Understanding SAP Cost on Cloud (IaaS)

Understanding SAP Cost on Cloud
KCloud managed SAP HANA IaaS
 provides managed cloud infrastructure to host SAP ECC or HANA applications enabling customers with innovative ways to build, operate and consume technology. This blog helps CXOs to understand the SAP Cost on Cloud.

Cloud Adoption

Studies indicate that 85% of CXO’s are keen to establish and pursue a cloud strategy. Also, studies indicate that by 2020, 80% of organizations will migrate applications from their own data centers to public cloud IaaS to achieve meaningful cost savings. CIO’s are constantly evaluating the best approaches for their organizations and some of the points mentioned here are based on my several such conversations.

Customers invested in data centers are also fostering phased approaches to shift workloads to the cloud. New installations are pursuing the cloud first policy unless otherwise due to regulatory requirements on data classifications or residence.

Understanding SAP Cost Drivers on Cloud

Based on your solution landscape, SAP application landscape and its hardware sizing need to be defined. This will give you the list of instances, CPU, memory and storage requirements. In case of HANA, the sizing tool (SAP quick sizer) provides the HANA memory requirements.

Also, based on the backup policies you must determine additional storage requirements. Let’s look at the various cost drivers assuming we have all the necessary inputs for computing, storage, and HANA.

Primary Hosting services

  • Compute
  • Storage
  • HANA appliances
  • Cold Storage (backup copies)

DR Hosting services

  • Compute (for PRD)
  • Storage (for PRD)
  • HANA appliances (for PRD)

Network Services

  • VPN connectivity (based on the number of sites)
  • Data transfer IN / Out to user sites
  • Data transfer IN/ Out to DR sites

Cloud hosting support Services

  • Enterprise-class 24×7 support service for cloud

Software Costs

The following items add costs other than SAP and cloud provider software such as OS.

  • Antivirus
  • Back-up & recovery
  • Management
  • Network monitoring
  • System monitoring
  • Security monitoring

Deployment services

  • Analysis and design services
  • Cloud Infra set-up services
  • SAP application migration to cloud services
  • IT operation automation services


The following items add expenses other than SAP and cloud provider software such as OS.

  • Monthly cloud subscription costs
  • Software subscription / AMC
  • IT resources
  • SAP basis resources


The above list gives covers most of the key cost driver components which you must consider to budget your cloud migration. The blog “UNDERSTANDING THE SAP CLOUD ROI” provides indicative costs for a typical SAP S4 HANA implementation on-premise.

To learn more about which cloud ERP is right for your organization and the ROI which you can gain, please fill this form. Also, you may email us at info@kaartech.com

Rajesh Deivasigamani

Over 20 years of experience in SAP based enterprise solutions, and now responsible for architecting business solutions for customers worldwide in line with the industry and technology trends. Previously responsible for developing and leading KCloud's long-term business strategy, establishing the global footprint and achieving growth and profitability goals. Experienced SAP Architect / Consultant dealing with SAP and enterprise system paradigms that help deliver value to customers worldwide. My value chain exposure now includes biggest oil & gas and petrochemical industries, as well as a number of other industry sectors. My technical and functional exposure to SAP includes either managing or supporting over 12 projects and programs, covering all SAP functionality and complex integrations. I am since been involved in delivering and advising on some of the biggest and most innovative SAP/HCM projects implemented in MENA.

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