Reducing SAP Migration Costs: A Comprehensive Guide to AWS Infrastructure Expenses

Migrating SAP systems from on-premises infrastructure to AWS is crucial for organizations looking to leverage cloud technology’s scalability, flexibility, and cost-efficiency. However, understanding and optimizing the costs associated with this migration is essential for financial sustainability. This blog post explores the various components of estimating and managing AWS infrastructure expenses during and after an SAP migration.

Project Background: SAP Migration to AWS

Migrating SAP workloads from on-premises environments to AWS provides organizations with enhanced operational flexibility, improved performance, and reduced hardware maintenance burdens. Moving to AWS often includes transitioning core SAP systems such as SAP ECC, SAP S/4HANA, or SAP Business Warehouse (BW) to virtualized cloud environments.

This migration project typically involves several phases:

Assessment: Identify the current on-premises SAP infrastructure and evaluate how it maps to AWS services.
Planning: Determining the migration strategy, including lift-and-shift, re-platforming, or modernization.
Execution: Performing the migration, testing, and ensuring all services are operational in the cloud.
Post-migration Optimization: Monitoring performance, scaling services, and optimizing costs.

Infrastructure Setup and Layer Division

In AWS, SAP environments are typically divided into several essential layers, each contributing to operational and cost factors:

Compute Layer: AWS EC2 instances host SAP applications, databases, and other components. Selecting instance types (e.g., memory-optimized, compute-optimized) directly impacts performance and costs.
Storage Layer: Storage services like Amazon Elastic Block Store (EBS) provide the required storage for SAP data. For example, high-performance EBS volumes are recommended for critical databases, while lower-cost storage options can be used for less intensive workloads.
Networking Layer: Virtual Private Clouds (VPCs), subnets, and security groups manage network traffic, connectivity, and security in AWS. Load balancers, NAT gateways, and VPN connections to on-premises or other cloud environments may also add to the cost structure.
Backup and Disaster Recovery Layer: Services like AWS Backup and cross-region replication ensure data protection and minimize downtime risks. These services are essential but must be factored into cost planning.

Understanding this layered architecture is critical to cost optimization. Organizations can allocate the resources where they matter most while minimizing expenses on less critical layers.

Cost Estimation Methodology

Estimating migration and operational costs for SAP on AWS requires a strategic approach that considers upfront and ongoing expenses. Here’s a step-by-step methodology to guide the process:

Assessment of Existing Resources: Understand the current on-premises SAP system, including hardware specifications, network configurations, and storage requirements. This serves as a baseline for determining equivalent AWS services.
Mapping to AWS Services: Identify the AWS services that match your SAP environment, including EC2 instances, storage options (EBS, S3), databases (RDS, Aurora), and networking solutions. Choosing the exemplary service and instance type (e.g., r5, m6, etc.) will directly impact costs.
Right-Sizing: Optimize compute and storage resources by choosing the instance types that offer the required performance without over-provisioning. Right-sizing your instances ensures you don’t overpay for the capacity you don’t need.
Monitoring Tools: AWS monitoring tools like AWS CloudWatch can track real-time resource usage and adjust the infrastructure as needed, enabling ongoing cost control.

Pricing Calculator Utilization

AWS offers a comprehensive Pricing Calculator that helps estimate the cost of running SAP workloads on the cloud. This tool allows you to input the following details:

Instance Type and Count: Choose the right EC2 instance types based on your SAP applications’ memory and compute requirements.
Storage Needs: Specify the type and amount of storage, whether using EBS or S3.
Networking Costs: Estimate data transfer costs, NAT gateway usage, and VPN connections.
Backup and Disaster Recovery: Include costs for AWS Backup, replication services, and snapshots for data security.

The pricing calculator provides a detailed cost estimate after you input your SAP infrastructure details, allowing you to adjust configurations to meet budget goals.

Long-term Financial Implications

While initial migration costs can seem high, the long-term financial benefits of running SAP on AWS often outweigh these expenses. Here’s a breakdown of the economic impact over three years post-migration:

Elasticity and Scaling: AWS’s pay-as-you-go model allows businesses to scale up resources during peak usage and scale down during off-peak periods, avoiding the upfront capital expenditure associated with maintaining on-premises hardware.
Cost Optimization Opportunities: AWS offers various pricing models, such as Reserved Instances (RI) and Savings Plans, which can significantly reduce long-term costs for predictable workloads. Leveraging these options can lead to savings of up to 70% over On-Demand pricing.
Operational Efficiency: AWS continuously invests in infrastructure and technology improvements, which can lead to performance enhancements at lower costs. Migrating SAP workloads to AWS reduces hardware maintenance, power, cooling, and data center space costs.
Ongoing Monitoring and Optimization: AWS provides tools to monitor and optimize costs over time, including AWS Cost Explorer and Trusted Advisor. These tools provide visibility into cost drivers and recommend further optimizations.

Conclusion

Migrating SAP systems to AWS requires a thorough understanding of the infrastructure setup, cost estimation methods, and long-term financial considerations. Businesses can achieve significant savings and operational efficiency by leveraging AWS pricing calculators and cost optimization tools.