Microsoft SQL Server TCO Study for SAP ERP Customers

Transcription

1 Microsoft SQL Server TCO Study for SAP ERP Customers White Paper Published: February 2009 Summary: By migrating an SAP ERP environment to Microsoft SQL Server, unplanned downtime could be reduced by over 20 percent, IT labor costs could be cut by nearly 25 percent, and ongoing software support costs could be reduced by up to 85 percent. Migration from competitive databases is simplified by using tools, best practices, and SAP migration certified specialists. Quantitative results may emerge in as little as nine months, with an ongoing annual savings potential of 30 to 37 percent. For the latest information, see

2 Copyright The information contained in this document represents the current view of Microsoft Corporation on the issues discussed as of the date of publication. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information presented after the date of publication. This white paper is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, AS TO THE INFORMATION IN THIS DOCUMENT. Complying with all applicable copyright laws is the responsibility of the user. Without limiting the rights under copyright, no part of this document may be reproduced, stored in, or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise), or for any purpose, without the express written permission of Microsoft Corporation. Microsoft may have patents, patent applications, trademarks, copyrights, or other intellectual property rights covering subject matter in this document. Except as expressly provided in any written license agreement from Microsoft, the furnishing of this document does not give you any license to these patents, trademarks, copyrights, or other intellectual property Microsoft Corporation. All rights reserved. Microsoft and all listed Microsoft product names are trademarks of the Microsoft group of companies. All other trademarks are property of their respective owners. Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 1

3 Contents Executive Summary... 3 Introduction... 5 Data Sources and Methodology... 5 SQL Server Migration Benefits... 6 Ongoing Cost Reduction... 9 IT Labor Cost Reduction Software Support Cost Reduction Hardware Cost Reduction Infrastructure Optimization SQL Server Migration Optimization Project Outcomes Migration Cost Calculation Migration Best Practices Summary Appendix A. Data Sources and Methodology Appendix B. Typical Migration Project Plan Appendix D. Database Licensing Complexities Appendix E. IBM DB2 on AIX to SQL Server Migration Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 2

4 Executive Summary In this study, data was collected from 68 companies running SAP on a variety of hardware and database platforms. In addition, an in-depth analysis was conducted on five companies who had migrated from a competitive platform to Microsoft SQL Server. Figure 1: Summary of Benefits As shown in Figure 1, the case for migration is compelling. Migration from an Oracle database running on a UNIX-based platform to Microsoft SQL Server can yield an Internal Rate of Return 1 (IRR) of 74 percent to 137 percent while simultaneously lowering unplanned downtime and increasing system performance. The study found that the larger the SAP ERP implementation, the larger the percentage of savings. The major savings drivers are shown in Figure 2. A picture of the costs and savings over five years is shown in Figure 3. Figure 2: Major Cost Savings Drivers 1 IRR is the discount rate often used in capital budgeting that makes the net present value of all cash flows from a particular project equal to zero. Generally speaking, the higher a project IRR, the more desirable it is to undertake the project. A 10 percent discount rate was used in all NPV calculations. Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 3

5 Figure 3: Migrating to Microsoft SQL Server yields large returns. Implementing Infrastructure Optimization 2 best practices including database mirroring, clustering, and rulesbased system monitoring can further reduce downtime and lower costs. These three capabilities are included at little or no additional cost as part of Microsoft SQL Server 2008 and Windows Server By leveraging external expertise and embracing migration best practices, migration projects are both low risk and modestly priced. All the migration projects studied were viewed as successful, both operationally and financially. Migration costs were typically repaid within 10 to 15 months. In summary, the migration of an SAP ERP environment 3 to SQL Server provides a rapid Return on Investment (ROI) and persuasive ongoing cost savings. Organizations will receive the greatest savings from IT labor cost reduction and ongoing software support fees. Cost savings are not the only motivation to migrate. The resulting environment is more reliable and scalable, with less unplanned downtime. Implementing Infrastructure Optimization best practices can provide even greater returns. Recommendations: When an SAP ERP environment is 18 to 24 months out from a major inflection point in the system lifecycle, such as during a hardware refresh, begin researching migrating to the SQL Server platform. Visiting is a starting point and talking with Microsoft customers currently running on SQL Server is a way to gain knowledge and confirm suitability. Call on specialists certified in SAP migrations as well as Microsoft and hardware vendor support to ensure a cost effective and low risk migration. Review the migration best practices described later in this paper to ensure smooth implementation. Investigate Infrastructure Optimization best practices for further cost reduction. 2 Microsoft s Infrastructure Optimization Initiative is a series of models intended to improve operations based on best practices that reduce cost or improve business performance. Process improvement related optimization models are available from both industry and academia. See for more details. 3 An SAP environment includes the entire system architecture of an SAP implementation, including hardware platform, operating system, database, storage, networking, and so on. It is typically three-tiered architecture. Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 4

6 Introduction Enterprise Resource Planning (ERP) systems are the nervous system of an organization, tracking and coordinating vital operational support. They move products, place orders, assist in decision making, track projects, and support numerous industry specific needs. Implemented primarily in the 1980s and 1990s, most organizations have their ERP environments established and under control. The current task is optimizing the management of these environments by lowering costs, improving reliability, and for many companies, scaling for system growth. As companies approach an inflection point in their ERP system lifecycle whether it is the need for a hardware refresh, significant capacity increase, or merger-driven database consolidation they often re-evaluate their hardware and database choices. Many of these companies have found that by migrating their SAP ERP environment from a competitive database and platform to SQL Server and Windows Server, they are able to meet all their optimization goals. To understand this movement in more detail, an extensive survey of SAP ERP customers was conducted to determine costs, reliability, and migration experiences. The following benefits of migrating an SAP ERP environment to SQL Server software running on industry standard hardware were discovered: Migration costs were recovered within 10 to 15 months with the IRR ranging from 74 percent to 137 percent. Reduction in annual database and tools support costs of up to $1.1 million are possible for large installations. Unplanned downtime was reduced an average of 23 percent. Ongoing IT labor savings exceed 20 percent annually. This paper provides a method for determining the ROI attained when migrating to a SQL Server and Windows Server environment. It is written for enterprise business decision makers, technical decision makers, and deployment managers. Data Sources and Methodology The data used in this paper was obtained by surveying 68 companies running SAP ERP on a variety of environments. This information was backed up with qualitative information from SAP technical subject matter experts (SMEs), prior research 4 5 and publicly available case studies. To understand the migration costs and best practices in detail, comprehensive, qualitative and quantitative interviews were conducted with companies who had migrated to SQL Server within the last two years. 4 Moving ERP to SQL Server Yields Substantial Savings, Wipro (NerveWire, 2004) 5 TCO Benefits of SQL Server, Wipro (NerveWire, 2004) Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 5

7 Figure 4: Characteristics of Modeled Scenarios As with any complex system, there are many factors that influence the cost of an SAP ERP environment, including industry, geography, size of company, and so forth. There is no standard model that is applicable to all environments. Because of this, two scenarios were developed based on the 20th and 80th percentiles derived from the survey data. These scenarios are referred to in this paper as Medium and Large, and provide a starting point to explore the benefits, costs, and risks of transitioning SAP ERP environments to SQL Server. The key attributes of these two scenarios are shown in Figure 4. These scenarios can be used to evaluate a migration to SQL Server in your organization, and should be modified to address your individual requirements. SQL Server Migration Benefits Research shows that medium and large organizations that migrate to SQL Server may be able to significantly reduce overall costs 6. For example, companies that migrate from the Oracle database running on a UNIXbased platform to SQL Server attained a 74 percent to 137 percent IRR while simultaneously lowering unplanned downtime, and increasing system performance. See Figure 5 for total cost savings. 6 TCO = Total Cost of Ownership. Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 6

8 Figure 5: Migration Benefits Outweigh Costs Appendix A provides more detail on the data, model scenario attributes, and methodologies used in this paper. In Figure 6, a detailed cost savings breakdown is shown by category, and the drivers behind the savings. In general, Figure 6 reveals that: Labor costs are the largest general expense, and have the greatest potential for cost savings. It is clear that in order to reduce ongoing costs significantly, the IT labor expense must be reduced. Database and application software are the next biggest cost, especially in the large scenario. The savings percentages are more significant in this area. Database tool functionality, including monitoring, security, tuning, and clustering, are included with SQL Server, and thus incur no additional cost. The same tools from Oracle can increase costs anywhere from $14,000 to $491,000. Total annual savings are 30 percent to 37 percent. The larger the system, the greater the proportion of savings annual savings of over $228,000 and $2,400,000 respectively. Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 7

9 Figure 6: Annual cost savings are significant across all categories. Please see the subsequent sections of this paper for information on the following: Ongoing Cost Reduction examines annual operating cost savings available when moving to a Microsoft/SQL Server environment from an Oracle/UNIX environment. Infrastructure Optimization explores the benefits of using Infrastructure Optimization best practices with any environment. This section also explores the cost and difficulty of implementing the best practices in different environments. Migration Best Practices summarizes the optimal approach for a cost effective and lowered risk migration to SQL Server. Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 8

10 Ongoing Cost Reduction Most companies already have their SAP ERP system up and running. What matters most to them is reducing ongoing costs. In this section, the differences in ongoing costs between a SQL Server/Windows environment and an Oracle/UNIX environment are discussed 7. Figure 7 shows the ongoing cost savings by category. The sources of the savings are explained in the following sections. Figure 7: IT Labor Reduction is the Largest Area of Savings, Followed by Software Key Findings: Ongoing Costs Labor costs are the largest component of ongoing costs, and hence the best target for cost reduction. Labor cost savings of 20 percent or more are possible in a Microsoft SQL Server environment. Microsoft s licensing approach lowers software support costs by up to 86 percent. Unplanned downtime is reduced by over 20 percent in a Microsoft SQL Server environment. It is easy and cost effective to implement Infrastructure Optimization best practices for SAP on Microsoft SQL Server, further lowering labor costs and decreasing downtime. 7 Because SAP ERP licensing and storage costs are assumed to be the same across both environments, they are excluded from the analysis. Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 9

11 IT Labor Cost Reduction Labor cost savings ranged from 20 to 25 percent, and accounted for the largest area of savings. These percentages correspond to what was heard from migration customers who had experience in both medium and large environments. Other studies have found even greater savings. 8 It is hypothesized that these lower labor costs are driven by: Downtime reduction Lower salary costs Simplified administration The following sections explore these factors in more detail. Downtime Reduction Planned downtime is a scheduled outage of the SAP ERP environment in order to perform maintenance, install support packages, install software patches, and so on. Unplanned downtime is a system failure of some sort. A system failure might involve the network, server, hardware, software, or the database. A system failure could also be a security breach. Downtime was significantly lower with SQL Server about half that of the Oracle/UNIX systems, for both medium and large scenarios, as shown in Figure 8. Of particular note is the eight to nine hour annual reduction in unplanned downtime. This 22 percent reduction directly impacts the level of Incident Management labor. Figure 8: Unplanned downtime is reduced over 20 percent in the SQL environment. Though not included in the calculations, it is important to recognize the impact of lost productivity and other costs imposed by unplanned downtime on the rest of the organization. $40,000 an hour in end user productivity losses is not uncommon. 9 A reduction of eight hours in unplanned downtime would reduce annual productivity losses by up to $320,000. It is important to use lost productivity estimates that are specific to your company. 8 Microsoft SQL Server and Oracle Database: A Comparative Study on Total Cost of Administration, Alinean, Inc. May Disaster recovery spending How much is enough? Tom Pisello, CEO and founder of Alinean Jan Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 10

12 Salary Cost Reduction Beyond the IT labor hours saved, additional savings come from the fact that SQL Server DBAs and other Microsoft support positions generally draw a somewhat lower salary for any given level of experience as shown in Figure 9. Figure 9: Salaries are lower for Microsoft DBAs versus Oracle DBAs. Reduced Administration Complexity Earlier studies 10 have shown that a SQL Server environment has lower ongoing administrative costs than Oracle/Unix, especially in the areas of capacity management, performance tuning, and monitoring. Additional advantages stem from the more integrated features of SQL Server that can be found in the user interface instead of requiring command line interfaces, CRON jobs, shellscripting, or add-on products. Software Support Cost Reduction As shown in Figure 10, ongoing software support charges were lower for SQL Server 61 percent lower in the medium scenario, and 86 percent lower in the large scenario. 10 TCO Benefits of SQL Server, (NerveWire, 2004) Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 11

13 Figure 10: Differentials in software licensing costs are especially pronounced in the large scenario. Operating system support costs are lower in the SQL Server environment. But the biggest cost differentials are in the database, database tools support, and maintenance costs. The reason is due to the fact that annual database support costs are based on a percentage, usually 20 to 25 percent of the initial license costs. Thus, the differences in initial database licensing costs reverberate through the years as differences in support costs. An introduction to this topic is provided in Appendix C. Database Licensing Complexities. The base price for SQL Server licensing is less expensive; $25,000 versus $40,000 per processor for an enterprise edition license. But the real cost difference comes from the add-ons and multipliers that are present in the Oracle database licensing regime. These differences are especially noticeable in the large scenario, as the Oracle per-core processor charges are significant. A fault tolerant system with standby servers would see a larger differential. Hardware Cost Reduction Since storage costs are assumed to be the same across platforms, server support costs are the primary element in ongoing hardware costs. At less than 1 percent of total ongoing costs, server support contracts are a relatively minor contributor. Nonetheless, Windows-based hardware platforms save about $13,000 annually in the large scenario. Infrastructure Optimization How an organization manages its SAP ERP system is just as important as choosing a hardware platform, operating system, or database. To help organizations develop a roadmap for improving operations, Microsoft created the Infrastructure Optimization initiative. The Infrastructure Optimization initiative consists of a series of models based on best practices that reduce cost or improve business performance. 11 While the IO initiative is beyond the scope of this paper, the research for this paper has uncovered patterns in top performing organizations. These patterns have been used to formulate a set of best practices for managing an SAP ERP environment. Best practices are vendor agnostic and apply equally to UNIX and Windows, Oracle databases, and SQL Server. In SAP ERP environments, best practices reduce costs or unplanned downtime, and correspond to 11 To learn more about the important subject of Infrastructure optimization, see Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 12

14 recommended system architectures or management processes. This research identified three best practices that were used by the best performing organizations to reduce unplanned downtime including: Database Mirroring: Mirrored SAP ERP databases that provide a hot spare. Server Clustering: Clustered database and SAP ERP servers that provide an on-line spare. Rules-Based Monitoring: Automated monitoring software linked to a rule-based system that automatically and proactively remediates issues before unplanned downtime occurs. Figure 11 compares the use of the three best practices against unplanned downtime. The metrics shown are simple correlations based on a single variable in a complex system. The metrics should be used as a source of general information to show the value that implementing best practices provides. The metrics are not intended to be used for estimating the expected value of the best practices. Estimating the impact of a best practice would require a sample size much larger than what is available from this research. In general, this figure demonstrates how organizations use these best practices to reduce unplanned downtime. Figure 11: Implementation of Best Practices Can Reduce Unplanned Downtime All SAP ERP environments may benefit equally if these best practices are followed. In fact, the data used in Figure 11 represents the data retrieved from all 68 organizations surveyed across all databases and platforms. The difference between platforms and vendors has less to do with the value of the best practices, and more to do with the cost and difficulty in implementing them. As shown in Figure 12, the advantage that the SQL Server environment has is that much of the enabling technology comes bundled with the database or server license. Organizations running Windows and SQL can implement all three best practices with products available from Microsoft and reduce integration headaches. In the Oracle/Unix environment, the solution would require products from multiple vendors. In most cases, the Key Findings: Infrastructure Optimization Infrastructure Optimization best practices of database mirroring, server clustering and rule-based monitoring can reduce unplanned downtime in an SAP environment. The best practices are more easily and less expensively implemented in a SQL Server environment. mixed vendor approach increases costs and makes it more difficult to standardize on one vendor architecture across the organization. Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 13

15 Figure 12: It is Easier and Less Costly to Implement High Availability Best Practices in a SQL Server Environment SQL Server 2008 contains several significant enhancements to support Infrastructure Optimization, as outlined in the paragraphs below. See Appendix C for a full description of SQL Server 2008 improvements. Database Mirroring. Database replication has been enhanced in SQL Server, and is important to SAP ERP because of its ability to create an online spare database in the event that the primary database or database server fails. SQL Server database mirroring streams transaction logs to a mirror a server and a backup database. If the primary database fails, the system will automatically reroute connections to the backup database. Failover time is measured in seconds. Clustering. Microsoft Windows Server and SQL Server 2008 also have a clustering solution built into the core product at no extra charge. Clustering reduces downtime by providing redundant hardware. Failover clustering creates fault tolerant virtual servers that provide fast failover in the event of a database server failure. In SQL Server, support for failover clustering has been extended to SQL Server Analysis Services, Notification Services, and SQL Server replication. This solution requires certified hardware, and requires that failover is transparent to users and applications since IP addresses are redirected away from failed equipment. Rules-Based Monitoring. Rule-based system monitoring, is made available in Microsoft environments through System Center Configuration Manager 2007 (SCCM), formerly Microsoft Operations Manager. One implementation of SCCM 2007 can be used across an entire Windows Server infrastructure, monitoring all systems. For SAP ERP, SCCM 2007 has special counters available through the SQL Server Management Pack that monitor specific database services, database health, replication, database mirroring, and other key functionality. There is also a healthy Microsoft partner ecosystem that provides monitoring agents and analysis packages for specific SAP ERP modules and applications. SCCM 2007 monitors the SAP ERP databases, and is programmed with a set of rules that trigger actions when a failure is imminent. As a result, unplanned downtime is significantly reduced. Rule-based monitoring through SCCM 2007 is especially valuable because it also ensures the health of database mirroring used in the Database Mirroring best practice. Reducing unplanned downtime with best practices requires an investment whether the solution is from Microsoft or a number of other vendors. Determining if these best practices make sense for a specific organization depends on the cost of the solution verses the cost of the unplanned downtime. Since the cost of unplanned downtime is unique to every organization and measured in revenue and productivity loss, all Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 14

16 unplanned downtime metrics in this paper are presented in hours. Each organization will need to attach a dollar value to each unplanned hour of downtime, and then make a business case for the best practices. When building a business case for a migration to SQL Server, organizations should include the costs and benefits of these best practices in the business case. The ROI can change significantly if these best practices are made part of the equation. SQL Server Migration Optimization Given the significant savings in ongoing costs and reduced downtime between SQL Server/Windows Server versus Oracle/UNIX environment, it is not surprising that companies are investigating the possibility of migration when they reach a system lifecycle inflection point. Key Findings: Migration SAP Environment Migration process is well understood and well supported by vendors, and specialists certified in SAP migrations. Migration Best Practices ensure an optimal migration, with minimal risk and at a lower cost. Migration IRR is 74 percent to 137 percent with a payback period of 10 to 15 months. To learn Microsoft more about SQL what Server contributes Windows to a successful offers strategic migration, benefits in-depth such interviews as standardization, with five companies a rich who had migrated partner ecosystem, their SAP ERP and environment deep labor to pools. SQL Server in 12 months were performed. SAP migration experts from Microsoft and Microsoft partners who have assisted in a large amount of migrations were also interviewed. The reasons the interviewees had for changing platforms went beyond just lowering platform costs. Other reasons included: The ability to support a company-wide policy on centralization and standardize hardware and software platforms. A desire to leverage the vast Microsoft partner ecosystem. The ability to access a deep labor pool of available Microsoft expertise already in house, and in their local market. This was especially important to interviewees in remote locations. The inability to meet SLAs on their existing SAP ERP environment. Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 15

17 Project Outcomes Interviewees shared three major concerns at the start of the migration project: risk, cost, and reliability. Here is how these concerns played out over the course of their projects: Low Risk The interviewees noted that with proper planning, they viewed risk as low. Without exception, projects ran on schedule with minor problems. Most companies said there was nothing they would do differently next time. One interviewee expressed how smoothly the project had run. The process of SAP ERP database migration is well understood with deep vendor expertise, strong migration support tools, and well honed methodologies. External migration specialists were called on for every project, and were deemed central to the success of the project. The actual migration itself was completed over a two to three day period. The migrated systems ran well from day one, with only minor tweaks needed afterwards. Predictable and Reasonable Cost Migration labor costs were predictable and reasonable. Support was strong from both the hardware vendors and Microsoft and/or Microsoft partner consultants throughout the migration, reducing the amount of internal labor and expertise required. Typical migrations averaged 100 to 350 days of labor, typically spread over six to twelve months. Internal labor accounted for 60 to 80 percent of the total with the rest coming from external specialists in SAP migration, hardware vendors, and Microsoft. More Reliable Platforms In all cases, interviewees expressed that the new platform was more reliable and performed better than the one it replaced, often by a significant margin. Most interviewees used Microsoft reference customers to assure themselves of the SQL Server platform capabilities ahead of time. One interviewee performed a proof of concept test with the help of their hardware vendor and Microsoft. Appendix B contains additional information on typical project schedules, detailed tasks, and project roles in an SAP ERP migration project. Migration Cost Calculation There are two major cost elements in a migration the internal and external labor costs, and the licensing cost of SQL Server. The SAP ERP license transfers unchanged to the new environment. It is assumed that the migration occurs at a system lifecycle inflection point, as it did for all the interviewees, so a hardware refresh will occur regardless at some point. The net difference in hardware costs was factored in between the two systems as part of the migration cost or cost avoidance. Figure 15 shows a typical migration cost profile for both the medium and large scenarios. Notice that the labor costs are proportionately higher in the large scenario. These increases are driven by: Higher number and greater complexity of interfaces. Higher availability requirements. The increased attention to optimization in order to fit the larger database migration into the available downtime window. Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 16

18 Figure 15: Migration costs are reasonable for both medium and large scenarios. Migration Best Practices Interviewees and SMEs were asked what they would recommend as best practices during a migration to SQL Server. Their responses were consistent: 1. Use well honed SAP ERP migration tools and skills from SAP certified external consultants. Bring in specialists experienced in SAP ERP migration and database architecture. 2. Ensure a close working relationship among all vendors, consultants, and internal teams. 3. Employ strong vendor support to help reduce total labor costs. 4. Bring in business users up front, and have strong communication throughout to alleviate worries. 5. Double-check sizing and growth assumptions early in the process. 6. Consider migrating a less critical SAP ERP system first to build internal IT understanding and to ease user concerns. Subsequent migrations will be less costly and perceived as less risky. 7. Set the project calendar far in advance and stick to the dates. Include time for extra trial migrations if needed. A two day weekend should be enough time do the migration and go live for databases under six terabytes. 8. Currently, six terabytes is a practical limitation to the amount of data that can be migrated over a two-day downtime window and it makes sense to start a proactive migration project 12 to 18 months before this point is reached. Migration is still feasible for databases larger than six terabytes, but can be a more complex process requiring additional consulting resources. Summary The migration of an SAP ERP environment to SQL Server can provide an attractive ROI and ongoing cost savings. Look for most of the savings to come from IT labor cost reductions and ongoing software support charges. The resulting environment is more reliable and scalable, with less unplanned downtime. Implementing Infrastructure Optimization best practices can further reduce unplanned downtime and provide even greater returns. Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 17

19 Recommended Next Steps: When an SAP ERP environment is 18 to 24 months out from a major inflection point in the system lifecycle, begin researching migration to the SQL Server platform. Visiting reference customers is a way to gain knowledge and confidence in the results. Call on specialists certified in SAP migrations, as well as Microsoft and hardware vendor support to ensure a cost effective migration. Use the migration best practices described in this paper to ensure success. Investigate Infrastructure Optimization best practices and analyze which can provide the highest level of return for your organization. Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 18

20 Appendix A. Data Sources and Methodology The data used in this paper was obtained by a Microsoft partner, Wipro, surveying 68 companies running SAP ERP on a variety of environments using the screening parameters shown in Figure 16. Company sizes ranged from $600 million in revenue with 1,500 employees to $45 billion revenue with 100,000 employees. Over 90 percent of the companies were US-based. Figure 16: Screening Criteria for Survey Respondents In interviews lasting over an hour, data was collected on the hardware, software and support services, configurations and costs, in addition to various categories of IT labor, downtime, SLA goals, and more. The surveys were performed during December 2007 and January The quantitative information was gathered from telephone surveys with the 68 companies, and the qualitative information was derived from outside SMEs, prior Wipro research 12 13, and publically available case studies. To understand migration costs and best practices, detailed 1.5 hour qualitative and quantitative interviews were performed specifically to learn more about the migration process and costs. Five project leaders and additional members of their team that had migrated their company SAP ERP environment to SQL Server within the last 12 months were interviewed. This information was used to develop the migration data. 12 "Moving ERP to SQL Server Yields Substantial Savings, Wipro (NerveWire, 2004) 13 "TCO Benefits of SQL Server", Wipro (NerveWire, 2004) Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 19

21 To reduce the differences caused by varying business designs and processes, a subset of 38 companies was pulled consisting only of manufacturing companies. 16 of these companies were running on Microsoft Windows with SQL Server; and another 16 were running an Oracle database on a UNIX-based system. The remaining six were running other databases. The core of the analysis in this paper is focused on the Oracle database and SQL Server manufacturing industry respondents, though data from the other interviews was used to further illuminate the findings. Figure 17 shows a detailed breakdown of the surveyed companies, broken down by industry and database. Figure 17: Respondents Broken Down by Industry and Database The major cost elements in each category are shown in Figure 18. Figure 18: Cost Elements Included in Calculations Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 20

22 Appendix B. Typical Migration Project Plan 14 The SAP migration experts provided detailed information on typical project structures, tasks, roles, and so on. The information is provided here as a starting point for understanding the migration process. If you are considering a migration to SQL Server, it is strongly recommended to contact Microsoft and your hardware vendor as they provide subject matter expertise and proper support. 14 Information in this section was sourced primarily from Microsoft SAP expertise centers. Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 21

23 Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 22

24 Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 23

25 Appendix C. Database Licensing Complexities Achieving an apples to apples final comparison outcome when comparing database licensing is a complex undertaking as the paragraphs below describe. Base Price: is the cost for a single processor license. For a dual processor, multiply by two, a quad processor by four, and so forth. Microsoft and Oracle both license by processor. Add-on Tools: Want diagnostics, tuning, performance analysis, and advanced security? These features are bundled with SQL Server, but cost extra with Oracle, and these costs can nearly double the cost of the base license. Standby Server License: Standby servers are used for high availability and disaster recovery. Oracle requires full licenses to be purchased on these servers. With SQL Server, there is no charge. Failover Server License: Do you need a separate license for the failover system in your cluster? Not with SQL Server, but you do with Oracle if it is used on more than 10 different days a year. Multi-core Multiplier: Many servers currently ship with dual, quad, and octi-core processors. In other words, multiple CPUs are on a single chip. Oracle charges.25 to.75 of the base processor charge for each core, rounded up. An Intel- or AMD-based quad-core processor would be charged as.5*4=2 processors. SQL Server treats any multi-core device as a single processor. The Oracle multiplier applies to all the charges listed above tools, standby servers, testing labs, and so on. Volume Discount: Once the list price is calculated, a discount is applied based on the overall volume of business done with the vendor. Discounts of up to 30 percent are not uncommon. This is only an overview. For more licensing alternatives and other details on this topic, see Navigating the Enterprise Database Selection Process: A Comparison of RDMS Acquisition costs by Value Prism Consulting, January, 2006, or check each vendor Web site directly. Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 24

26 Appendix D. IBM DB2 on AIX to SQL Server Migration This paper has primarily focused on comparing Oracle to SQL Server since most of the survey respondents were using one of these platforms. However, 10 of the respondents were using IBM DB2, and that data was used to assess the value of a SQL Server migration for this scenario. As with the Oracle/Unix analysis, this analysis can be considered a starting point for your own evaluation and/or a definitive model. Figure 13: Products Used in the Evaluation for Both Medium and Large Scenarios Figure 14: Benefit Summary As was the case with the Oracle/Unix scenarios, the DB2/UNIX scenarios showed compelling reasons for organizations to migrate to SQL Server instead of refreshing their UNIX-based hardware. The return will be seen in 10 to 14 months, with an IRR of 84 percent to 118 percent, as shown in Figure 14. The two biggest differences between the DB2 and the Oracle cases were: DB2 licensing costs and therefore ongoing support costs were more expensive. IBM POWER5-based hardware was at least 50 percent more expensive than the hardware in the other scenarios, providing a greater cost reduction moving to SQL Server. Ongoing Costs Software support and IT labor savings were the major sources of savings from migration, just as they were in Oracle-based environments. The IBM DB2 licensing is based primarily on the total number of cores. It also is adjusted using a Processor Value Unit (PVU) factor, which tends to be higher for faster processor cores. Total DB2 pricing was 124 percent higher in the medium organization and 162 percent higher in the large organization when compared to SQL Server. It was also more expensive than Oracle s price. Database tools doubled the base license costs. Licensing costs required for the testing and development labs were also very significant in both scenarios. AIX initial license costs were modest; however, ongoing maintenance and support costs were high. AIX licensing is based on the number of processors versus Windows which is based on number of servers. This Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 25

27 compounds the OS cost differences for multiprocessor servers. For the medium scenario, AIX annual costs are 13 percent higher, but in the large scenario, AIX costs are double. Annual hardware maintenance and support costs as well as cost savings were not significant. Total IT labor savings observed from migrating to SQL Server from DB2 was 22 percent for both medium and large scenarios. The 22 percent savings was slightly lower than the savings observed when moving from Oracle to SQL Server because the survey indicated that DBAs were a little more efficient at managing the DB2 environment. However, the results were not nearly as cost effective as when managing the SQL/Windows environment. Migration Costs The cost to migrate to the SQL Server/Windows platform from the DB2/UNIX platform was essentially the same as migrating from the Oracle/UNIX platform. The cost to purchase Intel or AMD processor-based hardware was at least 50 percent less than purchasing the IBM POWER5-based hardware with almost equivalent performance. Microsoft SQL Server Migration Pays Big Dividends for SAP ERP Customers 26