SAP HANA in the Cloud? "No way" or "what cloud"?

Being "Cloud" one of today’s buzz words, that is also shaking-up the SAP world alongside HANA, I’ve come across many customer with a strong “antagonism” to any topic with “cloud” on the title.

I see as a root cause to this antagonism, the huge confusion created by all the players that want to be in this market, whom call “cloud” to everything that moves in their portfolio in their struggle to be relevant.

So, when talking with CIOs, Enterprise Architects and other IT leaders, I see still lots of misunderstanding in relation to “all things Cloud for SAP”.

In this blog, I’ll make a brief definition of my understanding of “Cloud”, to then use this definition to do a high level discussion on “what is the right cloud model for each company and business scenario”.

Note that you’ll see that my discussion is generic from a pure cloud perspective, and not very “HANA” specific. The point here is that, all I’ll be discussing in this blog post, can be part of a datacenter wide strategy discussion on which SAP HANA today definitely fit in as well.

SAP HANA is becoming increasingly normal, and so you should consider it as an integral part to your cloud strategy.

I know there are certain limitations in regards to “very huge” HANA systems. But when talking with customers with 70 and more productive systems with full landscapes of more than 300 SIDs, and many multi-terabyte databases, the ones that require special attention are usually less than 10%. So, you can set a rule for the other 90+ %, and then deal with the exceptions.

Let me tell you as well, that I’ve seen companies looking at those huge SAP HANA systems first and using them to define the standard, and it has led to massive costs that could have been avoided. But talking on the benefits of standardization of IT would be another conversation I’ll leave to another occasion!

           What is "Cloud"? 

So, let’s get to it and start putting some names on the “things”.

In fact, Cloud is a buzz word subject to many miss understandings today, and due to that may not be “the first option” many organizations around the world would think of.

Although the “Cloud” buzz word is relatively new, the concept has been around for many years, and it’s all about industrialization of IT.

Looking beyond the noise and the smoke, indeed Cloud not being new, it is indeed real today.

I remember presenting at conferences for another company many years ago about “industrialization of IT” where I knew that what I had was a reference architecture, and that everything would have to be custom built through massive consulting projects. This is no longer the case today.

And industrialization of IT is real because today we have the technologies that indeed enable to manage IT as a Service at its multiple levels.

Hardware has evolved to be able to be managed and configured by software, and most components in the IT stack provide scripting interfaces that enables “automation tools” to manage them.

This discussion has been becoming increasingly confusing for customers because each provider organization abuses the “cloud” word to positon themselves as relevant despite their disparate maturity, standardization, automation, geographic coverage and competitive positioning.

Among the miss understandings of “cloud” there are 2 I consider fundamental to overcome:

• That once a workload is virtualized, it is already in some sort of cloud;
• And the idea that cloud is only “public cloud”. 

           Just Virtualizing Systems is not Cloud !!!

Let me then start setting some foundations by making a reference to the U.S. National Institute for Standards and Technology (N.I.S.T.). This organization came up with a definition of cloud, to which all players in the market can refer to, so enabling cloud customers to have a framework through which evaluate their candidate providers in terms of completeness of offerings.

This standard has been widely accepted by the key players in the “cloud business”, and can be found at: http://csrc.nist.gov/publications/nistpubs/800-145/SP800-145.pdf

If you read through the N.I.S.T. definition of cloud computing, it clearly identifies what are the essential characteristics needed to be in place, so that you can call something “cloud”:

• On-demand self-service;
• Broad network access;
• Resource pooling;
• Rapid elasticity;
• Measured service.

You can read more about them both on the N.I.S.T. documentation and on other documents available in the internet.

From these characteristics you can evaluate that they imply a more comprehensive scenario than just virtualizing applications. Virtualization can indeed be a key enabler of cloud as it enables for example “rapid elasticity” and “resource pooling”, but to be in face of a cloud, you’ll also need a significant level of automation.

Indeed, automation is a key component to any real cloud. If you look at it, Information Technologies came with the promise of automating the business processes of organizations, but the management of the IT systems has been quite manual. In fact, for most organizations around the world (end customers and service providers alike), the cost of labor is one of the biggest items in IT operating expenses.

So, "Cloud" is all about bringing to IT what IT brought to business processes many years ago: minimize the human intervention in regular IT operations. The benefits from this reduction of human intervention has been realized for many years in the manufacturing industries, having demonstrated to reduce defects, improve response times, reduce operating costs and simplifying change.

These levels of automation are implicit in characteristics like “on-demand self-service”, where it is assumed that there will be no manual work behind a “self-service portal”, as it would be fully orchestrated and automated through workflows.

For me a “cloud” that is hosted at a service provider, but that behind the “portal” has a lot of manual work, and because of that has expensive costs and low response times, is not a cloud. Although many service providers around the world advertise cloud offerings for SAP HANA that indeed in the background operate in this way. They will always fall short on the expectations created by the “true cloud players”.

Another key characteristic of cloud is to have a “measured service”, as this is a key characteristic to enable your organization to run IT as a Service, and become an IT services broker to your business organizations.

This would for example enable to, when a business user comes to you asking for a system to start a new project, to check your “private cloud” and “public cloud” costs, security, service levels and response times, and give an the best option to the business user based on the business scenario he will be implementing. Here is where I believe IT really becomes a partner to business organizations in driving innovation and further organizational agility.

I believe we can agree at this stage that “virtualization” and “cloud” are not synonyms. Virtualization is definitely a key ingredient to build efficient clouds, but is not “cloud” just by itself.

           Cloud is not only “Public” Cloud – look for Private and Hybrid as well.

The clarification for the second myth we’ve referred above comes from the N.I.S.T. definition of Cloud Computing as well.

In that document there are also described the “Cloud Service and Delivery Models”.

In terms of service models, N.I.S.T. defines the following:

• Software as a Service
• Platform as a Service
• Infrastructure as a Service

And in terms of delivery models, the following are defined:

• Private cloud;
• Community Cloud;
• Public Cloud;
• Hybrid Cloud.

Again, not being my goal to dive deep on the NIST definition (as you can read all about it online), the point here is that private IT organizations can work in a “cloud operating model”, delivering a Private Cloud to their business organizations with similar characteristics to public cloud offerings.

To do this, what private organizations need is access to the infrastructure components, tools and know how on the processes used by leading public cloud providers. And this is available today!

I’m pleased to have gotten to know some IT organizations that “got their act together” and stepped it up to be competitive in terms of agility and quality of service with public cloud providers! In the end it’s all about the people.

But there is another choice coming strong to market, that might bring together the best of two worlds: what if the “public cloud provider” offered his services to manage a private cloud hosted on your premises (under your full span of control) in the same way it manages his public cloud?

This is what I call the “managed private cloud”.

The point here: cloud is not only public cloud. It’s all about a service model around automation of IT.

I believe then, that we can agree that accepting this definition, “cloud” must indeed be part of every IT organization’s strategy discussions.

           Should I go IaaS, PaaS or SaaS? Soo many “aaS” is so confusing...

Now, looking at the NIST defined service models, what is the right one for each of your business processes / application stacks / organizations?

Let me share what I’ve learned on this topic from working in IT operations myself, and participating in many interesting discussions with the leaders of those IT organizations.

Many organizations look to differentiate themselves through the usage of information. This makes it that an increasing number of organizations see “code development” capabilities increasingly as a core competence as it provides them the capability to manage and analyze information. In the information age, being able to rapidly turn information into actionable insights to the business is a key competitive differentiator.

On the same side, there are also organizations that struggle to get the skills they need at this level, and see themselves many times hostages of “under-performing” IT teams. This has led in many cases to top management decisions to embark on “comprehensive outsourcing deals”, which we’ve seen as very popular through the late 90’s and early 2000’s, as they expected the outsourcer to solve the problems they haven’t been able to solve themselves.

History has shown that most of these comprehensive outsourcing deals apart from the short term financial impact of turning CAPEX into OPEX and providing a cash injection, have come short on most operational, innovation and strategic expectations.

So, externalization of IT functions, being through Outsourcing or Cloud, has been a tool in the hands of CEOs, CFOs, CIOs and in general C-level executives as a way to solve many different problems (strategic, financial, etc), including IT skills and processes problems.

I have worked both on architecting solutions for these “old large outsourcing contracts” as well on the delivery of those contracts, and I have a ton of stories to tell on my learnings from it.

But the point is that these problems haven’t gone away, and still exist in many organizations.

So choosing between SaaS, PaaS and IaaS may also align to where the problem lies in the customer’s IT organization.

I would say that a decision to adopt IaaS, PaaS or SaaS should be based fundamentally on the business scenario to be supported. But I have to acknowledge that on the board room, this is not the only discussion argument.

This is why I say that SaaS may be a way to solve your problems when functional and development teams do not deliver. By going SaaS you externalize all of that to the provider. Of course this should be balanced with an analysis of the application, as going to a SaaS model would be a good fit if the application has mainly standard requirements across the company’s industry.

As for PaaS, apart from providing pervasive access to a development platform, it might be looked as well as a way to cover poor capabilities of DB and OS admin teams, as that would be in the responsibility of the provider.

Remember, these are just examples of discussions I’ve observed, and I believe it is important to put the SaaS/PaaS/IaaS options in perspective.

Associate this previous aspect with the fact that in many parts of the world there are severe technical and regulatory limitations to a public cloud model, and the scenario of implementing a IaaS private or hybrid cloud model is in fact the most accepted one for business critical applications. I see this today, and foresee it will stay like this for the coming years.

           What is the right cloud delivery model for my Business Critical applications?

So what kind of a cloud will you’ll be putting each of your workloads on?

Will everything be public?

It depends on the specifics of each customer / country and use-case, and the following metrics should provide you a good guidance on how to decide: Economics; Trust; Functional.

For example:

• Where is more economic to run this workload? On the public cloud or on my private cloud?
• As internal IT usually does not have a profitability goal, the end cost for the company may be lower running it on-premise. But on the other side, in many occasions private IT organizations do not have either the scale or the most efficient operating model, making it then more costly in the long run. Not all companies are alike, so the result of this evaluation is absolutely unique to each customer scenario.
• What confidentiality and compliance requirements are applicable to this business process/application? It is subject to data sovereignty regulations, or other risk related regulations like "Sarbanes/Oxley" or "Basel"?
• Not all countries have the same regulation, and each organization manages business in a different and unique way. There may be scenarios that either industry, country or corporate regulations impose certain restrictions on "data placement". Also the risk profile of each company defines their approach to risk, and their evaluation on probability, impact and acceptable risk containment/management practices.
• Does the public could provider provide functionality that maps to the unique needs of the organization?
• There are business processes in organizations that are quite standard in the industry, leading to look at application adoption as a way to have access to standard and updated industry best practices. There are as well situations where the business processes and functional requirements are very unique or custom to the organization, being even a unique source of competitive differentiation, situation in which most likely a standardized public cloud offering may not be a good fit.

Again, this is just an example of a reflection, and if you look at this, you can realize that most likely you'll find workloads suitable to public cloud offerings, and other that will be subject to more restrictive conditions.

Apart from this, we have to remember as well that not all the world has today cheap and stable high bandwidth connectivity, and that the increased news on data privacy violations and questionable access by public entities to private data, makes it that many organizations see themselves in the cross-roads of making careful decisions of what should be placed under the organization’s direct span of control (the private cloud), and what is acceptable to be put in a fully public environment.

Let me share one example provided by one customer I met some weeks ago on his reasoning of what we could place on one side or on the other.

This customer gave as an example 2 particular systems:

• one to support employee performance evaluation, career planning and skills development;
• and another system for “order to cash processes” like invoicing and accounts receivable.

If they lose access to the employee evaluation system, the company will not stop operating. Also, the kind of data included in such a system does not contain critical data in terms of the company secrets, which makes that having a reliable public cloud offering it might be the right solution for such a system.

On the other way, for the invoicing and accounts receivable system, if access to such a system might be lost, the business operations would be paralyzed and cash inflows might be negatively impacted. 

Also if in such information there is business critical data, like the markets an organization is operating, its revenues by market, its customers, its planned promotions and new product launches, etc… This is definitely the kind of system that it will be most difficult for an organization to accept being operated outside its span of control, or without access to its own auditing services.

If we remember as well, that apart from the US, Western Europe and certain specific countries in Asia, the majority of the world still has both technical and legal constraints around public cloud, I believe on-premise (or a hosted / managed private environments) will still be the mainstream option for the core business systems of organizations for quite some years to come.

So, we will have cases where a pure public cloud offering where you have no control over the software stack or the data placement location will be an acceptable choice, and also cases on the other extreme where you'll need to keep full control of the software stack and data location. But between these two extremes, there are a multitude of possibilities, like leveraging a local provider providing you an hybrid model like: having the data placed in the local provider within the country's borders, in association with a global provider providing the cloud services on top of that infrastructure, either in a dedicated or in a shared environment.

The point: today there are multiple options, so embrace the discussion and find out what are the best options for your organization from a financial, strategic, innovation and operational perspectives.

           IaaS is the Cloud Service Model that Provides you the most flexibility

Assuming that through your “cloud workload filter” you define what services are acceptable to run on a public cloud and which are not, you’ll end up with the conclusion that you’ll be operating a Hybrid Cloud Model, with certain services running under your span of control (either hosted by your own IT or managed in a hosted managed private environment at a Service Provider).

How do you ensure you do not end up locked-in to a certain vendor, and that you don’t lose the flexibility an hybrid cloud model should be providing you in the first place?

The response would be: adopt a cloud service model that enables you to have control over the “mobility” of your workloads between public clouds, or between public and private clouds.

Today, only Infrastructure as a Service (IaaS) offers this.

Let’s look at it for an instant:

• SaaS: the application logic will be property of the service provider, and if your organization wants to move that process back to its span of control, it will imply a major migration project as it will be needed to configure a new application to support that functionality alongside a migration of the data from the public provider to your controlled environment. This will definitely be time and resource consuming, representing a disruptive change. So we can say, that once you make a choice to adopt a SaaS offering in a Public Cloud, there will be a number of barriers to exit, that must be evaluated beforehand and included in your contract “exit clauses”.
• PaaS: the provider owns up to the run-time platform where you deploy your code. Means that most likely, your data will also be hosted on the provider infrastructure. Here moving these processes from public to private cloud becomes simpler, whenever the platform you’ve chosen to run your code on can be easily deployed on-premise as well. But also in this case, moving functionality from public to private will be a disruptive event which will imply certain costs and application downtime.

Both in SaaS and PaaS, when talking about hybrid cloud scenarios, we are thinking about the possibility of business processes or applications interact and expand between private and public cloud. But in neither of these cases we can talk about “dynamic workload mobility”. At least with the current (that I know of, and foreseen for the medium term) public cloud offerings and technologies, there is NO dynamic / real-time workload mobility.

But this is a reality today in the IaaS model.

When considering Infrastructure as a Service, apart from having complete isolation at the data level with today’s Virtualization Technologies like the ones provided by VMware, the whole stack needed to run your business processes is packed in a container that is the Virtual Machine, that you can absolutely control form a confidentiality point of view and move around between compatible clouds.

But the key benefit here is that if you choose public cloud providers who operate on VMware, having VMware as well as an enabling technology for your private cloud in a IaaS model, you can today use technologies like “long distance vMotion” (check out the announcements on this topic from VMworld US 2015) to dynamically and without disruption move applications from the private to the public cloud and back, avoiding being locked-in to a specific vendor.

There are also storage provider technologies that facilitate the movement and copy of virtual machines between clouds that are in use by many service providers around the world and that can be used in combination with “long distance vMotion”. But to my current knowledge, the scenarios I know are in production still imply a minimal application downtime to do this workload mobility, as “long distance vMotion” is a brand new feature that will still take some time to become widely implemented and integrated with key hardware infrastructure components.

So, from a risk perspective, IaaS is the only model that truly enables you to operate in a hybrid cloud that doesn’t get you "technically" locked-in to one public cloud vendor.

          IaaS is the only true hybrid cloud model without vendor lock-in

Cloud isn’t then just Public Cloud.

Cloud is about industrialization of IT, being its architecture enablers: virtualization,  automation and orchestration software, and most important, people and processes.

Today it is possible to acquire a pre-configured infrastructure, with all the software already deployed on it to provide an out of the box self-service portal, charge back tools, automated deployment workflows, and all those other tools that truly enable a private cloud according to the characteristics of cloud described above as per the N.I.S.T. definition of cloud computing.

Considering the profile of your organization, and the different types of business processes you’ll be supporting, cloud must definitely be a part of your IT strategy conversations.

In many cases, implementing a private cloud and adopting a cloud operating model on your own IT organization may show to be the right solution to your most critical and customized business applications. But in many cases I’m finding out that with the increased security certifications obtained by cloud companies like Virtustream, the option for a hosted / managed private cloud receives a lot of very strong positive feedback.

Having hosted managed private cloud offerings, brings most of the benefits of a public cloud but under your organization’s span of control.

Being Cloud a key topic in your architecture discussions today, adopting a TDI and Virtualized infrastructure for your on-premise SAP HANA deployment will also enable you to be prepared for the adoption of a Hybrid Cloud IaaS scenario, where you’ll be able to have full control of the mobility of your workloads between your private and multiple cloud providers operating under this model.

This scenario will for example enable:

• Higher utilization of private assets: provisioning only for average workload, being able to leverage public cloud for peaks;
• Simplification of operations: by having the same base architectures on-premise and on your cloud provider you can for example setup your disaster recovery to the cloud in a fully automated way;
• Reduction of the risk of change: having a new project you can just deploy a system either on-premise or on the cloud, whatever is more convenient, being able at a later stage to move that system in either direction depending on your “workload filter” and whether the applications will more or less critical and confidential.
• Drive business innovation: one of the key aspects to business innovation is to be able to experiment at a low cost. This scenario provides you full flexibility, so that you don’t have to say no to your business ever. In this scenario you can truly operate as a business broker taking the best of your private infrastructure as well as the public providers you are working with.

           Conclusion

Hope that at this point you agree with me that “Cloud” must be in every organization’s strategy and architecture discussion.

Which one is the right one for you? There is definitely not a “one size fits all” answer.

The good thing is that there are choices that can map to your specific organization, industry, location, and business scenario.

I hope this discussion helps you get started with your own ideas on cloud.

From my side, it is my true belief that an Hybrid IaaS model will be the leading option for mission critical SAP application, being based on SAP HANA or AnyDB.

If you want to get started in engaging with candidate providers to work with you on building your cloud strategy and architecture, being close to me, let me advise the following:

• EMC Federation Enterprise Hybrid Cloud for SAP: this solution makes available a fully enabled cloud infrastructure factory build and fully integrated, delivered pre-configured on your datacenter, leveraging the best technologies from the EMC Federation (EMC, VCE, VMware, Virtustream), so that you can start operating a private cloud without having to build all functionalities on your own from scratch;
• Visit https://community.emc.com/docs/DOC-30532 for more information.
• Virtustream Hosted and Managed Cloud offerings for SAP: Virtustream is a recognized leader in cloud for SAP and SAP HANA and has been recently acquired by the EMC Federation, being as well one of the only 3 SAP Premium HANA Cloud Partners.
• As Virtustream keeps operating as an independent company please visit http://www.virtustream.com/ for more information.

EMC Acquires Virtustream, the leader in cloud for mission critical apps like SAP HANA

EMC has signed a definitive agreement to acquire Virtustream!

This will dramaticaly improve the value of the EMC Federation in the SAP space, and will further simplify the deployment of SAP Workloads, including SAP HANA, for all those organizations looking for an Hybrid Cloud environment, that has the flexibility to adapt to each company's specific constraints in terms of Risk, Compliance, Technical and Financial conditions.

This is a BiiiG topic for SAP customers around the world and for service providers as well, and for that, let me spend some time to share my own personal perspective on why this matters to you.

The news came out yesterday, and you can read more about it, or subscribe to listen to the recording of the press conference at: http://www.emc.com/about/news/press/2015/20150526-01.htm

Virtustream, being already quite known in the U.S. and in particular in the SAP World for providing Cloud Infrastructure as a Service, for enterprise, mission critical, high workload applications, isn't yet a familiar name in many other parts of the world.

To better understand Virtustream's current capabilities, have a look at the following charts from some of the Market Analysts:

Forrester classified Virtustream as the clear leader in "Hosted Private Cloud Solutions", and Gartner recognizes Virtustream's leadership as a niche player. Now with the EMC Federation on its back, Virtustream's (and the EMC Federation) position in Gartner's analysis, will only improve.

The relevance of the names already in Virtustream customer list also confirm their strength: http://www.virtustream.com/customers/list

So, let me share some words to explain my own personal perspective on what is the value for SAP Customers, from having Virtustream joining the EMC Federation as an independent company.

          What kind of applications (workload profiles) Virtustream specializes on ?

First of all, it's important to understand what kind of SAP Workloads Virtustream has been hosting.

So, let's imagine that you have two applications in your datacenter: one to support your "order to cash" process, including billing and accounts receivable, and another to do career planning and performance appraisal for your employees.

Both applications are important, but the impact of instability or even unavailability of these two applications on the ability for your company to keep operating, are significantly different.

If you loose your career planning and employee performance management system for a couple of days, your company will not stop to operate and generate revenues (and some employees may even be happy about it), while if you loose your "order to cash" system, money stops coming in and your company will go into serious trouble.

This is why, most companies can easily buy into the idea of running the "career planning and performance management" system in a public cloud environment (where they have NO span of control on the architecture stability and resilience), and hesitate a lot (not to say that won't even consider) to run their "order to cash" system in the cloud.

So, let's agree at this stage to call the "order to cash" system, a mission critical workload, in the sense that without it, companies loose their ability to keep operating and fulfill their goals, or even if those systems see their performance and stability decay, it will imply an important negative impact on business.

It's all a matter of risk evaluation. For organizations to consider running mission critical applications in a cloud environment, they will need to ensure a set of conditions: availability guarantee, performance guarantee, and ability to audit (and for the service provider to demonstrate) capability to operate such an environment in a stable and predictable way.

The majority of public cloud offerings do not offer such guarantees.

Well, Virtustream having been born by the hands of people coming from the SAP ecosystem, that had experience setting up and managing these mission critical systems, do fully understand the implications of hosting and operating such environments, and have build their offerings to address specifically the needs of the Global 1000 (the 1000 largest organizations in the world) in regards to cloud offerings for their most critical business systems.

Also Virtustream, understanding well the reality of these large global organizations, also understands that for some systems, those organizations - not wanting to engineer and manage them - may want to keep a significant span of control on them. Meaning, having them be operated in a "hosted, managed, private cloud environment". So, it's having the systems under their span of control (or even under their own property), but hosted and managed in a cloud model in the same way public clouds are managed, to reap all the benefits in terms of business agility, operational risk and costs that a cloud model can offer.

These companies may want as well to dynamically choose what systems run on their own private cloud, and which run on a public cloud, dynamically moving (and controlling the movement in real time) of these systems between their private cloud and the public cloud.

          What are the business benefits of the Virtustream model ?

Such a model enables them to manage risk in the sense that they decide which systems are 100% under their span of control, and which ones are not, by being able to dynamically move systems across boarders between their private cloud and the public cloud.

It enables them to manage cost, by ensuring the same efficient management model that exists in the cloud for a better utilization of their assets, while being able to leverage the public cloud for peaks in demand, avoiding the need to over provision capacity for projects, and keeping their "private systems" provisioned just for average workload needs, and so maximum utilization.

Here Virtustream is really unique as they charge by utilization, and not by allocated capacity like most cloud companies do, making them way more cost effective for that reason, and boosting the benefits for organizations from operating in a Hybrid Cloud Environment. This is a part of the Virtustream secret sauce, where they have come up for example with the concept of microVM.

It enables customers to be more agile, as Virtustream has embedded in their Cloud offering and orchestration software, way more than just provisioning of virtual servers. Coming from their SAP background, Virtustream founders have build in as well automation mechanisms for things like systems cloning and refresh (fundamental and usually labor intensive for most SAP customers), making it simpler for IT organizations to keep up with the demands from their business units.

And again, with the beauty of all of this, in having the private and public cloud resources managed through the same tool set, and both able to bring in the same benefits > complete transparency.

Don't want here to explain what is Virtustream, as you can have it explained in 5 minutes in the words of its founder and CEO "Rodney Rogers" at http://www.virtustream.com/blog/2015/05/24/virtustream-technology-overview/

          How Virtustream joining the EMC Federation, benefits SAP Customers in general ?

So, why is this so important for SAP Customers: Virtustream joining the EMC Federation as an independent company.

First of all, Virtustream has been working very closely with SAP (having SAP been one of the early investors in Virtustream) to drive cloud adoption for SAP applications, and SAP HANA in particular. There is a lot more to the collaboration between Virtustream and SAP, which you can read about at the Virtustream site and blog.

On the other side, Virtustream having started as a "Venture Capital Funded Company", would need at a certain point in time to expand their financing capabilities in order to scale and be able to keep up with the significant demand increase.

Also, to expand its reach it would need further access to the supporting technologies of their business model, and access to markets by means of a broader sales force generating demand for them.

Being today the collaboration between Virtustream and the SAP Community inside EMC already very close, being SAP one of the top strategic partners for the EMC federation of companies (EMC Information Information Infrastructure, VMware, Pivotal, VCE, RSA) and running Virtustream most of their operations on top of technologies from the EMC Federation (VCE VBlock, VMware, etc), all of this aligned to the partnering model the EMC Federation of companies fosters, I truly believe that Vistrustream was a perfect match for EMC.

So, joining the EMC Federation as an independent company will provide Virtustream the robustness of belonging to this amazing groups of companies, enabling it to accelerate their growth, expand their reach, and extend their coverage way further from their current market reach and portfolio. By being an independent company within the Federation, it will enable Virtustream "not to get dispersed or diluted" like it happens on many acquisitions in the IT world, and so keep focused on its unique business strategy. That is why it is referred on the announcement that Virtustream is now "EMC Strong".

As I meet with CIOs and their direct reports all over the world (just landing now coming from a CIO Summit in Prague), they all agree with my own experience that, what works for SAP Applications, will work for almost everything else as well. So I would say, that coming from an SAP background, it shouldn't be hard for Virtustream to expand their reach into other application areas.

With Virtustream, EMC completes its vision for an end-to-end cloud offering, from the "Federation Enterprise Hybrid Cloud" which aims to cover the private on-premise needs of customers, with Virtustream covering the on-premise and off-premise managed private clouds, and vCloud Air providing a completely public cloud environment (customer has no span of control on infrastructure architecture/operations), having these three working seamlessly.

In summary, for end customers: this acquisition of Virtustream by EMC, will enable you to implement an Hybrid Cloud model today, with out of the box, ready to use architectures for your private cloud, leveraging all the best practices from operating a public cloud, being able to leverage Virtustream's expertize also to manage your environment up to the SAP Basis layer, including if needed performing the projects to migrate your workloads to the cloud, all with the assurance of a robust global corporation recognized for its strength in the "mission critical world" like EMC.

          How about companies with technical and legal limitations to use U.S. based clouds?

There are 2 additional key aspects to which I'm very aware, as I do also work a lot with customers in Latin America, Eastern Europe, Middle East and Africa, that are very important in regards to customer decisions about any "cloud plans": technical and legal limitations for cloud in these regions.

One of the key limitations of the "U.S. born and based" public cloud offerings, is that they were born to be "public cloud only" and most of the times hosted only on a very limited number of datacenters, mainly in the U.S.

Well, for a U.S. based company, or a company operating mainly in the U.S., this only represents advantages. Even for most truly global companies, this does not represent a problem.

But there is a lot more world than the U.S., and the geo-political environment in other parts of the world, associated with technical limitations like the access to cheap, stable and reliable broadband communications, makes it impossible for certain organizations to consider the possibility to host any of their business critical systems outside the borders of their countries. More, in many countries in the world, there are "data sovereignty regulations" that forbid local companies from placing their data from outside the physical borders of the countries.

There are also the cases of Global Corporations, that having operations in certain countries, are also obliged (either due to legal or technical reasons) to host their systems closer to their operations.

The consequence here is, even if the existing public could offerings based out of the U.S. were reliable enough to host "in-production" business critical applications like SAP (which most are not), due to the technical and "data sovereignty" constraints, those offerings would not be an acceptable (or even possible) alternative for many companies in the world.

One possibility would be Virtustream "managed cloud services", enabling the systems to be in the location of the customer, but being fully managed with all the cloud best practices up to the SAP Basis layer.


          EMC, Virtustream and Service Providers

But there is another perspective here, where both EMC and Virtustream share one common understanding, that they will not be able to reach to the whole world, and maybe it isn't at all a good idea to try and do it all themselves. In most cases there are already local service providers who are building their own local public cloud offerings to attend to the needs of those companies limited either by technical or regulatory limitations in regards to hosting their business critical data outside the country.

Virtustream, apart from providing their own "Infrastructure as a Service" public cloud offering in the U.S.  and Western Europe, and their "managed cloud services", also licenses their software to power Service Providers all over the world.

EMC also has a strong program to equip service providers around the world with "cloud enabled infrastructures".

So, here both companies come together to provide a comprehensive "hardware and software" solution, ready out of the box, either to power service providers or large enterprises looking to build their own private clouds.

Check here the EMC Cloud Service Provider Directory

Having Virtusteam's own IaaS offerings in a Public Cloud model, as well as their managed services targeted at those customers wanting to have a managed private cloud, together with a vast and strong network of service providers all around the world operating on the same architecture, along side with customers having their own private clouds running on this architecture as well, will truly enable IT organizations and their CIOs to become "IT service brokers" for their businesses, procuring the right IT services, being from their private cloud, a local cloud provider or a global cloud provider, according to their financial, technical and regulatory context policy (needed span of control) applicable to each application environment, knowing that they have partners in the public side ready to host and operate their most critical business applications.

          Conclusions

So, I believe these are truly amazing news for the SAP ecosystem (SAP themselves, customers, system integrators and service providers), as the acceleration of the expansion of this model all over the world, will further simplify things like migrating to SAP HANA, and reducing the operating costs of running SAP Applications (including SAP HANA) while improving the performance and agility of existing business systems.

For example, with Virtustream operating as an independent company within the EMC Federation, a Global Company will now be able to have a truly global cloud strategy, that fits its legal, technical, financial and risk model, for their most critical applications (SAP and non-SAP, as what works for SAP will most likely work for everything else), managed through the same model, using public, private, managed or hosted-managed as appropriate without getting locked-in, truly making justice to the principle of "think global, act local" within a Global Hybrid Cloud.

I would invite you also to have a look at the blog Virtustream's CEO, Rodney Rogers published at the time of this announcement with his own personal perspective.

Adding to this fact that I already have some very good friends at Virtustream, it will be truly a pleasure to bring the Virtustream value to my conversations with IT leaders all over the world.

Know more about Virtustream at: http://www.virtustream.com/