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
SAP and VMware Server Load Balancing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
TCO Calculation for Load Balancing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Improvement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
SAP Installation and Upgrades. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SAP Installation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SAP Downtime Minimized Upgrade Method. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SAP Resource Minimized Upgrade Method. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Building Up an SAP Landscape. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
SAP Software and Hardware Maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
SAP Support Packages.....................................................23
SAP Kernel Patches. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Industry-Standard (x86) Hardware Maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Non-Industry Standard Hardware and Software Contracts. . . . . . . . . . . . . . . . . . . .24
SAP Enhancement Packages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
TCO Calculation for SAP Maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Improvement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
SAP Planned Downtime. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
Methodology for the Calculation of SAP Planned Downtime. . . . . . . . . . . . . . . . . . .25
TCO Calculation for SAP Planned Downtime. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
Improvement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
VMware Infrastructure investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
VMware Infrastructure Licensing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
VMware Infrastructure Training. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
Training Class Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
VMware Virtualized SAP Environment Design and Planning. . . . . . . . . . . . . . . . . . . . . .28
Heterogeneous or Homogenous SAP Migration Costs. . . . . . . . . . . . . . . . . . . . . . . . . . .28
Investment for SAP Physical to Virtual Migration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
System Copy Categories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SAP Heterogeneous System Copy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SAP Homogenous System Copy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Physical to Virtual Migration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
VMware Converter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Customer P2V SAP Migration Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Use Case Scenarios Before and After Virtualization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SAP Solution Architecture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
Customer SAP Solution-Based Landscapes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SAP Landscapes Before Virtualization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SAP Landscapes After Virtualization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Annual Hardware and Software Cost Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Annual A/C and Power Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Annual Cooling Costs for SAP Servers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Deploying an SAP Solution with VMware Templates. . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
Cost of Deploying a Solution Before Virtualization. . . . . . . . . . . . . . . . . . . . . . . . . . . .39
Cost of Deploying a Solution After Virtualization. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
High Availability and Clustering. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
SAP Database. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
SAP Message and Enqueue Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
HA and Clustering Before Virtualization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
HA and Clustering After Virtualization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Summary of SAP clustering and VMware high availability. . . . . . . . . . . . . . . . . . . . .45
SAP Front End Client Systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
Client Systems Before Virtualization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Capital Investment in VMware VDI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Client Systems After Virtualization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
SAP Upgrades and Patches. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Upgrades and Patches Before Virtualization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
Upgrades and Patches After Virtualization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
TCO Reduction: Three Case Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
TCO and ROI Summary for Customer 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
TCO and ROI Summary for Customer 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
TCO and ROI Summary for Customer 3 without VMware VDI . . . . . . . . . . . . . . . . . . . 55
TCO and ROI Summary for Customer 3 with VMware VDI. . . . . . . . . . . . . . . . . . . . . . . .57
Customer 1 TCO /ROI Summary with Planned Downtime Costs. . . . . . . . . . . . . . . . . .59
Customer 2 TCO /ROI Summary with Planned Downtime Costs. . . . . . . . . . . . . . . . . .61
Customer 3 TCO /ROI Summary with Planned Downtime Costs. . . . . . . . . . . . . . . . . 63
Customer 3 TCO /ROI Summary with Planned Downtime Costs and VMware VDI. 65
Virtualizing Large Enterprise Applications with VMware vSphere. . . . . . . . . . . . . . . . . . 67
Executive Summary
This study examines how VMware software reduces total cost of ownership (TCO) for SAP landscapes. It focuses
on three German reference customers, representing three diferent industry sectors with diferent numbers of
concurrent SAP users.
SAP Customer Descriptions
CUSTOMER INDUSTRY SECTOR I MPLEMENTATI ON SCENARI O CONCURRENT SAP USERS
1 Automotive Heterogeneous SAP migration from a
mainframe to x86
400
2 Pharmaceutical Heterogeneous SAP migration from a
UNIX Cluster/Oracle to x86 hardware
200
3 Government Homogeneous SAP migration from
X86 physical servers into virtual with
VMware Converter
100
Source:VMwarepartnerAddOn
These customers have virtualized their entire SAP infrastructure together with the associated databases. Some
of the data was collected during the project phase using in-house questionnaires. All three customers run
productive SAP systems on VMware Infrastructure 3. The projects have been nalized to the customers
complete satisfaction. The detailed results for a three-year calculation before and after the SAP landscape
virtualization have been combined and can be found in the appropriate chapters following.
The following tables summarize the TCO and return on investment (ROI) calculations for the three companies
based on their successful migration from physical SAP environments to VMware infrastructure. All pre-dened
customer objectives have been fully achieved.
The cost savings for SAP planned downtime is based on an estimate of $120,000 US per hour, which can vary in
diferent use cases. The contribution to the TCO in this study is weighted at 30 percent. The planned downtime
reduction is achieved with the use of VMware VMotion and the simplication of building clusters.
Please note that all monetary amounts in this document are expressed in $US.
TCO Savings with VMware Virtualization
CUSTOMER
TOTAL COSTS
WITHOUT VMWARE
INFRASTRUCTURE*
TOTAL COSTS
WI TH VMWARE
I NFRASTRUCTURE
SAVINGS TCO IN %
Customer 1** $1,991,280 $372,321 $1,618,962 81
Customer 2 $772,131 $131,628 $640,503 83
Customer 3*** $252,765 $128,546 $124,219 49
Customer 3**** $399,165 $240,646 $158,519 40
* Reference prices based on customer information and quotes for pre-virtualization environment
** Value for simplied SAP Upgrade is included
***Value for VMware VDI is not included
****Value for VMware VDI is included
TCO savings with VMware Virtualization Including Costs of Planned Downtime *
CUSTOMER
TOTAL COSTS
WITHOUT VMWARE**
TOTAL COSTS
WI TH VMWARE
SAVINGS TCO IN %
Customer 1*** $ 5,447,283 $2,100,321 $3,346,962 61
Customer 2 $ 4,228,131 $1,859,628 $2,368,503 56
Customer 3**** $10,188,765 $5,312,546 $4,876,219 48
Customer 3***** $10,335,165 $5,424,646 $4,910,519 48
*Achieved through VMotion and simpler cluster build
**Reference prices based on customer information and quotes for pre-virtualization environment
*** Includes value for simplied SAP Upgrade
****Value for VMware VDI is not included
*****Value for VMware VDI is included
Customers 1 and 2 used UNIX and mainframe hardware before moving to virtualizing on industry-standard x86 systems.
Customer 3 used x86 systems before and after virtualization. For most medium-sized business customers this
example ts best.
Break even for all three customers was between one and six months.
Customer Objectives for SAP Virtualization with VMware
CUSTOMER OBJECTI VES ACHI EVED
Customer 1 Reduction of hardware costs
Reduction of hardware and
software maintenance costs
Yes
Customer 2 Reduction of hardware costs
Reduction of hardware
maintenance costs
Reduction of cluster costs
Yes
Customer 3 Reduction of cluster software
and maintenance
Reduction of external consultant
know-how requirements
Yes
Source:customers
Replacing expensive mainframe and UNIX systems with x86 and VMware virtualization technology reduces
costs signicantly
1
. Furthermore, customers achieve more exibility and higher availability with all their SAP
systems as well as simplied maintenance operations.
This study looks at the rst three years after virtualization. Once the SAP solutions have been virtualized and
encapsulated in virtual machines, further projects such as a technology refresh (migration to faster hardware
and storage) become much easier. Moreover, external consultant costs can also be reduced.
1 All customers had shared storage infrastructure in place prior to virtualization. As a result, the virtualization projects did not introduce additional costs
in that area.
Introduction
This document provides a detailed overview of how three organizations use VMware virtualization technology to
reduce TCO and increase ROI for their SAP solutions.
TCO is usually several times higher than merely the procurement costs. In addition to license costs for software,
it is also necessary to consider hardware costs, maintenance fees, personnel costs for implementation and operation,
and expenses for user training and licenses. The calculation of the total cost of ownership provides important
information for planning and implementing projects and consolidating system landscapes, (dened as optimally
combining components from diferent scenarios and integrating them on one physical server, as far as possible).
Increasing cost pressures for companies make it necessary to merge systems, data, applications, and access to
programs, and thereby achieve corresponding savings. There are various models for calculating TCO, including
those devised by analyst rms Gartner Group and Alinean, each of which takes diferent costs into account.
The common goal of all TCO models is to split the total costs into blocks to identify the cost drivers within the system
landscape. In this study, together with three customers with diferent user requirements from diferent industry
sectors, we have analyzed TCO and ROI using the VMware/Alinean model. For SAP landscapes several adjustments
were necessary. In addition, SAP aspects like clustering, deployment and patch scenarios enhance this model.
Several other TCO/ROI methodologies for VMware are available, but no single one covers the specic requirements
and approaches for mission-critical Enterprise Resource Planning (ERP) applications such as SAP. Nearly all enterprise
core business processes can be represented by this software.
SAP software is complex, with many dependencies related to customer needs. High availability, exibility, scalability
and reliability are key requirements for its users. Before SAP solutions can be used, many customizations are
required. SAP is a multi-user environment, where 500 or more users can work simultaneously in the same
system. Diferent operating systems and database platforms are supported by SAP, including UNIX, Windows,
and Linux. (In conjunction with VMware, however, only Windows and Linux operating systems are supported.)
These conditions make it necessary to adhere carefully to specic requirements when installing, supporting,
maintaining and upgrading an SAP landscape.
To understand the benets of running SAP solutions on VMware virtualization technology and the resulting
calculation and measurement methods for the TCO/ROI study, this paper explains technical issues, procedures
and best practices for running SAP solutions successfully in a virtualized environment. Following these procedures
will result in customer cost savings.
To summarize:
This document describes a number of diferent areas where customers can save time and reduce costs by
running SAP solutions on VMware virtualization platforms.
Another topic is the performance improvement observed after virtualization. For example, background jobs
run 40 percent faster than they did on the older hardware.
This TCO/ROI study was validated together with our partner AddOn, which hosts the SAP Virtualization Competence
Center in Europe. The study analyzes three diferent projects planned and implemented by this partner.
The intention of this paper is to help organizations quantify the current before VMware cost of ownership for SAP
solutions-based landscapes. The study shows the after VMware scenario, quantifying the cost savings and the
initial investments to set up and deploy the virtualized SAP data center.
The methodology uses proven nancial techniques, industry research, VMware eld and customer data and
user-provided metrics to quantify the values. The TCO/ROI analysis formula subtracts the after VMware
scenario from the before VMware scenario to document the change in TCO and other benets from the
VMware solution over a three-year period.
The ROI analysis formula compares the savings with the incremental investments as a percentage to illustrate
the ratio of returns versus investment (ROI = Total Cumulative Savings / Total Cumulative Investments).
Overview of the TCO/ROI Methodology
SAP recommends securing the productive SAP ERP system (PRD) with one or two additional systems in front
called Development (DEV) and Quality Assurance (QAS).
Furthermore, all other SAP solutions such as SAP Enterprise Portals, SAP Exchange Infrastructure Systems and
SAP Business Warehouse (Business Intelligence) should be handled in the same way. The collection of three
independent systems for each SAP solution is called an SAP landscape.
The customers in this study, regardless of the number of users working concurrently, have followed this
recommendation. As a result, these customers have to manage several servers with diferent requirements and
high availability criteria.
For all three reference customers in this study, physical DEV and QAS systems were under-utilized in terms of
CPU and memory consumption.
One way to reduce the total costs of servers is to improve asset utilization through workload consolidation. Over
a 24-hour period, we have seen utilization of DEV and QAS systems at less than 20 percent of x86 and other
hosts (UNIX, mainframe) computing capacity. One of the reference customers has a worldwide presence and, as
a result, some of its systems have no idle periods. Nevertheless, the customer is not an exception to the rule:
most of its physical systems are under-utilized.
Using these utilization values we can consolidate SAP DEV and QAS systems with a ratio of 4 or 5 to 1. This
means that ve SAP systems can be hosted on one well-sized VMware ESX host server. The number of virtual
machines that can be hosted on one ESX host server is always dependent on the underlying physical hardware.
The SAP PRD system is in all three customer cases a mission-critical enterprise solution. SAP denes some
prerequisites for such systems:
The SAP release must be supported, together with the VMware software
The resources of SAP virtual machines should not be over-committed.
In this study, all calculation parameters for hardware and software vendors are anonymous. This allows a better
comparison among the three analyzed project implementations, focusing on the VMware benets and features
for SAP Landscapes.
The Four TCO Categories
For our SAP / VMware study, we have chosen the Alinean/Gartner model with adapted contribution values for
SAP implementations. This best reects the Cost of Operation of an SAP solution. Costs are divided into four
major categories. The following table shows the four cost categories and their contribution to the TCO.
COST CATEGORY CONTRI BUTI ON TO TCO
SAP APPLI CATI ON
ACTI VI TI ES
Downtime 30% Planned and unplanned downtime
Users afected
Operation 40% SAP maintenance
Support
Deployment
Maintenance
Process and planning
Upgrades
Energy consumption
COST CATEGORY CONTRI BUTI ON TO TCO
SAP APPLI CATI ON
ACTI VI TI ES
Administration 10% Asset management
Firmware upgrades
Procurement
Training (IS, end-user)
Hardware, software 20% Hardware, software
Additional management software
Supplies
CostcategoriesandtheircontributiontoTCO
Source:Kagermann,HenningProf.SAPPressbookSAP-Solutions
Downtime
Controlling and reducing the downtime of a dedicated SAP system is a critical success factor in an enterprise.
External consultants work in DEV systems, while most of the SAP application users work in the productive SAP
system. In the event of massive failure or disaster, hundreds of SAP users are unable to read and write business
data from the ERP system. One of our reference customers operates in the automotive sector. He told us that in
the event of an unavailable SAP system, supply trucks would not be able to deliver or charge parts. The whole
logistics department would come to a standstill. There are many examples of the business need for high
application availability; without it, the business loses money.
Downtime can be due to a user waiting for a service desk problem to be resolved, to planned maintenance, or to
unplanned failures (e.g. network outage, database outage, application outage, etc.).
Operation
Day-to-day operation of an SAP system requires a great deal of attention. The architecture of an SAP system
consists of:
Operating system
Database
SAP software release
Additional SAP servers for the dialog instance
Each component must be integrated and monitored separately with system management software. SAP has an
integrated Computer Center Management System (CCMS), but it only allows control and monitoring of an
individual SAP system itself. Commonly, complex business processes are spanned over other application
solutions as well. There is a need for additional system management software to take precedence and control
over all business system members.
Operational elements comprise the technical staf resources including in-house staf, contractors, and
outsourced management and support contracts. Included in this accounting are costs by operation subcategory
(Technical Services, Planning and Process Management, Database Management and Administration, and Service
Desk) and, for actual data collection, expense responsibility (Corporate IS, Business Unit IS).
To help in evaluating this cost we have obtained global values from IS management and have evaluated
management time surveys.
Administration
Sometimes SAP administration interferes with SAP operation. However, we focused on asset management,
rmware and hardware upgrades, procurement and training (for both IT staf and end-users).
WH I T E PAP E R / 1 0
Hardware and Software
SAP places very restricted requirements on hardware for diferent SAP solutions. For a productive use of SAP
systems on virtualized hardware, SAP supports the virtualization solutions VMware ESX version 3.x. SAP
exclusively supports 64-bit Windows as the operating system for virtual machines on AMD and Intel processors.
On these operating system versions, all SAP applications (based on SAP NetWeaver Application Server ABAP
and Java) that are supported on physical hardware are also supported on virtualized hardware.
Direct and Indirect Costs
Besides the classication into categories, we have split the calculation of costs into
direct (budgeted) costs
indirect (unbudgeted) costs
Direct (budgeted) costs are the capital, fees, and labor costs spent by the corporate IT department and
business unit IS groups for delivering information technology services and solutions to the organization and
users. Direct costs capture actual costs for all direct expenses related to clients (mobile and desktop), servers,
peripherals, and the network in the distributed computing environment.
Indirect (unbudgeted) costs measure the efciency of IT in delivering expected services to end-users. If IT
management and solutions are efcient, users are less likely to be burdened with self- and peer support as well
as downtime. If IT management and solutions are inefcient, users typically must spend more time supporting
themselves and each other (self- and peer support) and are afected by more downtime.
Indirect costs by denition cannot be measured directly and there is not always a direct causal relationship. But
efcient IT spending can have a direct positive impact on end-user productivity. On the other hand, inefcient
spending or cuts can cost an organization more because of lost productivity.
A very good example of indirect costs is energy costs. All three reference customers handle power for the SAP
server as global costs.
TCO Calculation and Improvements for
Virtualized SAP Systems
TCO Calculation for SAP Data Center Server Hardware
SAP data center server workloads can be consolidated with virtualization. Customers generally achieve a
consolidation ratio for SAP development, quality assurance, training, and demo systems of between 4:1 and 5:1,
depending on hardware.
In mission-critical SAP environments, customers typically use a dedicated VMware ESX instance for the SAP production
system, because SAP strongly advises against over-commitment of system resources for production environments.
Prices used in this study are based on systems with two-core and four-core sockets from Intel and AMD. After
consolidation, unneeded system hardware can be reused or reallocated to other applications and future server
purchases can be delayed or avoided.
The following table shows x86 hardware prices only:
Annual Costs of Certied Servers for SAP Systems*
CPU CAPACI TY (SOCKET) ANNUAL SERVER COST
1 CPU $5,000
2 CPU $7,500
4 CPU $17,300
8 CPU $33,000
16 CPU $45,000
32 CPU $77,000
*Source:Internalcustomerinformation.Pricesincludechassis,CPUs,32GBRAM,andtwolocaldisks.NetworkandSAN
aretalliedseparately.
Within this document, when we refer to reuse of an application server we mean reuse as a VMware ESX host,
because most of the reusable SAP servers are certied for VMware ESX as well. This is an important factor in the
TCO/ROI calculation and lowers the cost for purchasing ESX host systems. All three reference customers
described here have purchased new multi-core server equipment for VMware ESX version 3.5.
To calculate servers for both the As Is and Projected environments, the consolidation savings are considered
over the entire analysis period. We have examined the amortized server capital cost and the annual support and
maintenance contract costs for the current installed base, as well as costs for the consolidated environment.
For the TCO data center hardware calculation we have used the formula:
Annual SAP hardware and software savings = Total servers * (cost per server) As Is Total servers with
VMware ESX * (cost per server/useful life) Projected
Useful life in SAP hardware cycles = 3 years.
Requirements and Sizing for New and Reused Hardware
Reducing the number of physical servers denitely has a positive impact on the TCO calculation, but the
virtualized SAP infrastructure must meet at least the same or, preferably, achieve even better performance
values, availability, scalability, and reliability as the physical environment.
To meet these demands, all three customers in this study have gone through an SAP virtualization assessment.
This service is ofered and delivered by VMware and AddOn Systemhaus, a VMware partner located in Walldorf,
Germany. VMware and AddOn jointly host the SAP Virtualization Competence Center (http://www.vcc-sap.
com). The assessment evaluated performance values of the existing physical SAP servers over a specic time
period (in this case, between four and six weeks) to obtain information about the sizing of the VMware ESX
hardware and the number of VMware ESX instances necessary to virtualize the existing SAP servers.
Typical daily business workload and sporadic peaks occur in this measurement window.
Methodology for Calculation of Hardware Requirements
VMware Capacity Planner is a tool used in the SAP Virtual Assessment. The tool discovers and catalogues
relevant server information, and measures performance values over a dened time period. The measured data is
stored locally or can be transferred to a VMware store called https://optimize.vmware.com.
Hardware discovery occurs after the tool is installed and properly congured. The following gure shows an
example of a Capacity Planner report on discovered systems and includes information about the server chassis.
Figure 1b following shows an extract of an SAP server performance assessment:
Figure 1a:exampleofaCapacityPlannerreportondiscoveredsystemsandincludesinformationabouttheserverchassis.
Figure 1a:exampleofaCapacityPlannerreportondiscoveredsystemsandincludesinformationabouttheserverchassis.
After evaluating the data over a period of time, the number of VMware ESX instances is calculated.
SAP Assessments help to calculate the number and sizing of the VMware ESX host servers needed to provide
robust and well-scaled SAP systems in a virtualized environment.
Productivity Improvement with New Hardware
All three customers have reported performance improvements with their virtualized SAP systems.
According to the SAP basis team of one reference customer, after successful migration of the productive SAP
system with approx. 400 concurrent SAP users, they have seen a dramatic improvement in SAP system performance.
HARDWARE
AV. RESPONSE TI ME
I N SAP
DB REQUEST TI ME
I N SAP
DB DI RECT
READ I N SAP
AV. CPU-TIME
As Is 900 ms 500 ms 9.5 ms 177 ms
Projected
(in a VM)
568 ms 326 ms 5.2 ms 10 ms
The most surprising efect is the runtime of a Material Requirements Planning (MRP) background job. Physical
hardware calculates the job in 10,000 seconds; with the virtualized infrastructure it takes only 6,000 seconds.
Another customer has assigned more memory to the SAP system in the virtual machine, because legacy hardware
did not have enough physical memory to increase the total amount. This has a positive impact on performance
because of the settings of database and SAP bufers, e.g. the SAP Parameter abap/bufersize for the Advanced
Business Application Programming (ABAP) programming bufer.
SAP Data Center Storage
There are several ways to connect VMware ESX hosts to shared storage. Shared storage is a prerequisite for
using the VMware High Availability (HA) feature. The following access technologies can be used with VMware
and SAP solutions.
TECHNOLOGY PROTOCOLS TRANSFERS INTERFACE PERFORMANCE
Fibre Channel FC/SCSI Block access of
data/LUN
FC HBA High (due to
dedicated network)
iSCSI IP/SCSI Block access of
data/LUN
iSCSI, HBA, or NIC Medium (depends
on integrity of LAN)
NAS IP/NFS File (no direct
LUN access)
NIC and IP switches Medium (depends
on integrity of LAN)
Source:VMware
All of the reference customers use Fibre Channel technology, because iSCSI and NAS currently have 10 Gbit/sec
network hardware limitations (driver availability) and prerequisites (10 Gbit/sec switches). Nevertheless, using
iSCSI or NAS can dramatically reduce costs for the network infrastructure. With NAS and iSCSI, no Fibre
Channel assets are necessary.
TCO Calculation for Data Center Server Storage
One of the key cost factors in implementing a SAN architecture is the need for every server to be connected to a
shared storage. This connection requires an investment in purchasing, deploying, and managing host bus adapters
(HBA) to connect the servers to SAN fabrics. Each virtualized SAP system reduces the cost of implementing a
SAN by reducing the number of SAN switches and HBAs needed.
All of the customers in this study already have a Fibre Channel SAN; therefore an investment in new storage
technology was not necessary.
The following algorithms were used to calculate the storage TCO in this study:
Savings on HBA = ((Number of HBAs) * Price per HBA)/Life per Server) As Is (same) Projected
Savings SAN switches = ((Number of SAN Switches) * (Price per HBA) / (Life per Server) As Is (same)) Projected
Each server is calculated with 2 HBA for trespassing reasons.
SAN switches are calculated with 24 ports.
Calculation of Storage Requirements
We used the inventory function of the Capacity Planner tool to analyze how many servers As Is had HBAs built
in, since these HBAs were consequently attached to the SAN fabric as well.
As a result, we got a percentage As Is of servers attached to the SAN. In the projected environment we assume
100 percent of servers are attached to shared SAN. Attached to shared storage, these new servers become
highly available because they can leverage the VMware HA feature.
As part of the VMware Virtualization Check, we obtained the I/O requirements for trafc between the SAN and
the physical SAP machines. They are shown in Figure 1, in the Disk columns showing utilization in Transactions
per second and MB per second. In addition, we checked and proved the results in the SAP systems with the help
of SAP mechanisms (e.g. SAP Transaction ST04).
Typically, a Fibre Channel Disk in a SAN environment is able to deliver 180 I/O per second. Taking the storage
RAID level into consideration, the number of disks needed in a SAN can be calculated.
Storage Productivity Improvement
In the beginning of SAP migration project discussions, customers were very skeptical about gaining SAN
improvements from SAP virtualization.
From a performance point of view they were right; there is no big diference between accessing data from a raw
device (i.e. without using the VMware vStorage Virtual Machine File System) physically or virtually. Once we
explained VMware Storage VMotion, however, customers saw the advantages immediately. This feature allows
the movement of complete SAP system data (virtual OS, SAP and database les included) to other storage areas
while the SAP system is up and running, and what is particularly exciting even to other SAN boxes, regardless
of vendor and access type (iSCSI, NAS or Fibre Channel). Just imagine how difcult it is to migrate data from
one SAN storage provider to another. The cost benet of this capability is hard to calculate in a study such as
this one, but many external consultant days can certainly be saved.
Another benet for one of the reference customers was the ability to simplify his SAP ofine backup strategy.
Other features like data reduplication have not been analyzed. Specic storage tools from diferent vendors are
being used by the customers, but this is outside the scope of this study.
SAP Data Center Networking
An efcient SAP system has to communicate over the network, with adequate response times, with hundreds of
SAP front end applications. SAP systems are typical client-server systems: a query is sent from the client; the
result set is calculated and sent back by the server.
To satisfy availability and Service Level Agreement (SLA) policies, typical physical SAP servers have redundant
network team-enabled cards built in.
TCO Calculation for Data Center Networking
The number of physical network components, and thus the necessity of implementing diferent team-enabled
drivers for diferent operating systems, is reduced with VMware virtualization technology. With fewer physical
servers attached to the network, fewer switches, ports, NICs, and cables are required to provide server
connectivity for the corporate network. One customer said: After virtualization, we completely lled one ofce
room with useless network cables.
For this study we used the following equation to calculate savings on networking components:
Annual network savings = round UP (Number of servers * Number of NICs per server * Number of ports per
NIC) / Number of ports per network switch) As Is (Same) Projected
Methodology for the Calculation of Network Requirements
The total number of network cards is delivered by the discovery function of Capacity Planner in the Inventory
section. We were able to see how many network cards in the SAP systems were built in, and with the aid of
Capacity Planner, we could see the network trafc in MB/second.
Productivity Improvement due to Network Virtualization
There are many NIC vendors in the market, each with diferent rmware, ports, and device drivers. With
virtualization there is no need to pay particular attention to these details, because the network mechanism is
part of the VMware tools.
Apart from cost reduction and administrative simplication, one of the biggest benets of virtualization for SAP
projects is the ability to change the virtual network card connection to other dened virtual switches on the y.
Customers can clone complete SAP virtual machines for fallback, backup reasons, for the creation of a test system,
or for freezing errors for reproduction during an upgrade. Due to identical hostnames and IP-addresses, the cloned
virtual machine is redirected to an internal switch with no physical connection to the enterprise LAN. This switch
reduces the risk of generating problems and errors in enterprise networks.
It also saves time and costs for consultant services, since changing hostnames in SAP environments requires adjustments
in operating system environment variables, share or mount points, SAP proles, and SAP tables. An SAP system
with ABAP and JAVA stacks is even more complex.
Data Center Server Space
A reduction in the number of physical servers and SAN and network switches means reclaiming valuable data
center space. Expansion of future data center facilities and power requirements can be avoided. Typically,
special infrastructure (cooling racks and power systems, disaster resilience) is required for larger SAP systems
due to redundant power supplies, multiple CPUs, and memory requirements.
As a result of discussions with the customers who took part in this study we concluded that, for this TCO analysis
and all three reference customers, the countable monetary value of saving a few square meters is low. As a result
we have decided to exclude server, storage, and network space calculations from this study. One customer did
avoid having to perform a cooling efciency upgrade of his air conditioning thanks to virtualization, but this is
discussed in the next section.
Data Center Power and Cooling
SAP systems are typically installed and integrated in the common customer data center. The largest SAP customer
has implemented a redundant failover data center and replicates the storage data asynchronously to the failover
site with SAN storage tools.
Power consumption in a data center can be divided into three categories:
Operating power for the computing infrastructure, including server hardware, network switches, SAN components
Network critical physical infrastructure (NCPI), such as transformers, uninterruptible power supplies (UPS),
power wiring, fans, lighting
Cooling power for air conditioners, pumps, humidifers
TCO Calculation for Data Center Power and Cooling
Virtualization allows the number of physical servers to be reduced, along with related networking and data
center infrastructure. As a result, power consumption for operation and cooling decreases.
Power saving is calculated by the diferences in operating system power consumption and cooling power of
hardware before (As Is) and after virtualization (Projected), as follows:
Annual Server Cooling Power per Server = Operating Power per Server * Cooling Load Factor * Airow
Redundancy / Airow De-rating
To be fair, we have to acknowledge that, because of higher CPU utilization caused by higher consolidation ratios,
a VMware ESX host system requires more cooling and energy than a physical server that is used less optimally.
In addition to power consumption, servers produce heat and require substantial cooling to keep running.
Furthermore, the analyzed data centers have shown so-called hot spots, in which heat density is greater than in
other areas. Data centers require additional airow to account for inefciencies related to humidication.
Humidication is required to reduce damage resulting from a static discharge.
We used British Thermal Units (BTUs) for the calculation of the cooling device costs. One BTU is the amount of
heat energy needed to raise the temperature of one pound of water by one degree F. This is the standard
measurement for the amount of energy in fuel as well as the amount of output of any heat generating device.
3.41 million BTU = 1000 KW/h
2

100 servers retired is equivalent to taking 122 cars of the streets per year. A typical car over an annual
operating period produces nearly 12,000 pounds of CO2 emission or 600 gallons of fuel)
3

The electricity average price per hour in Germany in 2008 = USD $0.28 per 1 KW/h.
The data center operating hours of the participating customers = 8736 (24/7/52) hours.
Calculation of Power and Cooling Requirements
The operating power consumed by server hardware has been calculated by adding up the power ratings of each
server in the data center. Because this number represents the maximum power used, it should be de-rated to
achieve steady-state power consumption. In SAP environments we have seen an average running load factor of
50 percent and higher. This indicates that X86 servers consume between 50 - 70 percent of maximum rated
power on average. For the TCO calculation we used BTUs available for the cooling environment and the average
energy price per KWh in Germany in 2008 (see section 4.5.1). Together with the customers, we analyzed the
operating manuals of the server and cooling units, in order to work out how many KW/h are used before and
after virtualization.
The following table shows the power consumption of an X86 server:
SERVER WITH POWER WATT/H
POWER / DAY
I N KWATT
POWER / YEAR
IN KWATT
COST / YEAR
@ $0.28 KW/H
1 CPU 475 11.4 4161 $1,165
2 CPUs 550 13.2 4818 $1,349
4 CPUs 1150 27.6 10074 $2,820
8 CPUs 1600 38.4 14016 $3,924
16 CPUs 4400 105.6 38544 $10,792
32 CPUs 9200 220.8 80592 $22,565
Source:PowerConsumption:Alinean2007andaverageelectricalpowerpriceinGermanyin2008
2 http://www.physics.uci.edu/~silverma/units.html
3 Shulz, Garry, Storage Power and Cooling Issues Heat Up, May 21, 2007
http://www.enterprise storageforum.com.
Productivity Improvement
The best improvement we saw was in a customer data center that was lled with physical hardware where the
cooling system was operating at its limit. Decreasing the amount of physical hardware with virtualization saved
the customer from having replace its cooling environment.
With regard to energy and power consumption, there are a number of social and economical aspects to be
considered as well. Under the heading Green IT and carbon reduction, customers can use these savings as an
instrument to show the companys contribution to the ght against global warming. For simplicity, we have not
taken these criteria into consideration in our calculation model.
SAP Data Center Provisioning
With virtualization, it is easier to acquire, set up and deploy SAP hardware and software to meet increasing
demand. Typical customer SAP landscapes consist of development, quality assurance, and productive systems.
One customer in this study enhanced the landscape with a training system and an SAP Solution Manager.
The hardware setup consists of server unpack, network and power cabling, rack installation, and disk setup. The
SAP software deployment includes the installation of the operating system, database and the SAP software. In a
physical environment, a high availability cluster-enabled software must be installed as well.
TCO Calculation for Server and Software Provisioning
Provisioning savings are measured as the working hours saved in not having to provision servers manually. The
savings are calculated by multiplying the hours and the saved hourly wage of an SAP basis administrator.
For the installation of an SAP system we have calculated two full-time administrator days (16 hours) = Person
hours per Provisioning Event. Included in the installation are the pre- and post- installation steps of an SAP
Solution.
Annual data center SAP deployment provisioning savings = (Systems provisioned per year * Person hours
per provisioning event * Average hourly labor rate for SAP basis staf) As Is (Same) Projected
+
Annual data center server provisioning savings = Server provisioning per year * Person hours per server *
Person hours per provisioning event * Average hourly labor rate for SAP basis staf) As Is (Same)
Projected * 0.5 (improved deployment time)
Person hours per provisioning event = 3 hours
Average hourly labor rate for basis staf = US$45
Methodology for the Calculation of Provisioning Savings
With the aid of the SAP Virtualization Check we discovered the count of physical SAP systems, size of the SAP
landscape, and consequently the number of VMware ESX host servers required to meet the performance and
HA requirements for the virtualization project. With the aid of the HR department and in collaboration with the
stakeholders, we created an average hourly wage for the SAP basis administrator for each customer. Besides the
normal server installation, the SAP software deployment is considered and added to the TCO.
SAP Deployment Provisioning Improvement
VMware virtualization technology enables very fast deployment times to build up SAP landscapes. Depending
on the systems involved, we can reduce the provisioning time for a three-system SAP landscape from six days to
just under three days, for a 50 percent reduction in deployment time.
Initial SAP deployment savings = (Initial SAP Deployment) As Is (Same) Projected * 0.5 (improved
deployment time with VMware template technique)
SAP Data Center Server Administrative Costs
Reducing the number of physical assets helps to lower administrative costs. Physical server administration
includes changing the amount of physical memory and adding more CPUs (sockets) to asset inventory, and
managing security, disaster and recovery planning, as well as compliance management, vendor and contract
management, chargeback and nancial budget management.
In terms of software, fewer monitoring tools are necessary, which also reduces administrative costs.
The following table lists additional physical resource requirements for newer SAP releases.
Resource requirements for newer SAP releases
SAP RELEASE
ADDI TI ONAL
CPU USAGE
ADDITIONAL
MEMORY USAGE
ADDITIONAL
DISK SPACE
SAP R/3 Enterprise (4.7) Baseline Baseline Baseline
SAP ECC 5.0* 10% 10% 5%
SAP ECC 6.0** 15% 20% 10%
Source:*SAPNote778774
**SAPNote901070
The reason for higher CPU and memory usage is that newer SAP releases need additional indexes, use larger
table rows, support more database users or show diferent behavior of the cost-based optimizer of the databases.
Like every other software vendor, SAP follows a specic support and maintenance strategy. Some customers
have to upgrade to a newer SAP release due to the extended maintenance costs.
7-2 maintenance strategy for new releases of the core applications* of SAP Business
Suite: 7 years of mainstream maintenance, 2 years of extended maintenance.
Long-term planning security and higher return on investmentnine years maintenance horizon
Additional time to deploy and beneft from innovation delivered via enhancement packages
Less additional cost for extended maintenance
Figure 2:SAPMaintenanceStrategy
TCO Calculation for SAP Administrative Costs
Reducing the number of physical servers can reduce server administration labor costs, allowing reallocation of
resources to more strategic uses.
Total server FTE (Full Time Equivalent) = Total physical servers / Physical servers per FTE
Total server administration labor costs savings = Total server FTEs required * Average annual burdened
salary of SAP basis administrators) As Is (same) Projected
Methodology for the Calculation of SAP Administrative Costs
We pooled the information for the salary and external consultant support from the SAP basis team. The salary
information was obtained directly from the employees. This kind of information is very critical, and no HR department
was willing to give detailed information about the average annual salary. However, to verify what we learned
from the employees we compared the information with an IDC|Alinean survey conducted in 2007.
Improvement
As the SAP enterprise solution evolves to address more complex business problems, new versions of SAP
software and current capabilities are introduced. VMware virtualization can provide capacity on demand for SAP
functionality with minimal service interruption.
After the virtualization of physical SAP systems was completed, incentive pay for overtime of the SAP Basis
Team was reduced by 20%. Subsequently, fewer people have been necessary to administrate the SAP
Landscapes. External consulting services have been reduced.
All three customers benet by encapsulating their SAP systems into a virtual machine. Figure 2 shows how long
SAP estimates the lifetime for an SAP NetWeaver Version (6.40, 7.00), with the aid of mainstream maintenance.
Typical hardware amortization, due to lifetime and service contracts with the vendor, is between three to four
years. As a result, SAP customers need to redeploy the SAP release to a new piece of hardware once during its
lifecycle. Due to operating system and database dependencies, these are complex projects. All three reference
customers need support from diferent vendors and consultants (e.g. storage vendor, SAP consultants) for these
hardware refresh cycles.
With virtualization, SAP systems can be cold migrated to any new VMware-certied system with no change to
the core SAP application inside the virtual machine.
Reduced Business Risk
In case of a disaster, virtualization reduces risk because if provides hardware independence and built-in
mechanisms to reduce the downtime of SAP systems. Traditional disaster recovery solutions require redundant
productive hardware. An active-passive cluster for the database is also a mandatory failover mechanism to
prevent downtime. Server conguration and complex multi-step processes in bare-metal environments are
difcult and time consuming.
TCO Calculation for Business Risk
The following mathematical algorithm is used in this study.
Data center server disaster recovery savings = (Amount of disasters per year * Recovery time * Downtime
cost per hour) As Is (Amount of disasters per year * Recovery time * 25 percent (Reduced recovery time
with VMware) * Downtime cost per hour) Projected
The 25 percent reduction of recovery time is achieved with VMware Consolidated Backup in combination
with third-party backup and recovery solutions.
Methodology for the Calculation of Business Risk
In our projects we have tried to investigate the downtime costs per hour. These costs include the labor for IT and
the indirect impact of lost user productivity.
Unfortunately, opinions and calculations varied greatly within the companies; therefore we deferred to a study
from IDC|Alinean published in 2007. IDC|Alinean costs for downtime for typical applications are shown in the
next table.
Cost per Application Downtime/Hour
APPLI CATI ON TYPE COST PER DOWNTI ME HOUR BY APPLI CATI ON
Collaboration and Messaging $60,000
ERP * $120,000
Infrastructure/Productivity Tools $42,000
Line of Business Applications $120,000
Retail / Point of Sale $400,000
Scientic / Technical $85,000
Supply Chain Management $120,000
Trading $600,000
*SAPsolutionsareERPapplications
Source:IDC/Alinean
Alternative formula:
Downtime cost per hour = (Productivity impact to SAP end-user in %)* End-user burdened salary + costs
for, say, production stop, delivery bottlenecks, contract penalty, loss of reputation
Improvements
VMware virtualization works alongside SAP solutions to deliver enhanced infrastructure and high availability of
applications for critical business functions. Using VMware infrastructure, customers can implement a unied
disaster recovery (DR) platform that allows many production SAP virtual machine servers to be recovered in the
event of a failure, without investing in an exact replica of the production hardware. VMware infrastructure
capabilities such as VMware VMotion, VMware High Availability (HA) and VMware Consolidated Backup (VCB)
deliver enhanced levels of availability to virtualized SAP environments.
SAP Clustering
Two of the reference customers require an uptime of 24 hours 7 days a week, because they have worldwide
subsidiaries across global time zones with diferent working hours. Virtualization helps to reduce both planned
and unplanned downtime.
In a physical environment, SAP ofers SAP cluster solutions in conjunction with database and storage vendors,
which must be additionally implemented. This situation is described in one of the case studies below.
TCO Calculation for SAP Clustering
Clustering implementation costs are higher than hardware and software costs. We have used the following formula:
Annual SAP high availability savings = ((Hourly labor rate for IT system administrator staf) * (Person hours
to implement and test an SAP cluster) * Size of SAP solution + (Costs for additional cluster software) +
(Volume of additional server costs)) As Is (Same) Projected.
The SAP customers told us that to implement an initial physical SAP Cluster you need approximately ve
work days. An additional eight hours in maintenance time is necessary for SAP support stack scenarios in
comparison to a NON-cluster environment.
Methodology for the Calculation of SAP High Availability
We worked with the customers to analyze the need for SAP high availability. Traditionally, each SAP productive
system is a candidate for SAP high availability, as described earlier. With VMware virtualization, all SAP solutions
including those in DEV and QAS can benet from the VMware HA feature, at no additional cost.
Together with the customers, we analyzed the average baseline prices for the following products:
Microsoft Cluster
HP/Digital TruCluster
HP ServiceGuard
IBM HACMP
On average, the price for a two-node cluster in Unix environments is approximately $20,000 per year. A
Microsoft Cluster is calculated at approximately $2000 per year.
The customers told us that the implementation of an initial SAP Cluster requires approximately ve additional
work days. An additional eight hours is necessary in SAP support stack scenarios in comparison to a NON-
cluster environment.
Improvement
VMware HA provides cost-efective high availability for SAP applications running in virtual machines. In case of a
physical server failure, SAP virtual machines can be automatically restarted on other servers within the pool that
have spare capacity. VMware HA minimizes downtime and IT service disruption, while eliminating the need for
dedicated stand-by hardware. It provides high availability across the entire virtualized IT environment, without the
cost and complexity of failover solutions tied to either operating systems or specic applications. The VMware HA
feature is part of the enterprise license and can be activated in ve minutes for each kind of SAP solution.
The customers in this study report that single point of failure components like message server, enqueue service
and database components run reliably and need no additional attention from cluster service monitor
components. To monitor these SAP components, SAP CCMS features are used. VMware heart beat alarm
settings prevent unresponsive SAP operating systems.
SAP and VMware Server Load Balancing
SAP provides distributed transaction processing, automated load balancing, and replicated service framework
ofering high levels of scalability and resource optimization for the application environment. SAP environments
also have a built-in logon group load-balancing mechanism. This mechanism can be combined with the VMware
Distributed Resource Scheduler feature to assist with optimizing the infrastructure resources used by SAP and
non-SAP applications.
TCO Calculation for Load Balancing
There are no real formulas to calculate a TCO value for load balancing. The load balancing mechanism in VMware
can guarantee the performance values and thresholds dened in service level agreements.
Improvement
VMware infrastructure solutions support load balancing capabilities by addressing resource management across
the entire data center infrastructure and across multiple distributed SAP application servers. VMware Distributed
Resource Scheduler (DRS) dynamically allocates and balances computing capacity across a collection of hardware
resources aggregated into logical resource pools. VMware DRS continuously monitors utilization across resource
pools and intelligently allocates available resources among the virtual machines based on pre-dened rules that
reect business needs and changing priorities. When an SAP virtual machine experiences an increased load,
VMware DRS automatically allocates additional resources by redistributing virtual machines across the physical
servers. VMware DRS optimizes IT environments to align resources with business goals, while ensuring exibility
and efcient utilization of hardware resources.
SAP Installation and Upgrades
SAP solutions can run in physical environments on diferent operating systems and database platforms. Only
Windows and Linux (Red Hat, SUSE) operating systems are supported in a VMware virtual infrastructure. There
are some pre-conguration steps on the operating system level that are required before an SAP installation
takes place.
SAP Installation
The installation steps in a virtualized environment are the same as in the physical world and can be performed in
two days. With a virtualized environment, however, we have seen three benets in SAP installation scenarios.
SAP software DVD media management can be simplifed
Installation steps can be captured and recovered with the help of the VMware snapshot manager in VMware vCenter
Once an SAP system is installed, templates and clones can be made easily
In all three customer projects, the required SAP media DVDs were copied to a VMFS Disk and attached as a
temporary installation drive. After installation, this drive can be reassigned to other virtual machines.
An SAP installation typically consists of four phases:
Installation of the operating system
Installation of the database
Installation of the SAP executable
Initial import and load of the database with tables, felds, and data
After each successful installation phase, a VMware snapshot was made to allow roll back to a know clean state in
case of a serious error.
SAP upgrades consist of two phases:
Prepare
SAPup
In the SAPup phase there are two methods for importing the new release objects into the database. These
methods are:
Downtime-minimized
Resource-minimized
The following is a brief explanation of both SAP upgrade methods.
SAP Downtime Minimized Upgrade Method
Due to the size and volume of SAP packages (SAP support packages, SAP add-on installation packages, and
SAP add-on upgrades), import of the packages has a large impact on the duration of system downtime, when
no end-user is able to work. To reduce the downtime when importing SAP support packages, the downtime-
minimized import mode assists with importing the majority of the objects during production operation of the
system. In this mode, the objects are imported into the database in an inactive state, in which they are largely
invisible to the system. The system can continue to be used productively.
For this upgrade methodology, we strongly advise against the using VMware snapshots while end-users are
working productively. Data can be lost in the case of a rollback to older snapshots.
SAP Resource Minimized Upgrade Method
In resource-minimized environments, the system is down during SAP package import. The advantage of this
method is that the database log les do not really increase, because no end-users produce additional data.
This method is faster than downtime-minimized, but causes more downtime for the productive system.
With this method, VMware snapshots can prevent longrunning backup jobs performed by diferent
departments and people.
Building Up an SAP Landscape
Once an SAP system is installed in a virtual environment, VMware templates and the clone mechanism can be
used to create an SAP landscape of two to ve systems. SAP recommends the establishment of a three system
landscape with development, quality assurance, and productive systems.
SAP Software and Hardware Maintenance
From time to time, SAP publishes changes and corrections to its solutions in support packages. These support
packages are rst applied to the development systems. After a successful test they are implemented in the
downstream systems. Maintenance of the physical machines is also necessary, including such activities as doing a
rmware upgrade of a network card, a Host Bus Adapter Controller, or the addition of more memory or CPU capacity.
SAP Support Packages
An SAP system consists of diferent software layers, also called software components. All layers are regularly
updated using support packages; that is, errors are corrected and new functions are provided.
The SAP system should always be kept at the current correction status to prevent errors in the standard release.
In addition to the standard functions in an SAP system, additional functions are sometimes required for a
particular industry solution (IS).
Each SAP support package has a stack number based on an SAP release number. If a customer has diferent
SAP solutions and components, he has to deal with diferent SAP support package stacks.
In the table below the stack number 15 was released in the rst quarter for SAP ERP 6.0. The next, number 16,
is scheduled for August 2009.
Support packages and add-ons are installed in ABAP with an SAP transaction called SPAM and SAINT. For the
Java stack a tool called JSPM (Java Support Package Manager) is used.
SAP Support Package Schedule for 2009 and SAP Solutions
We recommend instantly rolling back SAP virtual machines using snapshots during patch problem resolution.
SAP Kernel Patches
The executable SAP programs are written in C and called SAP kernel. Each SAP release and SAP solution has its
own subset and version of these executables. The programs must be patched from time to time, due to database,
operating system, and release dependencies. Replacing these SAP programs causes SAP system downtime.
SAP kernel patching is a procedure in which the SAP programs are exchanged with current versions. Most of the
up-to-date SAP release kernels are downward compatible. During the startup of the SAP system, these kernel
programs are distributed to all attached SAP instances to make sure that every host or VM has the same patch
version and functionality.
VMware patches can be tested concurrently on multiple congurations (diferent versions of OS, SAP, Web, etc.)
that are hosted on the same physical system.
Industry-Standard (x86) Hardware Maintenance
New computer equipment is usually sold with a warranty. The guarantee period in Germany is two years, but
some vendors ofer longer warranties. If the computer fails during the warranty period, the vendor should
resolve any hardware problems at no additional cost. In addition, a customer can obtain an extended support
and maintenance contract.
On average, we calculate using the following values for x86 hardware maintenance:
SERVER TYPE REACTI ON TI ME (HOURS/DAYS/YEAR) PRI CE (USD)
2* Quad-Core 13/5/1 $450
4* Quad-Core 24/7/1 $840
Source:Customercontracts
Non-Industry Standard Hardware and Software Contracts
Two customers replaced their SAP systems running on non-x86 hosts with clustered environments with x86
technologies. The maintenance costs for the non-x86 hosts are signicantly higher.
TYPE REACTI ON TI ME (HOURS/DAYS/YEAR) PRI CE (USD)
Hardware 24/7/1 $46,000
Software - $20,700
We recommend dynamically reassigning SAP virtual machines with VMware VMotion to other systems while
performing maintenance or changes on the current physical system, thus causing minimal disruption to end-users.
SAP Enhancement Packages
The enhancement package for the SAP ERP application provides new or improved software functionality that
can be implemented in a modular fashion. There is no need for a major upgrade. New features and technical
improvements can be applied while the core software remains in place.
The enhancement packages include collections, or bundles, of enterprise services. Each bundle provides new
services as well as documentation on how the services can assist with extending and reconguring processes or
groups of related processes. Each bundle includes explanations of relevant processes, groups of processes, and
roles, along with descriptions of business objects and tips on how to implement the new services.
TCO Calculation for SAP Maintenance
SAP maintenance is one of the major cost drivers for the reference customers. However, SAP patches, new SAP
releases, are useful and necessary for reasons of new business functionality, security, and stability.
The calculation here is based on database sizes of nearly 500 GB.
SAP maintenance savings = ((SAP installation savings) As Is + (SAP upgrade savings) As is + (SAP patch
savings)) As Is (Same) Projected * 0.75 improved by VMware
SAP installation savings (initial three-system landscape) = (2 work days * three systems * Hourly labor rate
for IT system administrator staf per consultant) As Is (3 days for three systems * Hourly labor rate for IT
system administrator staf or consultant)
SAP upgrade savings = ((5 work days * 1 DEV system + 3 days * 1 QAS system + 3 days * 1 PRD system) *
Hourly labor rate for IT system administrator staf or consultant) As Is 0.8 *(same* Hourly labor rate for IT
system administrator staf or consultant) Projected
SAP patch savings (complete support package stack) = (2 days * Hourly labor rate for IT system
administrator staf) As Is 0.75 * (2 days * Hourly labor rate for IT system administrator staf) Projected
The SAP patch saving and the SAP upgrade factors of 0.75 and 0.8 are achieved by using VMware snapshot
and clone technologies.
Improvement
The new VMware clone and template technologies can save time and lower costs. Faster change management
with fewer system resource requirements can be achieved using new test patches concurrently on multiple
congurations (diferent versions of OS, SAP, Web etc.) that are hosted on the same physical system. With
VMware snapshots, the backup times for milestones in SAP patch upgrade scenarios can be accelerated and
resource utilization can be minimized.
SAP Planned Downtime
Planned downtime expenses are the annual losses in productivity due to planned unavailability of the SAP
system. SAP planned downtime can be categorized as:
Hardware maintenance (adding more memory, adding more CPUs, frmware upgrades to the controller, and so on)
SAP software maintenance (adjusting SAP parameters such as memory, bufers, security settings, etc.)
Applying new support pack stacks
Ofine backups
Methodology for the Calculation of SAP Planned Downtime
In the SAP virtualization projects, we evaluated these criteria together with the customers end-users. We performed
some end-user surveys and discussed the results with the IS management. For customers with 24/7 uptime, the
reduction of planned downtime is equal to the downtime of the production system.
TCO Calculation for SAP Planned Downtime
The SAP planned downtime depends on the company policies of the customer. The following values are taken
from SAP customer surveys. A customer with 24/7 operation hours has the following prerequisites per year.
Annual SAP planned downtime for maintenance*
PLANNED DOWNTI ME
FOR MAI NTENANCE
HOURS
UNAVAI LABLE
UNAVAILABLE PER
YEAR IN %
COST
Hardware** 4 0.05 $480,000
SAP Software per Central
Instance***
16 0.18 $1,920,000
* At least two SAP patch stacks per year per eight hours each
** $120,000 for SAP ERP
***The contribution to TCO in the nal calculation is 30 percent
In this study the calculation of SAP planned downtime is the same as for SAP unplanned downtime.
Improvement
With VMware VMotion technology, the planned downtime for hardware maintenance becomes zero. While the
SAP system is up and running, a hot migration to another VMware ESX host machine can be performed. Internal
service level agreements can be fullled more satisfactorily with VMotion.
Ofine backups can be completely replaced by VMware Consolidated Backup, with the aid of snapshot technology.
VMware Consolidated Backup provides an easy-to-use, centralized facility for LAN-free backup of virtual machines.
Consolidated Backup simplies backup administration, reduces the load for VMware ESX host machines, and
can reduce SAP downtime.
VMware Infrastructure investment
To achieve expected TCO savings, there must be an investment in VMware virtualization solutions. Customers
must take four areas into consideration:
VMware infrastructure licensing
VMware infrastructure training
VMware infrastructure design and planning
Heterogeneous or homogenous SAP migration costs
VMware Infrastructure Licensing
Deploying a virtual infrastructure requires a onetime cost of purchasing VMware software licenses, as well
as annual support und subscription costs. For an SAP solution as a mission-critical application, the VMware
Infrastructure Enterprise Edition is required. The Enterprise edition includes ESX, VMFS, vCenter Management
Server, Virtual SMP, VMotion, VMware HA, VMware DRS, and VMware Consolidated Backup.
The model derives the cost of software by dividing by two the total number of processors (socket) after
virtualization. One Enterprise Edition server license for every two CPUs is required after consolidation.
Recurring fees vary, depending on the type of support and subscription program purchased. VMware provides
Gold and Platinum level support contracts. Due to the need for 24 hours/7 days a week support for their SAP
environments, two customers chose the Platinum Support model and pay 25 percent (21 percent) of the
purchase price annually. We used the Enterprise Edition for the TCO calculation.
VMWARE VI EDITION DESCRI PTI ON VALUE SOURCE
VI Enterprise Edition
License Cost
Unit price VI $5,750 VMware Commercial Price List*
VI Enterprise Edition
License Units
Units to purchase Number of CPUs / 2 Calculated
VirtualCenter Management
Server License Cost
Unit price VC $5,000 VMware Commercial Price List
Subscription Factor Percentage of unit price
that yields annual fee
21% (Gold)
25% (Platinum)
VMware Commercial Price List
*Source: http://www.vmware.com/pdf/vi_pricing.pdf
TCO calculation:
Initial purchase = VI enterprise license cost * VI enterprise license units + VC management server license cost
VMware Infrastructure Training
A training class is available for VMware virtualized SAP environments. This class can be found in the ofcial
SAP training catalog. For calculation purposes, the number of classes required is dependent on the number of
administrators who require training. In addition, customers have attended the AD310 course classes for a better
understanding how a virtualized SAP environment can be management efciently.
Training Class Costs
CLASS TI TLE COURSE COST*
AD310: Install and Congure VMware for SAP Administration (5 days)* $4,500
*Source: SAP Education Training Catalog http://www.sap.com/education
TCO calculation:
Initial VMware infrastructure trainings costs = AD310 * SAP Administrators * course cost
Initial costs for knowledge transfer
CUSTOMER NUMBER OF ADMI NI STRATORS COST*
Customer 1 3 $13,500
Customer 2 2 $9,000
Customer 3 1 $4,500
*Source: Customer
VMware Virtualized SAP Environment Design and Planning
An SAP / VMware migration requires dedicated planning and design of the virtualized VMware servers and SAN
requirements, along with the adjustment of the SAP systems. Such a virtualization check, ofered by multiple
VMware SI partners, is used as the basis for the TCO calculation.
Cost of SAP Virtualization Check Ofered by a VMware Partner
CONSULTI NG PACKAGE COST
SAP Virtualization Check (dependent on size of SAP landscape) $7,000
TCO calculation:
Initial virtualization check costs = Amount of SAP landscapes * Fee
Initial cost for SAP Virtualization Checks
CUSTOMER NUMBER OF VI RTUALI ZATI ON CHECKS COST*
Customer 1 1 $7,000
Customer 2 1 $7,000
Customer 3 1 $7,000
Heterogeneous or Homogenous SAP Migration Costs
To facilitate the migration of physical SAP systems to a virtualized VMware environment, a certied SAP and
VMware migration consultant is needed. The time for the consultancy depends on the SAP database size. For
databases smaller than 500 GB, twelve days are assumed (5-Dev, 3 QAS, 3 PRD, 1-STDBY).
Typical Costs per Day for a Certied SAP Migration Consultant in Germany
SERVI CE COST PER DAY
Certied SAP and VMware Consultant Approx. $2,400
Source: VMware Partner
TCO calculation:
Initial Certied Consultant Costs = Number of days * Cost per day
Investment for SAP Physical to Virtual Migration
An SAP system migrated to other platforms with diferent databases and/or operating systems is called a
heterogeneous SAP system copy. If databases and operating systems remain the same, the migration is called
a homogenous SAP system copy. The procedures and tools are supplied by SAP. In the case of heterogeneous
SAP system copies, SAP strongly recommends the engagement of a certied SAP Migration Consultant. For
homogenous SAP system copies, there is no specic SAP recommendation. The table following shows the
decisions made by the three customers in this study on changing the operating system and the database for
their physical to virtual (P2V) migration.
Customer Changes to Operating System and Database for Virtualization
CUSTOMER
OPERATI NG SYSTEM
CHANGE
DATABASE
CHANGE
SAP SYSTEM COPY
PROCEDURE
Customer 1 X X Heterogeneous
Customer 2 X Heterogeneous
Customer 3 - - Homogenous
System Copy Categories
SAP Heterogeneous System Copy
A heterogeneous system copy is dened as one in which either the operating system or the database system or
both are changed. A benet of this kind of migration is the reorganization of the database and the combination
of SAP Unicode features. In SAP terminology, the database is exported to the le system and imported into the
target system.
SAP Homogenous System Copy
A homogeneous system copy is dened as one in which the target system uses the same operating system and
database as the source system. The database contents are copied from the source system to the target system.
This can be done by restoring a backup or with database export/import tools.
Physical to Virtual Migration
VMware Converter
VMware vCenter Converter is able to run on a wide variety of hardware and supports most commonly-used
versions of the Microsoft Windows and Linux operating systems. VMware Converter is also a powerful tool for
converting SAP systems. The following tasks can be performed with this migration tool:
Quick and reliable conversion of physical machines (locally or remotely) into virtual machines without any
disruption or downtime.
Performance of complete multiple conversions simultaneously with a centralized management console and an
intuitive conversion wizard.
Conversion of other virtual machine formats such as Microsoft Virtual PC and Microsoft Virtual Server or
backup images of physical machines such as Symantec Backup Exec System Recovery or Norton Ghost to
VMware virtual machines.
Restoration of VMware Consolidated Backup (VCB) images of virtual machines to run virtual machines.
Cloning and backup of physical machines to virtual machines as part of a disaster recovery plan.
Customer P2V SAP Migration Costs
All three reference customers planned their P2V projects together with a VMware partner who provides VMware
Certied Professionals and SAP Certied Consultants.
The VMware Converter exists in two versions: stand-alone or integrated in vCenter. The stand-alone VMware
Converter is available free of charge and can be used while the systems are running. When converting hosts with
SAP systems, conversion takes place while the systems are down.
The number of consulting days and the costs are listed in the following table.
Initial Consulting and Service Costs for P2V Migration
CUSTOMER
NUMBER OF SAP
SYSTEMS
CONSULTANT
DAYS*
COST**
Customer 1 5 10 $24,000
Customer 2 3 6 $14,400
Customer 3 6 6 $14,400
*Consultant Day = 8 hours
**Consultant Fee = $2,400.00 per day
Use Case Scenarios Before and After
Virtualization
In this chapter we describe some special SAP issues and procedures and explain how customers save costs with
VMware tools.
IT departments face two key challenges in change management: patch testing and testing upgrades for compatibility
with standard corporate hardware, operating systems, and application congurations. IT organizations traditionally
need to procure identical hardware and create testing environments that mirror the operating system and
application congurations of the production environment.
A typical and recommended SAP landscape consists of DEV, QAS and PRD systems.
Customers also host other SAP systems for training and testing purposes. With VMware infrastructure, SAP basis
teams are able to clone productive systems on the y and create a set of virtual machine libraries that mirror the
productive environment. They can then be used for provisioning the test environment. The latest patches and
upgrades can be tested on these virtual machines running SAP applications, eliminating the need to have
dedicated hardware to perform these tests. Patches can be rolled into production with minimal interruption to
end-users. In the event of problems, the virtual machines can be instantly rolled back using the VMware
snapshot features.
For the purposes of clarication, a short explanation of SAP products and business solutions follows.
SAP Solution Architecture
The SAP Business Suite is one of the worlds most comprehensive families of adaptive business applications,
providing best- of-breed functionality built for complete integration, industry-specic functionality, unlimited
scalability, and easy collaboration over the Internet. Individually, SAP Business Suite applications help customers
manage their most critical business processes. Collectively, they form a tightly-integrated suite that adds value
to every facet of a customers business, including its interactions with partners, suppliers and end-customers.
The core product from SAP is called SAP ERP. In addition to ERP software, other key SAP products and solutions
are available:
SAP NetWeaver Business Intelligence Suite (SAP BI)
Customer Relationship Management (SAP CRM)
Supply Chain Management (SAP SCM)
Supplier Relationship Management (SAP SRM)
Human Resource Management Systems (SAP HRMS)
Product Life Cycle Management (SAP PLM)
Process Integration (PI) (Message broking, Message workfows)
Enterprise Portal (EP)
SAP Knowledge Warehouse (KW)
The SAP Business Suite applications are based on the SAP NetWeaver platform, a technology and integration
platform. SAP NetWeaver enables rapid but controlled business process changes. Through its enterprise
services repository, the platform incorporates business functionality in the form of ready-to-use enterprise
services and process components. It also provides an integrated platform of composition technologies for
orchestrating business processes, composing applications and deploying innovative solutions. SAP NetWeaver
consists of an ABAP and/or J2EE Stack.
SAP enterprise applications can be deployed on a two- or three-tier architecture. In terms of software
deployment, the three-tier client-server architecture consists of a presentation layer, an application layer, and a
database layer. In terms of hardware deployment these three layers can run separately on diferent computers or
together on the same computer, depending on the requirements and size of the SAP solutions being deployed
by each customer. The presentation and application server layers can be distributed over multiple computers.
The three-tier architecture targets the support of large numbers of users. The two-tier architecture is usually
sufcient for many small and midsize companies, as well as for sandbox, development, training and test systems.
A complete SAP implementation may consist of hundreds of systems with diferent SAP applications running on
dedicated servers. Depending on the application and the time of monthly processing, many SAP environments
may have a low server utilization rate. Those with low utilization rates may be worthwhile targets for
virtualization with VMware virtualization technology.
Customer SAP Solution-Based Landscapes
In the following chapters we show, in detailed scenarios, what benets the customers obtained with the
virtualization of their SAP system landscapes. First we explain what the SAP landscape and systems included
prior to being virtualized; then we show the reduction of physical infrastructure after virtualization.
SAP Landscapes Before Virtualization
All customers in this study drive an SAP ERP installation with additional dialog instances. As a result, we focus
only on this kind of SAP solution-based landscape in this study.
Customer 1:
This customers company was founded as a family business in 1849 in Germany and has been a supplier to the
automotive industry since 1920. This company operates in the automotive sector, with more than 3,000
employees and more than 400 concurrent SAP users worldwide. This customer uses SAP ERP systems attached
to SAP Content Server systems (le based) for its CAD drawings.
The SAP R/3 Release 4.7 landscape consists of ve SAP systems: DEV, QAS, PRD, EDU, SOL.
DEV = SAP Development System
QAS = SAP Quality Assurance System
PRD = SAP Productive System
EDU = Education System
SOL = SAP Solution Manager
These SAP systems originally ran in a mainframe environment. After virtualization the systems were upgraded to
SAP Release ECC 6.0.
Due to internal SLA (Reliability, High Availability) requirements, two hosts run in parallel as a cluster. The hosts
run several SAP central instances with diferent port numbers. The SAP database les are located on a Fibre
Channel SAN environment from the same vendor.
This customer has its own dedicated SAP / VMware infrastructure. The VMware ESX host servers are used
exclusively for the SAP infrastructure.
Aggregated Annual Hardware, Storage, and Network Costs for One Mainframe Host
COSTS BEFORE VI RTUALIZATION NO. OF UNI TS TOTAL COST
SAP Hardware Mainframe (4-way, 64 GB RAM)* 1 $219,000
Operating System (4 CPUs)** 1 $24,700
Hardware Maintenance 1 $46,000
Software Maintenance 1 $21,000
SAP Network 4 Network Cards $767
SAP Storage (HBAs + Port) 2 $1,540
Console 1 $1,800
Total - $314,807
* The pre-virtualization hardware costs for this customer are based on a vendor quote of Q42007.
** Cluster is part of the operating system
The objective of this customer was to reduce the cost of hardware, hardware maintenance, and software maintenance.
Customer 2:
Customer 2 operates in the pharmaceutical sector. The company is located in Germany and has more than 2,300
employees. Its SAP PRD systems handles more than 200 concurrent SAP users on a UNIX cluster, all running on
the same cluster with diferent port numbers. The initial SAP release was 4.6C. Since then the SAP systems have
been upgraded to SAP ECC 6.0 within the virtualized infrastructure.
The DEV, QAS and PRD SAP systems for the commercial SAP modules were hosted on one Unix cluster with two
hosts. The SAP database les are located on a SAN box attached via Fibre Channel.
Aggregated Annual Hardware, Storage, and Network Costs for One UNIX Host
SAP Hardware Unix Cluster (4-way, 32 GB RAM)* 1 $88,500
Operating System (4 CPUs) 1 $3,050
Cluster Software $20,000
Hardware Maintenance 1 $8,000
Software Maintenance 1 $780
Total - $122,110
* The pre-virtualization hardware costs for this customer are based on the original purchase price rather than todays price, since this type of hardware is
not available anymore.
The objective of this customer was to reduce the costs for hardware, hardware maintenance, and cluster software.
Customer 3:
Customer 3 is a federal government institution for policy, research and practice in the eld of vocational education
and training. The SAP systems, based on release SAP ECC 6.0, originally ran on x86 hosts used by 100 SAP end users.
The SAP landscape consists of DEV, PRD and SAP Solution Manager together with SAP Enterprise Portal 7.0 for
using the SAP package Employee Self Service. The SAP Enterprise Portal landscape also includes DEV and PRD
systems. In addition, the customer works with an SAP BW landscape, with DEV and PRD, attached to the SAP
portal enterprise for BEX queries. Each SAP solution originally ran on a dedicated server.
Aggregated Annual Hardware, Storage and Network Costs for One x86 Host
SAP Hardware X86 (2-way, 8 GB RAM) 1 $7,500
Operating System 1 $1,000
Cluster Software 1 $2,000
Hardware Maintenance (24/7) 1 $1,100
Software Maintenance 1 $0
Total - $13,250
The customers objective was to reduce costs for the cluster software for productive SAP BW, SAP Enterprise
Portal, and SAP ERP. A further objective was saving external consultant know-how for other SAP projects.
SAP Landscapes After Virtualization
Customer 1:
Previously on two mainframes, the virtualized SAP systems were distributed to three VMware ESX hosts based
on x86 technology. The customer also virtualized some of the network services including domains, DNS, WINS,
DHCP, and so forth. (Analyses of these other virtualized services are not included in this documentation.) This
customer has its own dedicated SAP / VMware infrastructure that is, the VMware ESX hosts run the SAP
infrastructure exclusively.
Aggregated Annual Hardware, Storage, and Network Costs for One x86 VMware ESX
Host for Customer 1
COSTS AFTER VI RTUALIZATION NO. OF UNI TS TOTAL COST
ESX x86 Server (4 Socket) 1 $17,300
Operating System 1 $0
Cluster Software $0
VMware Enterprise Edition 2 $3,834
Total - $26,814
Customer 2:
Two UNIX clusters were replaced by two ESX host systems. The following diagram shows the distribution of the
SAP systems and the SAP instances to the VMware Infrastructure. The systems are distributed to diferent
systems in case of a failover.
Figure 3:SAPDistribution
Host for Customer 2
Cluster Software $0
Total - $13,697
Customer 3:
This customer also virtualized all running SAP systems to two ESX host servers, implemented in a VMware cluster.
Host for Customer 3
Cluster Software $0
Total - $13,697
Annual Hardware and Software Cost Savings
The following table summarizes the cost savings experienced by all three customers for SAP hardware and
software after virtualizing, as well as the savings resulting from replacement of the cluster environment with
VMware HA.
Annual Cost Savings for Customer Hardware and Software for SAP Solution Landscape
PHYSI CAL ARCHI TECTURE VMWARE ARCHI TECTURE
Hardware and
Software Costs
No. of
Servers
Cost No. of
Servers
Cost Savings Savings in %
Customer 1 2 $629,614 3 $80,442 $549,172 87
Customer 2 2 $244,220 2 $27,394 $216,826 89
Customer 3* 5 $66,250 2 $27,394 $38,856 59
* The x86 hardware was three years old.
The new hardware generation ofers more cores with better performance results. The new server models today
contain 10 times more memory capacity compared to the older models.
Annual A/C and Power Savings
The next table shows the power costs and savings for each customer.
Annual Power Costs and Savings*
No. of Servers Cost No. of Servers Cost Savings Savings in %
Customer 1** 2 $9,021 3 $8,462 $ 559 6
Customer 2*** 2 $5,641 2 $2,698 $2,943 52
Customer 3 5 $6,745 2 $2,698 $4,047 60
* Cost $0.28 KW/h
** Mainframes use more power than x86 systems
*** Diferent number of CPUs
Annual Cooling Costs for SAP Servers
To eliminate the heat produced by an SAP server, an investment of almost the same amount of energy is required.
Annual Cooling Costs and Savings for SAP Server and Mainframe*
No. of Servers Cost No. of Servers Cost Savings Savings in %
Customer 1** 2 $9,021 3 $8,462 $ 559 6
Customer 2*** 2 $5,641 2 $2,698 $2,943 52
Customer 3 5 $6,745 2 $2,698 $4,047 60
* Cost $0.28 KW/h
** Mainframes use more power than x86 systems
*** Diferent number of CPUs
Deploying an SAP Solution with VMware Templates
Once the decision to install an SAP ERP solution is made, the SAP landscape must be installed and deployed.
Typically, initial installation and deployment occurs only once. Upgrade and patch scenarios occur later on a
regular basis.
Sometimes, however, the SAP technologies make it necessary to install additional SAP solutions together with the
central SAP ERP system. SAP Business Warehouse (BI) and SAP Solution Manager are good examples. With SAP
BW, an SAP Enterprise Portal is helpful for creating new queries with the SAP Business Query Designer and
Explorer (SAP BEx). To obtain the latest SAP patch stacks from the SAP Service Marketplace on a regular basis, it is
mandatory to use the SAP Solution Manager with the feature Maintenance Optimizer (MOPZ). The SAP Solution
Manager is based on the SAP NetWeaver Platform and has the same technical platform as an SAP ERP system.
Cost of Deploying a Solution Before Virtualization
Typically, an installation of an SAP solution takes at least two days. The customers use diferent numbers of SAP
systems per SAP landscape.
Aggregated SAP Server, Administrative and Deployment Costs per Clustered SAP
Solution Landscape Before Virtualization
PHYSICAL PROVISIONING AND ADMINISTRATIVE COST FOR ONE SAP SOLUTION LANDSCAPE
Customer Provisioning Number No. of SAP CI Hours Total Hours Cost
Customer 1
Setup Host 2 3 6 $270
OS + DB 5 5 25 $1,125
SAP Software 5 16 80 $3,600
SAP Cluster 1 40 40 $1,800
Administrative
Costs
2 8 16 $720
Total $7,515
Customer 2
Server HW 2 3 6 $270
OS + DB 3 5 15 $675
SAP Cluster 1 40 40 $1,800
Administrative
Costs
2 8 16 $720
Total $5,625
PHYSICAL PROVISIONING AND ADMINISTRATIVE COST FOR ONE SAP SOLUTION LANDSCAPE
Customer 3
Server HW 5 3 15 $675
OS + DB 6 5 30 $1,350
SAP Cluster 3 40 120 $5,400
Administrative
Costs
5 8 40 $1,800
Total $13,545
Average hourly labor rate = $45
OS=Operating system DB=Database HW=Hardware

Customer 3 runs three SAP solutions: SAP ERP, SAP BW and SAP Portal. To save cluster nodes, the SAP DEV
systems also run as cluster nodes. The SAP BW solution ran as a single ABAP Java Stack Application together
with SAP Portal.
Aggregated SAP Server, Administrative and Deployment Costs for Clustered SAP
Solutions Before Virtualization
CUSTOMER
NUMBER OF SAP
LANDSCAPES
TOTAL COSTS FOR SAP
ANNUAL COSTS FOR ALL
SAP SYSTEM LANDSCAPES
(3 YEARS LIFETIME)
Customer 1 1 $7,515 $2,505
Customer 2 1 $5,625 $1,875
Customer 3 3 $13,545 $4,515
Cost of Deploying a Solution After Virtualization
With VMware virtualization technology, the time needed for setting up a complete SAP landscape can be
dramatically reduced with VMware templates. In a virtualized environment the initial installation time for the rst
SAP system in the SAP landscape remains the same as in the physical world. Once the rst system is set up, it
can become an SAP template, allowing downstream SAP systems to be deployed in half a day. Overall, an initial
three-system SAP landscape can be deployed and adjusted in three days.
Initial Aggregated SAP Server, Administrative and Deployment Costs with
VMware Infrastructure
PHYSI CAL PROVI SI ONI NG AND ADMI NI STRATI VE COSTS FOR ONE SAP SOLUTI ON LANDSCAPE
Customer 1
Set up Host 3 3 9 $405
OS + DB 5 2.5 12.5 $562.50
VMware 3 5 15 $675
Administrative
Costs
3 8 24 $1,080
Total $4,522.50
Customer 2
Server HW 2 3 6 $ 270
OS + DB 3 2.5 7.5 $337.50
SAP Software 3 8 24 $ 1,080
VMware 2 5 10 $ 450
Administrative
Costs
2 8 16 $ 720
Total $2,857.50
Customer 3
Server HW 2 3 6 $270
OS + DB 6 2.5 15 $675
VMware 2 5 10 $450
Administrative
Costs
2 8 16 $720
Total $4,275
Average hourly labor rate = $45
OS=Operating system DB=Database HW=Hardware VMware= Setup VI and conguration
SAP and OS * 0.5 VMware template technique
Initially Aggregated SAP Server, Administrative and Deployment Costs per High
Availability SAP Solution Landscape with VMware Infrastructure*
CUSTOMER
NUMBER
OF SAP
LANDSCAPES
BEFORE
VIRTUALIZATION
AFTER
VI RTUALI ZATI ON
SAVI NG I N %
Customer 1 1 $ 7,515 $4,522 40
Customer 2 1 $ 5,625 $2,857 49
Customer 3 3 $13,545 $4,275 68
*See SAP Deployment Provisioning Improvement
High Availability and Clustering
SAP systems are mission-critical for most companies, which means there is a need for a failover and switching
scenario. SAP systems have three critical Single Point of Failure (SPOF) components:
Database (Database Vendor)
Message service (SAP)
Enqueue service (SAP)
Besides redundant network interface adapters, switches, routers, DNS Servers, RAID Levels and Storage (NAS,
SAN), these components must be secured via a cluster solution.
SAP Database
An SAP application consists of one or more instances of an application server. Each instance can run on a
separate server, but it is also possible to operate multiple instances on one host. An SAP instance can provide
diferent service types. The standard SAP services, which can be congured on all instances of the SAP
component, are dialog, batch, update, and spool work processes. The failure of an SAP instance, on which these
standard services are congured, causes a termination and rollback of all transactions currently processed
within this instance. Database consistency is guaranteed at all times. Terminated transactions can be repeated
on one of the remaining instances.
If the SAP database is not available, all running work processes are still pending. In a cluster environment, the
DBMS fails over to another node, and the work processes have a built-in recurring polling mechanism and
reconnect themselves once the database is up and running again.
SAP Message and Enqueue Service
Apart from the standard services, there are two other services that exist only once. They are supplied by the
message service and the enqueue service and are potential single points of failure. The SAP instance running
both of these services is called the central instance (CI). In case of a stand-alone or enqueue replication service,
the enqueue service is operated separately from the other SAP services and independently of the other
application servers. Since the message server can also be operated separately from the other application
servers, both of these critical components can be restarted faster than a complete application server.
The enqueue service is a critical component of the SAP system. It administers locks using enqueue objects
within SAP transactions that can be requested by applications to ensure consistency within the SAP system.
Since the lock table is held in the main memory of the enqueue server, a server failure without additional
replication mechanisms results in a loss of locks held. To maintain consistency, all open transactions are rolled
back after the enqueue server is restarted.
The enqueue replication service enables the lock table to be replicated on a second server, the so-called replication
server. A copy of the lock table is maintained and permanently updated on this server. If the enqueue service
fails, a new enqueue service is started on the replication server using a failover solution (cluster, partner solution)
and this replication service creates a new lock table based on the copy of the lock table. This enables the enqueue
service, and therefore the whole SAP component, to continue operation almost without interruption. If the
enqueue service fails, transactions are no longer terminated, so that work can be continued transparently.
The solution is platform-independent. It can be used in the same way for both high-availability environments
and normal environments (that is, without the replication server).
SAP hardware partners provide the cluster technology for the enqueue server and its replication server, which is
required for the enqueue service to operate without interruption. To avoid the single point of failure with the
message server, this service must simply be restarted. It can be restarted automatically within a few milliseconds
using cluster technology.
HA and Clustering Before Virtualization
All customers in this study have secured their productive, physical SAP solution landscapes with the aid of
diferent cluster solutions ofered by diferent vendors.
The cluster license costs are included and aggregated in the hardware and software costs.
The initial SAP cluster installation costs are included in the SAP server and SAP software deployment costs.
All customers usually need approximately ve days to set up a two-node cluster. These values were
provided by the customers.
Customers report that in an SAP productive cluster environment they need about four additional hours per
cluster node for patching and testing a clustered SAP system. The SAP patch procedure in an SAP cluster is
described in detail in the SAP patch manuals.
Figure 4:EnqueueServer
New SAP patches are released at least twice a year.
Every patch scenario in an SAP cluster needs additional attention and mechanisms to implement SAP support
patches. Special database tools and procedures, virtual hostnames, additional IP addresses, redundant SAP
licenses, switching the nodes in a specic sequence, replacing executables manually, testing, etc. are only some
of the technical eforts involved. The following table shows the annual planned downtime, given the number of
available patches per year and clustered SAP central instances.
Annual Planned Downtime Costs for SAP Cluster Central Instances
NO. OF
SERVERS
NUMBER
OF SAP
CLUSTERED
CENTRAL
I NSTANCES
ADDI TI ONAL
DOWNTI ME
I N HOURS
DUE TO A
CLUSTER
DOWNTIME
FOR SAP PRD
HARDWARE
AND SOFTWARE
MAINTENANCE
IN HOURS
TOTAL
HOURS
PLANNED
DOWNTI ME
PER YEAR
COST
Customer 1 2 1 8 8 + 16 = 24 32 $3,840,000
Customer 2 2 1 8 8 + 16 = 24 32 $3,840,000
Customer 3 5 3 24 20 + (16 * 3) = 68 92 $11,040,000
Assumptions:
SAP ERP system $120,000 downtime per hour
Two SAP patch stacks per year
Four hours downtime per server per year
Eight hours downtime per SAP patch
HA and Clustering After Virtualization
VMware Infrastructure ofers a powerful high availability feature that allows SAP customers to completely
replace their SAP cluster implementation. In case of a VMware ESX host server failure, all the SAP virtual
machines restart on one of the available VMware ESX hosts. This behavior can be controlled by VMware cluster
settings and VMware Distributed Resource Scheduler (DRS). With the VMware HA feature no additional
activities are necessary for
SAP hostnames
SAP IP addresses
SAP database and tools
SAP message server
SAP enqueue server
SAP licenses
SAP cluster tests
HA also simplies SAP patch scenarios. The following table shows the planned downtime in an SAP cluster with
VMware High Availability.
Annual Planned Downtime for SAP Infrastructure with VMware HA
CUSTOMER
NO. OF
SERVERS
NO. OF SAP
CLUSTERED
CENTRAL
I NSTANCES
ADDI TI ONAL
DOWNTI ME
I N HOURS
DUE TO A
CLUSTER
DOWNTIME
TOTAL FOR SAP
PRD HARD- AND
SOFTWARE
MAINTENANCE
IN HOURS
TOTAL
HOURS
COST
Customer 1 3 1 0 0 + 16 = 16 16 $1,920,000
Customer 2 2 1 0 0 + 16 = 16 16 $1,920,000
Customer 3 2 3 0 0 + (16 * 3) = 48 48 $5,760,000
Assumptions:
Two SAP patch stacks per year
Four hours downtime per server per year
Eight hours downtime per SAP patch
Summary of SAP clustering and VMware high availability
VMware mechanisms such as VMotion and HA can reduce planned downtime for hardware and software
maintenance by up to 50 percent.
Comparison of Annual Planned Downtime and Costs*
CUSTOMER
BEFORE
VIRTUALIZATION
IN HOURS
AFTER
VIRTUALIZATION
IN HOURS
SAVING
IN HOURS
SAVING IN %
CONTRIBUTION
TO TCO
SAVINGS**
Customer 1 32 16 16 50 30% $576,000
Customer 2 32 16 16 50 30% $576,000
Customer 3 92 48 44 48 30% $1,584,000
*SAP ERP system $120,000 downtime per hour
**30% contribution to TCO, see above
SAP Front End Client Systems
SAP software has evolved from mainframe computing to three-tier architecture consisting of the database layer,
application (business logic) layer, and user interface layer. The advantage of having a client-server architecture is
the possibility of making changes or scaling one layer without having to retool the whole system.
The SAP product name R/3 stands for runtime system three and the client-server environment provides a set
of business applications for the system. The R/3 architecture allows distribution of the workload to multiple PCs
connected in a network. The SAP runtime system is designed in such a way that it distributes the presentation
layer, application logic, and the data management to diferent computers.
In our study the customers have between 100 and 400 SAP end users, most of them using Microsoft Windows-
based PCs. The front end application installed and used for SAP systems is called the SAP GUI, SAP logon(PAD).
Each PC usually needs to be replaced every three years. In the meantime, they require hands-on additions and
changes, operating system and application patches, upgrades, security, conguration and user management,
service activities, support and administration.
Client Systems Before Virtualization
According to a 2006 Gartner survey, a typical desktop in the SAP environment costs $488 per PC per year to
manage and support.
Annual TCO Comparison of PCs with Server-based Computing
PC TECHNI CAL SERVI CES CURRENT (AS I S) ANNUAL COST PER DESKTOP
User Adds and Changes $11
Hardware Conguration $26
Hardware Deployment $7
Software Deployment $121
Application Management $32
Backup, Recovery, Archiving $7
Service Desk $239
Security Management $30
IT Administration $15
Total per desktop per Year $488
Source: Gartner June 15, 2006
The costs over three years for a PC are $1,464.
Only Customer 3 with approximately 100 SAP end users deployed VMware Desktop Infrastructure (VDI) for the
SAP logon application.
Annual Costs for SAP PCs with VMware VDI
CUSTOMER NUMBER OF CONCURRENT SAP USERS ANNUAL COST FOR ALL PCS
Customer 1 400 $195,200
Customer 2 200 $ 97,600
Customer 3 100 $ 48,800
Capital Investment in VMware VDI
Pricing for VMware VDI is based on a list price of $150 per concurrent user and is packaged into two bundled
oferings: the VMware VDI Starter Edition and the VMware VDI Bundle 100 Pack. Both bundles include VMware
Infrastructure Enterprise Edition for VDI (which consists of VMware ESX 3.5 and VMware vCenter 2.5) and the
VMware Virtual Desktop Manager 2. The VMware VDI Starter Edition, which covers 10 virtual desktops, has a list
price of $1,500.00.
We calculated the cost of VDI based on the VMware Bundle 100 Pack for Customer 3. The VMware VDI Bundle
100 Pack includes 100 virtual desktops for the list price of $15,000. Customers may add additional licenses by
purchasing in increments of 10, based on the list price of $150 per concurrent user. The following tables show the
costs for the VDI Bundle 100 Pack as well as the costs for additional infrastructure hardware.
Software Investment in VMware VDI over Three Years
NUMBER COST
VMware VDI
Software
100 $15,000
Total $15,000
Source: VMware price information
Cost of Additional Hardware Required for VDI over Three Years
ADDI TI ONAL
COMPONENTS
DESCRI PTI ON NUMBER COST
ESX host servers 2 * Quad Core,32 GB RAM 1 $ 22,500
SAN 2 Ports per ESX 4 $4,400
10 GB per user Central Storage per User 100 *10 =1TB $6,000
Total $32,900
Client Systems After Virtualization
With VMware VDI, customers can avoid expenditures to refresh SAP front end desktop PCs. Pricing for VMware
VDI in our analysis is based on a list price of $150 per concurrent user. The following table shows that the
reduction in annual cost per client system with VMware VDI is US$274.00
Annual TCO Comparison of PCs with VMware VDI
PC TECHNI CAL
SERVI CES
REDUCTI ON WI TH VDI I N %
ANNUAL COST PER DESKTOP
IN WITH VMWARE VDI
User Adds and Changes 80 $2
Hardware Conguration 30 $18
Hardware Deployment 30 $5
Software Deployment 60 $49
Application Management 30 $22
Backup, Recovery,
Archiving
100 $0
Service Desk 60 $96
Security Management 50 $15
IT Administration 50 $7
Total per desktop per year $214
The following table shows the calculated three year cost savings for Customer 3 with 100 SAP front end users
before and after virtualization.
CUSTOMER
COSTS BEFORE
VIRTUALIZATION
COSTS AFTER
VIRTUALIZATION
SAVI NGS SAVI NG I N %
Customer 3 $146,400 $112,100 $34,300 23
SAP Upgrades and Patches
VMware snapshot technology is a very fast backup and recovery tool for existing SAP systems. This tool
provides the UNDO button for faulty and incomplete SAP upgrades and SAP patch scenarios.
VMware hot clone technology ofers a complete system cloning mechanism for pre-testing upgrades and SAP
patches, while the SAP system is still up and running.
From a technical point of view, the process for performing SAP upgrades and SAP patches are similar. Both
maintenance functions use the same SAP tools and transport mechanisms. These procedures manipulate
database dictionary information, executables, and customizing tables. To minimize downtime, both allow import
of new data and patches while end users are still working and processing transactional or master data.
The following diagram illustrates SAP procedure for importing inactive sources.
All three customers use this function to minimize downtime. But in case of an unsolvable error, a backup must be
applied to recover the system to the starting point. In this case, user data created in the uptime phase can be lost.
At the start of an SAP patch or upgrade installation, an online backup of the database is performed, which is
only consistent in combination with the database transaction logs. A 500 GB database takes approximately ve
hours for such a disk backup. In many enterprises a specic department is responsible for backup and recovery
practices involved in SAP patches and upgrade scenarios.
Source:SAP
Upgrades and Patches Before Virtualization
An SAP upgrade typically occurs only once in three years. In a traditional SAP upgrade scenario, rst the SAP
DEV system, then the SAP QAS and nally the SAP PRD are upgraded. The following table shows a time
calculation for an SAP upgrade in a productive physical SAP environment with a 500 GB database before the
environment was virtualized. The partner company that was responsible for this SAP upgrade provided the
report on the number of days required.
SAP upgrade scenarios
CUSTOMER
NO. OF SYSTEMS I N
AN SAP LANDSCAPE
NO. OF SAP
LANDSCAPES
DAYS I N TOTAL
Customer 1 5 1 17
Customer 2 3 1 11
Customer 3 2 3 24
SAP DEV 5 days First system More days for preparation and troubleshooting
SAP QAS 3 days Experienced SAP upgrade
SAP PRD 3 days Experienced SAP upgrade
SAP Other 3 days Experienced SAP upgrade
One customer had a problem with the upgraded SAP DEV system, because several items of data necessary for
testing the new SAP release were missing. Typically, before an SAP upgrade, customers perform a classical SAP
system copy from SAP PRD to SAP DEV. The time required for this process is not accounted for in the table above.
Upgrades and Patches After Virtualization
The customers were able to use a new upgrade strategy in the virtualized environment with VMware cloning and
snapshot technology. During the process, running SAP production systems were cloned into an empty virtual
machine. The upgrade was tested in this new virtual machine and any errors were analyzed. After successfully
upgrading the system, the customizer and developer made the new SAP release adjustments in the non-critical
virtual machine, recording the changes into SAP change requests. This can be done over a longer time period
without time pressure.
Once the system had met all customer requirements, the productive system was upgraded. Afterwards all
recorded SAP change requests were applied. Then, instead of making SAP system copies, the data of the
productive SAP system was exported and imported to the test systems.
There are three advantages to using this scenario:
Time and cost savings
Consistent SAP system landscape
No time limitations for developer and customizer
The following table shows the time usage for this new upgrade procedure for a three-system SAP landscape.
New SAP Upgrade Procedure with VMware Technology
CUSTOMER 1
PROJECT SEQUENCE
SAP SYSTEM
PROCEDURE
VMWARE / SAP
DAYS
Step 1 PRD HOT Clone PRD2 1
Step 2 PRD 2 SAP Upgrade 5
CUSTOMER 1
PROJECT SEQUENCE
SAP SYSTEM
PROCEDURE
VMWARE / SAP
DAYS
Step 3 PRD 2 Development /
Customizing
Varies; not time- critical;
parallel to PRD
Step 4 PRD SAP Upgrade 3
Step 5 QAS SAP Export/Import 1
Step 6 DEV SAP Import* 1
Step 7 EDU SAP Import* 1
Step 8 TST SAP Import* 1
Total Days 13
* Export not necessary anymore
We gathered the following data before and after virtualization for one of the customer projects.
Initial Cost and Time Savings in SAP Upgrade Projects
SAP
UPGRADE
SAP SYSTEMS
FOR UPGRADE
DAYS BEFORE
VIRTUALIZATION
DAYS AFTER
VIRTUALIZATION
SAVING IN
DAYS
SAVINGS*
SAVINGS
IN %
Customer 1 5 17 13 4 $9,600 24
TCO Reduction: Three Case Studies
This chapter provides detailed information about the TCO savings and ROI achieved by three customers using
VMware Infrastructure combined with powerful multi-core x86 hardware to virtualize their SAP systems.
The calculation in the following tables shows costs both with and without SAP planned downtime reductions
that were achieved by replacing clusters with VMware HA and reducing planned downtime for hardware
maintenance with VMware VMotion. Many customers argue that planned downtime is free of charge as it is
reserved in the SLAs as a maintenance task. Nevertheless, productive time can be gained back by reducing
planned downtime. A company with worldwide production facilities can do business during this time that would
have been lost before virtualization was in place.
TCO and ROI Summary for Customer 1
As shown in the following tables, Customer 1 achieved an 81 percent reduction in overall total cost of ownership
over three years, and the return on investment period for the virtualization project was three months.
Customer 1 Three-Year TCO
WI THOUT VMWARE
I NFRASTRUCTURE
WI TH VMWARE
I NFRASTRUCTURE
SAVI NGS
Direct Costs
Investment Virtualization Check $ - $7,000 $(7,000)
Investment SAP P2V $ - $24,000 $(24,000)
Investment Training $ - $13,500 $(13,500)
Investment Hardware
- Includes Hardware
Maintenance
- Includes Network Costs
- Includes OS, Cluster
- Includes VMware Licenses
- Includes HBAs $1,888,842 $241,326 $1,647,516
SAP Deployment $7,515 $4,523 $2,992
SAP Upgrade $40,800 $31,200 $ 9,600
Total Direct Costs $1,937,157 $321,549 $1,615,608
Indirect Costs
Power Costs $27,063 $25,386 $1,677
Cooling Costs $27,063 $25,386 $1,677
SAP Frontends VDI $ - $ - $ -
SAP Planned Downtime $ - $ - $ -
Total Indirect Costs $54,126 $50,772 $3,354
Total Cost of Ownership $1,991,283 $372,321 $1,618,962
Customer 1 Return On Investment
YEAR 1 YEAR 2 YEAR 3
Investments
Investment Virtualization Check $7,000 $ $
Investment SAP P2V $24,000 $ $
Investment Training $13,500 $ $
Investment Hardware
- Includes Hardware Maintenance
- VMware Licenses
- Includes HBAs $235,726 $2,800* $2,800*
Total Investments $ 280,226 $ 2,800 $ 2,800
Savings
Server Hardware $1,647,516 $ $
SAP Deployment $2,992
SAP Upgrade $9,600
Power Cost $559 $559 $559
Cooling Cost $559 $559 $559
SAP Frontend VDI $
Total Savings $1,661,226 $1,118 $1,118
Total Cumulative Investments $280,226 $283,026 $285,826
Total Cumulative Savings $1,661,226 $1,662,334 $1,663,462
Total Return on Investment 593% 587% 582%
ROI Time Frame (in months) 3
*VMware software maintenance (25 percent Platinum) cost per year
TCO and ROI Summary for Customer 2
As shown in the following tables, Customer 2 achieved an 83 percent reduction in overall total cost of ownership
over three years, and the return on investment period for the virtualization project was two months.
Customer 2 Three-Year TCO
WI THOUT VMWARE
I NFRASTRUCTURE
WI TH VMWARE
I NFRASTRUCTURE
SAVI NGS
Direct Costs
Investment Hardware
- Includes Hardware
Maintenance
- Includes HBAs $732,660 $82,182 $650,478
SAP Deployment $5,625 $2,858 $2,767
SAP Upgrade $ - $ - $ -
Total Direct Costs $738,285 $115,440 $622,845
Indirect Costs
Power Costs $16,923 $8,094 $8,829
Cooling Costs $16,923 $8,094 $8,829
SAP Frontends $ - $ - $ -
Total Indirect Costs $33,846 $16,188 $ 17,658
Total Cost of Ownership $772,131 $131,628 $640,503
Customer 2 Return On Investment
Investments
Investment Hardware
- VMware Licenses
- Includes HBAs $79,382 $1,400* $1,400*
Total Investments $109,782 $1,400 $1,400
Savings
Server Hardware $732,660 $ $
SAP Upgrade $
Power Cost $2,943 $2,943 $2,943
Cooling Cost $2,943 $2,943 $2,943
SAP Frontend VDI $
Total Savings $741,313 $5,886 $5,886
Total Cumulative Savings $741,313 $747,199 $753,085
* VMware software maintenance (25 percent Platinum) cost per year
TCO and ROI Summary for Customer 3 without VMware VDI
As shown in the following tables, Customer 3 achieved a 49 percent reduction in overall total cost of ownership
over three years for its SAP data center, and the return on investment period for the virtualization project was six
months. These gures do not include the customers desktop virtualization project TCO and ROI.
Customer 3 Three-Year TCO Without VDI
WI THOUT VMWARE
I NFRASTRUCTURE
WI TH VMWARE
I NFRASTRUCTURE
SAVI NGS
Direct Costs
Investment Hardware
- Includes Hardware
Maintenance
- Includes HBA $198,750 $82,182 $116,568
SAP Deployment $13,545 $4,276 $9,269
Total Direct Costs $212.295 $112.358 $99.937
Indirect Costs
Power Costs $20,235 $8,094 $12,141
Cooling Costs $20,235 $8,094 $12,141
Customer 3 Return On Investment Without VDI
Investments
Investment Hardware
- VMware Licenses
- Includes HBAs $79,382 $1,400* $1,400*
Savings
SAP Upgrade $
Power Cost $4,047 $4,047 $4,047
Cooling Cost $4,047 $4,047 $4,047
SAP Frontend VDI $ - $ - $ -
SAP Planned Downtime $ - $ -
Total Savings $220,389 $8,094 $8,094
TCO and ROI Summary for Customer 3 with VMware VDI
As shown in the following tables, Customer 3 achieved a 40 percent reduction in overall total cost of ownership
over three years for its SAP front end client deployment with VMware VDI, and the return on investment period
for this part of the virtualization project was six months.
Customer 3Three-Year Total Cost of Ownership with VDI
WITHOUT VMWARE VDI WI TH VMWARE VDI SAVI NGS
Direct Costs
Investment Virtualization Check $ - $7,000 $(7000)
Investment Hardware
- Includes Hardware
Maintenance
- Includes HBA $198,750 $82,182 $116,568
SAP Deployment $13,545 $4,276 $9,269
Indirect Costs
Power Costs $20,235 $8,094 $12,141
Cooling Costs $20,235 $8,094 $12,141
SAP Frontends $146,400 $112,100 $34,300
Customer 3 Return On Investment With VDI
Investments
Investment Hardware
- VMware Licenses
- Includes HBAs $79,382 $1,400** $1,400*
Savings
SAP Upgrade $
Power Cost $4,047 $4,047 $4,047
Cooling Cost $4,047 $4,047 $4,047
SAP Frontend VDI $11,433 $11,433 $11,433
SAP Planned Downtime $
Total Savings $231,822 $19,527 $19,527
Customer 1 TCO /ROI Summary with Planned Downtime Costs
As shown in the following tables, when costs of planned downtime are included in the analysis Customer 1
achieved a 61 percent reduction in overall total cost of ownership over three years, and the return on investment
period was two months.
Customer 1 Three-Year Total Cost of Ownership
WI THOUT VMWARE
I NFRASTRUCTURE
WI TH VMWARE
I NFRASTRUCTURE
SAVI NGS
Direct Costs
Investment Hardware
- Includes Hardware
Maintenance
- Includes HBA $1,888,842 $241,326 $1,647,516
SAP Deployment $7,515 $4,523 $2,992
SAP Upgrade $40,800 $31,200 $9,600
Total Direct Costs $1,937,157 $321,549 $1,615,608
Indirect Costs
Power Costs $27,063 $25,386 $1,677
Cooling Costs $27,063 $25,386 $1,677
SAP Planned Downtime $3,456,000 $1,728,000 $1,728,000
Total Indirect Costs $3,510,126 $1,778,772 $1,731,354
Total Cost of Ownership $5,447,283 $2,100,321 $3,346,962
Customer 1 Return on Investment Including Costs of Planned Downtime
Investments
Investment Hardware
- VMware Licenses
- Includes HBAs $235,726 $2,800* $2,800*
Savings
Server Hardware $1,647,516 $ $
SAP Upgrade $9,600
Power Cost $559 $559 $559
Cooling Cost $559 $559 $559
SAP Frontend VDI $
SAP Planned Downtime $576,000 $576,000 $576,000
Total Savings $2,237,226 $577,118 $577,118
period was two months.
WI THOUT VMWARE
I NFRASTRUCTURE
WI TH VMWARE
I NFRASTRUCTURE
SAVI NGS
Direct Costs
Investment Hardware
- Includes Hardware
Maintenance
- Includes HBA $732,660 $82,182 $650,478
SAP Deployment $5,625 $2,858 $2,767
Indirect Costs
Power Costs $16,923 $8,094 $8,829
Cooling Costs $16,923 $8,094 $8,829
Customer 2 Return On Investment including Costs of Planned Downtime
Investments
Investment Hardware
- VMware Licenses
- Includes HBAs $79,382 $1,400* $1,400*
Savings
SAP Upgrade $
Power Cost $2,943 $2,943 $2,943
Cooling Cost $ 2,943 $2,943 $2,943
SAP Frontend VDI $
SAP Planned Downtime $576,000 $576,000 $576,000
Total Savings $1,317,313 $581,886 $581,886
Total Cumulative Savings $1,317,313 $1,899, 199 $2,481,085
period was one month.
WI THOUT VMWARE
I NFRASTRUCTURE
WI TH VMWARE
I NFRASTRUCTURE
SAVI NGS
Direct Costs
Investment Hardware
- Includes Hardware
Maintenance
- Includes HBA $198,750 $82,182 $116,568
SAP Deployment $13,545 $4,276 $9,269
Indirect Costs
Power Costs $20,235 $8,094 $12,141
Cooling Costs $20,235 $8,094 $12,141
SAP Frontends $ $ $
Customer 3 Return On Investment including Costs of Planned Downtime
Investments
Investment Hardware
- VMware Licenses
- Includes HBAs $79,382 $1,400* $1,400*
Savings
SAP Upgrade $
Power Cost $4,047 $ 4,047 $4,047
Cooling Cost $4,047 $4,047 $4,047
SAP Frontend VDI $ - $ - $ -
Total Savings $1,804,389 $1,592,094 $1,592,094
Customer 3 TCO /ROI Summary with Planned Downtime Costs and VMware VDI
As shown in the following tables, when VMware VDI and costs of planned downtime are included in the analysis
Customer 3 achieved a 48 percent reduction in overall total cost of ownership over three years, and the return
on investment period was one month.
WITHOUT VMWARE VDI WI TH VMWARE VDI SAVI NGS
Direct Costs
Investment Hardware
- Includes Hardware
Maintenance
- Includes HBA $198,750 $82,182 $116,568
SAP Deployment $13,545 $4,276 $9,269
Indirect Costs
Power Costs $20,235 $8,094 $12,141
Cooling Costs $20,235 $8,094 $12,141
SAP Frontends $146,400 $112,100 $34,300
Customer 3 Return On Investment including Costs of Planned Downtime and VMware VDI
Investments
Investment Hardware
- VMware Licenses
- Includes HBAs $79,382 $1,400* $1,400*
Savings
SAP Upgrade $
Power Cost $4,047 $4,047 $4,047
Cooling Cost $4,047 $4,047 $4,047
SAP Frontend VDI $11,433 $11,433 $11,433
Total Savings $1,815,822 $1,603,527 $ 1,603,527
Total Return on Investment 1725% 3205 % 4647%
Virtualizing Large Enterprise Applications with
VMware vSphere
VMware began delivering the next generation of VMware Infrastructure, renamed VMware vSphere 4, in
May 2009. VMware vSphere 4 delivers a number of technical enhancements including:
More virtual processors per virtual machine (from 4 to 8)
More virtual NICs per virtual machine (from 4 to 10)
More memory per virtual machine (from 64 GB to 255GB)
A 3x increase in network throughput (from 9 Gb/s to 30Gb/s)
A 3x increase in the maximum recorded I/O operations per second (to over 300,000)
A new maximum recorded number of transactions per second - 8,900.
Distributed power management, which automatically assesses server bandwidth requirements of applications
at various times of day. During of-peak hours, DPM consolidates virtual machines on fewer servers and powers
down unnecessary hardware.
Thin provisioning with VMware vStorage provides dynamic storage allocation that increases automatically
when needed.
A new Fault Tolerant feature for single-processor virtual machines
This new version opens the way for customers with large SAP implementations, such as the ones described in
this study, to pursue virtualization and its TCO benets with full condence that their SAP solutions will meet or
even exceed performance SLAs.
VMware, Inc.3401HillviewAvenuePaloAltoCA94304USATel877-486-9273Fax650-427-5001www.vmware.com
Copyright2010VMware,Inc.Allrightsreserved.ThisproductisprotectedbyU.S.andinternationalcopyrightandintellectualpropertylaws.VMwareproductsarecoveredbyoneormorepatentslisted
athttp://www.vmware.com/go/patents.VMwareisaregisteredtrademarkortrademarkofVMware,Inc.intheUnitedStatesand/orotherjurisdictions.Allothermarksandnamesmentionedhereinmaybe
trademarksoftheirrespectivecompanies.ItemNo:VMW_10Q3_WP_SAP_CUSTOMER_TCO_USLET_EN_R1

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