Reducing Costs in SAP Migrations: A Detailed Analysis of AWS Infrastructure Expenses

Migrating SAP workloads to AWS has become an essential strategy for businesses seeking enhanced scalability, performance, and cost-effectiveness. However, understanding and optimizing the costs of such a migration is critical for achieving long-term financial benefits. This blog post will explore a step-by-step guide to estimating AWS resource costs and how to present these costs to decision-makers to ensure informed, data-driven decisions.

Project Overview: Migrating SAP Workloads to AWS

Migrating SAP workloads to AWS involves moving critical enterprise applications such as SAP HANA, SAP S/4HANA, and other legacy systems into the cloud. The essential goals of the migration include improved infrastructure flexibility, better system performance, enhanced security, and cost optimization. However, navigating the cost structures associated with running SAP on AWS requires careful planning, as businesses must balance resource allocation with budget constraints.

AWS offers a wide array of services designed specifically to support SAP workloads, such as high-performance EC2 instances (X1, X1e, R5), Amazon Elastic File System (EFS), and Amazon S3 for storage. Choosing the right combination of these resources is crucial for operational efficiency and cost control.

Part 1: Estimating Resource Costs on AWS

AWS provides several tools and services that allow businesses to estimate and optimize their SAP migration costs accurately. The primary components that contribute to AWS costs for SAP workloads are compute (EC2), storage (S3, EFS), database (RDS or SAP HANA), networking, and additional AWS services like backups, monitoring, and scaling.

Compute Resources: AWS EC2 Instances

For SAP, compute resources are usually the most significant cost. AWS offers specialized EC2 instances optimized for SAP workloads:

Memory-Optimized Instances (X1, X1e, R5): These instances are ideal for running memory-intensive applications such as SAP HANA.
On-Demand vs. Reserved Instances: While On-Demand pricing is flexible, Reserved Instances offer significant cost savings (up to 75%) if you’re running SAP workloads long-term.

Storage Costs

SAP applications rely heavily on storage for databases, logs, and backups. AWS provides various storage options:

Amazon S3: Ideal for backups and data archiving.
Amazon Elastic Block Store (EBS): Used for SAP HANA persistent storage.
Amazon Elastic File System (EFS): A scalable file storage service that can be used for shared file systems in SAP environments.

Database Costs

Running SAP HANA or any other database engine on AWS requires dedicated resources:

Amazon RDS: Managed relational databases for SAP workloads.
SAP HANA on EC2: This offers the flexibility of running SAP HANA in memory-optimized EC2 instances.

Networking and Data Transfer

AWS networking costs include internal (within AWS) and external (to the internet or on-premises systems). Configuring VPC subnets and using AWS Direct Connect can ensure reliable connectivity while minimizing data transfer costs.

Backup and Monitoring Costs

Services like AWS Backup and Amazon CloudWatch offer automated backup management and monitoring solutions that add additional costs to your infrastructure but ensure high availability and compliance.

Part 2: Presenting Estimated Costs for Decision Makers

To make informed decisions, decision-makers need a comprehensive view of the estimated costs and potential savings associated with migrating SAP workloads to AWS. Here’s how to present the estimated costs:

1. Utilize AWS Pricing Calculator

AWS provides an AWS Pricing Calculator that allows you to estimate the total costs based on your specific workload requirements. This tool breaks down the costs into computing, storage, and other necessary services, giving you a precise estimate.

2. Compare On-Demand vs. Reserved Instances

Show the comparison between On-Demand pricing (more flexible, higher cost) and Reserved Instances (longer-term commitment, reduced price). Present scenarios with different timeframes (one year, three years) to highlight potential savings from choosing Reserved Instances.

3. Highlight the Cost Savings from Right-Sizing Resources

Right-sizing involves matching instance types to the actual workload requirements. Demonstrating how different EC2 instance types affect the budget can help decision-makers understand the importance of optimizing resources.

4. Illustrate Total Cost of Ownership (TCO)

Total Cost of Ownership should include the infrastructure costs and operational overhead, such as monitoring, backups, security, and network management. Presenting the TCO with a clear breakdown allows stakeholders to see the comprehensive cost implications of running SAP workloads on AWS.

5. Leverage Cost Optimization Best Practices

Discuss the potential for using AWS cost optimization best practices like auto-scaling, spot instances, and the AWS Savings Plan. These methods can reduce costs while maintaining the performance and availability of SAP systems.

6. Provide Clear ROI Projections

For decision-makers, the return on investment (ROI) is critical. Highlight the ROI by showing how AWS can reduce capital expenditure (CapEx) in favor of operational expenditure (OpEx) and how the scalability of AWS infrastructure ensures that you’re only paying for what you use.

Conclusion

Optimizing SAP migration costs requires a thorough understanding of AWS infrastructure expenses, including compute, storage, database, and network costs. By accurately estimating these costs and presenting clear, actionable insights to decision-makers, businesses can ensure a successful and cost-effective migration to AWS.