Microsoft SQL Server Migration Pays Big Dividends for SAP/ERP Customers Quantified savings for customers transitioning from competitive databases

Transcription

1 Microsoft SQL Server Migration Pays Big Dividends for SAP/ERP Customers Quantified savings for customers transitioning from competitive databases Migrating an SAP/ERP environment to Microsoft SQL Server can reduce unplanned downtime by over 20%, cut IT labor costs by nearly 25%, and cut ongoing software support costs up to 85%. Migration from competitive databases is made easy by tools, best practices, and certified SAP migration specialists. Payback is as short as nine months, with ongoing annual savings of 30%-37% possible. Authored by: Wipro Technologies (PSA) February 2008 Copyright Wipro Ltd All rights reserved. No portion of this study can be used or reproduced without permission of the author. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.

2 Table of Contents Executive Summary 1 Introduction 3 Data Sources and Methodology 4 The Bottom Line: Strong Payback from Migrating SAP/ERP Environments to Microsoft SQL Server 5 Lowering Ongoing Costs 7 IT Labor Cost Reductions 7 Reduction in Downtime 8 Lower Salary Costs 8 Less Complex Administration 8 Cost Savings in Ongoing Software Support 9 Reduction in Ongoing Hardware Costs 9 The Importance of Infrastructure Optimization 10 Migrating from IBM DB2 on AIX to Microsoft SQL Server 13 Ongoing Costs 13 Migration Costs 14 Optimizing the Migration to Microsoft SQL Server 14 Project Outcomes 15 Low Risk 15 Predictable and Reasonable Cost 15 More Reliable Platforms 15 Calculating Migration Costs 15 Migration Best Practices 16 Summary 17 Appendix A Data Sources and Methodology 18 Appendix B Typical Migration Project Plan 20 Appendix C Features of Microsoft SQL Server Appendix D About Wipro 24

3 Executive Summary In this study, Wipro consultants collected data from 68 companies running SAP on a variety of hardware and database platforms. We additionally performed in-depth analysis on five companies who had migrated from a competitive platform to Microsoft SQL Server. ERP Migration*: Summary of Benefits Medium SAP Implementation Large SAP Implementation Total Benefits (5 years) $1,140,345 $11,956,652 Total Migration Costs $298,160 $1,882,445 Net Benefits $842,185 $10,074,206 Net Present Value of Benefits $574,030 $7,343,298 Payback Period (months) 15 9 Internal Rate of Return (IRR) 74% 137% * Migration from an SAP system on an Oracle database running on a Unix platform to Microsoft SQL Server running on Windows Server Attributes of Medium and Large implementations are profiled in Figure 4 later in the paper Figure 1. Summary of benefits. As shown in Figure 1, the case for migration is compelling. Migration from the Oracle database running on a UNIX-based platform to Microsoft SQL Server can yield an Internal Rate of Return 1 (IRR) of 74% to 137% 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. IT Administration Labor IT Incident Management Labor Software Support Infrastructure Optimization Best Practices Impact 20-25% savings 20-25% savings 61-86% savings Downtime reduction of 20% or more Savings Driver Fewer personnel required to manage Microsoft SQL Server platform Bundled monitoring and fault tolerance tools lower unplanned downtime Differences in database licensing approaches and bundling of database tools lowers ongoing support costs Benefits apply to all platforms, but implementation is easier and less expensive with Microsoft SQL Server Figure 2. Major drivers of cost savings. 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's IRR, the more desirable it is to undertake the project. A 10% discount rate was used in all NPV calculations. page 1 of 24

4 Migration Cost vs. Five Year Savings (NPV) Medium Scenario Large Scenario $1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 $298,160 $864,561 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 $1,882,445 $9,065,023 Migration Costs 5 year NPV benefits Figure 3. Investing in a migration to Microsoft SQL Server yields large returns. Implementing Infrastructure Optimization (IO) 2 best practices of database mirroring, clustering, and rules-based 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 2005 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 completely successful, both operationally and financially. Migration costs are typically repaid within 10 to 15 months. In summary, migration of an SAP/ERP landscape 3 to Microsoft SQL Server provides a rapid return on investment and persuasive ongoing cost savings. Organizations will receive the greatest savings from reductions in IT labor costs and ongoing software support fees. Savings are not the only motivation to migrate. The resulting landscape is more reliable and scalable, with less unplanned downtime. Implementing Infrastructure Optimization best practices can provide even greater returns. Our recommendations are: When an SAP/ERP landscape is 18 to 24 months out from a major inflection point in the system lifecycle (such as a hardware refresh), begin researching migration to the Microsoft SQL Server platform. Visiting reference sites is an easy way to gain knowledge and confirm suitability. Call on certified SAP migration specialists as well as Microsoft and hardware vendor support to ensure a cost-effective and low-risk migration. Use the migration best practices described in this paper to ensure smooth implementation. Investigate Infrastructure Optimization best practices for further lowering of costs. 2 Microsoft s Infrastructure Optimization Initiative is a series of models for improving 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 landscape includes the entire system architecture of an SAP implementation, including hardware platform, operating system, database, storage, networking, etc. It is typically a three-tier architecture. page 2 of 24

5 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 firmly in-place and under control. The task now turns to 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 migrating their SAP/ERP landscape from a competitive database and platform to Microsoft SQL Server 2005 and Windows Server 2003 enables them to meet all their optimization goals. To understand this movement in more detail, Wipro conducted an extensive survey of SAP/ERP customers, probing costs, reliability, and migration experiences. The results provide a convincing story of the benefits of migrating an SAP/ERP landscape to Microsoft SQL Server software running on industry-standard hardware. This paper provides a framework for estimating SQL Server migration ROI along with baseline metrics for typical organizations: Migration costs are paid back within months, Internal Rate of Return (IRR) ranging from 74%-137% Reduction in annual database and tools support costs of up to $1.1 million are possible for large installations Unplanned downtime is reduced an average of 23% Ongoing IT labor savings total over 20% annually page 3 of 24

6 Data Sources and Methodology The data used in this paper was obtained via a survey of 68 companies running SAP/ERP on a variety of landscapes. We backed up this quantitative information with qualitative information from outside Subject Matter Experts (SMEs), prior Wipro research 4,5 and publicly available case studies. To understand migration costs and best practices in detail, we performed comprehensive, 1.5 hour qualitative and quantitative interviews with companies who had migrated to Microsoft SQL Server within the last 12 months. Scenarios Company Size Medium $1.4 billion revenue, 3,000 employees Large $16 billion revenue, 40,000 employees Number of SAP /ERP modules (Financials, Human Capital Management, etc.) Database Size (GB) of SAP/ERP production instance Dialog Steps per Day (millions of transactions) Concurrent Users Named Users 299 5,800 Characteristics 99.5% SLA, few and simple interfaces 99.99% SLA, larger number and more complex interfaces Figure 4. Characteristics of modeled scenarios. As with any complex system, there are many factors that influence the cost of an SAP/ERP landscape, including industry, geography, size of company, and so forth. There is no one size fits all model. In response, we took the approach of creating a stalking horse, by which we mean a starting point to explore the benefits, costs, risks and paybacks of transitioning an SAP/ERP environments to Microsoft SQL Server. In fact, we created two stalking horses one dubbed the Medium scenario, the other the Large scenario. The key attributes of these scenarios are shown in Figure 4. These are roughly based on the 20th and 80th percentiles in our survey data. These scenarios should be used as a suggested starting point for looking at Microsoft SQL Server migration in your organization, and should be modified to reflect your particular situation. 4 Moving ERP to SQL Server Yields Substantial Savings, Wipro PSA Practice, TCO Benefits of SQL Server, Wipro PSA Practice, 2004 page 4 of 24

7 The Bottom Line: Strong Payback from Migrating SAP/ERP Environments to Microsoft SQL Server Our research revealed a compelling case for migrating to Microsoft SQL Server for both the Medium and Large scenarios, with total costs and benefits shown in Figure 5. Migration from the Oracle database running on a UNIX-based platform to Microsoft SQL Server can yield a internal rate of return of 74% to 137% while simultaneously lowering unplanned downtime and increasing system performance. $1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 $(100,000) Migration Cost vs. Five Year Savings (NPV) Medium Scenario Large Scenario $298,160 $185,748 $112,411 Migration Cost* $864,561 $593,390 $265,911 $5,259 5 Year NPV of Savings $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 $(2,000,000) $1,882,445 $1,255,304 $627,142 Migration Cost* $9,065,023 $4,540,900 $4,475,384 $48,740 5 Year NPV of Savings * Assumes migration timed to coincide with server hardware refresh cycle. Lower priced Windows hardware creates a net savings in hardware expenditures; these are counted as a "hardware cost avoidance" benefit in the NPV. Labor Software Hardware Figure 5. Migration benefits far outweigh costs. Appendix A provides more detail on the data, model scenario attributes, and methodologies used in this paper. Figure 6 shows a detailed breakdown of the costs savings by category, and the drivers behind the savings. Some highlights to note: Labor costs are both the largest expense, and the greatest area of cost savings. It is clear that in order to reduce your ongoing costs to any great extent, you have to reduce your IT labor expense. Database and tool software are the next biggest cost, especially in the Large scenario. The savings percentages are very significant here. Database tool functionality (including monitoring, security, tuning and clustering) are included with Microsoft SQL Server and Windows Server 2003, and thus incur no additional cost. The same tools from Oracle can add costs of between $14,000 and $491,000. Total annual savings are 30% to 37%. The larger the system, the greater the proportion of savings annual savings of over $228,000 and $2,400,000 respectively. Every case is different, but we have found that an SAP/ERP landscape running Microsoft SQL Server on Windows generally has a 10-25% lower TCO than other platforms. While the less expensive hardware and software are part of the reason, the real savings comes from reduction in IT labor costs Sridhar Srinivasan, VP Microsoft Business Unit, Wipro Technologies 6 TCO = Total Cost of Ownership page 5 of 24

8 Medium Scenario Large Scenario Microsoft SQL Server Oracle/ Unix Savings % Savings Microsoft SQL Server Oracle/ Unix Savings % Savings Cost Driver Incident Mgt Labor 213, ,167 67,595 24% 1,522,552 2,153, ,390 29% Lower downtime, better diagnosis tools Admin Labor 198, ,007 64,259 24% 1,636,117 2,014, ,703 19% Less complex to manage, especially capacity management, performance tuning, and monitoring. Integrated toolset reduces scripting etc. Database Support Test/Dev Lab Labor Database Tools Support 30,113 70,464 40,351 57% 180, , ,374 77% No extra charge for multi-core processors; lower base cost 64,171 83,115 18,944 23% 491, , ,125 23% Less complex to manage, especially capacity management, performance tuning, and monitoring. Integrated toolset reduces scripting etc. 0 14,520 14, % 0 491, , % Tools come bundled with Microsoft SQL Server, but have to be purchased separately on Oracle Training 18,914 24,651 5,737 23% 139, ,967 42,660 23% Less training required; courses generally less expensive Base Platform (HW and OS) 17,876 34,540 16,663 48% 40, ,275 96,039 70% OS support costs significantly less for Windows Server Total 543, , ,069 30% 4,010,662 6,401,992 2,391,330 37% Figure 6. Annual costs savings are significant across all categories. In the following sections, we ll explore these results in more detail: Lowered Ongoing Costs examines annual operating cost savings available when moving to a Microsoft SQL Server landscape from an Oracle/UNIX landscape. Infrastructure Optimization Savings explores the benefits of using Infrastructure Optimization Best Practices (regardless of landscape). It also explores the cost and difficulty of implementing the Best Practices on different landscapes. Migration Best Practices summarizes the optimal approach to ensure a low-risk, cost-effective migration to Microsoft SQL Server. page 6 of 24

9 Lowering Ongoing Costs Most companies already have their SAP/ERP system up and running; what matters most to them is reducing ongoing costs. In this section we examine the differences in ongoing cost between a Microsoft SQL Server/Windows landscape and an Oracle/UNIX landscape. (Because SAP/ERP licensing and storage costs are assumed to be the same across both landscapes, we exclude them from the analysis.) Figure 7 shows the ongoing cost savings by category. We ll explore the sources of the savings in the following sections. Medium Scenario Total Ongoing Costs Large Scenario $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 $7,000,000 $771,464 30% $6,000,000 lower costs $651,940 37% $5,000,000 lower costs $543,394 $495,405 $4,000,000 $3,000,000 $4,010,662 $3,789,575 $2,000,000 $1,000,000 $1,385,610 $115,637 $0 $205,015 $45,490 $2,499 $3,887 $16,072 $28,929 SQL Server/ Windows Oracle/Unix IT Labor Software SQL Server/ Windows Hardware $6,401,992 $4,987,453 Oracle/Unix Figure 7. IT labor reduction is the largest area of savings, followed by software. IT Labor Cost Reductions Labor cost savings ranged from 20-25%, and accounted for the largest area of savings. These figures correspond to what we heard from migration customers who had experience in both environments. Other studies have found even higher savings. 7 We hypothesize that these lower labor costs are driven by: Reduction in downtime Lower salary costs Less complex administration 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% or more are possible in a Microsoft SQL Server landscape. Microsoft s licensing approach lowers software support costs by up to 86%. Unplanned downtime is reduced by over 20% in a Microsoft SQL Server landscape. 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 Microsoft SQL Server and Oracle Database: A Comparative Study on Total Cost of Administration, Alinean, Inc. May page 7 of 24

10 The following paragraphs explore these factors in more detail. Reduction in Downtime Planned downtime is a scheduled outage of the SAP/ERP landscape in order to perform maintenance, install support packages, patches, etc. Unplanned downtime is a system failure of some sort whether network, server, hardware, software, database, security breach, etc. Downtime was significantly lower with Microsoft 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% drop directly impacts the level of Incident Management labor. Though not included in our 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 are not uncommon. 8 A reduction of eight hours in unplanned downtime would reduce annual productivity losses by $320,000. (Of course, you should use lost productivity estimates specific to your company). Hours per year SQL Svr/ Win Unplanned Downtime Medium Figure 8. Unplanned downtime is reduced over 20% in the Microsoft SQL environment Oracle/ Unix Planned SQL Svr/ Win Oracle/ Unix Large/Complex Lower Salary Costs Beyond the IT labor hours saved, additional savings come from the fact that Microsoft 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. $120,000 $100,000 $80,000 Average DBA Salary* (including 28% burden rate) Less Complex Administration Earlier studies 9 have shown that a Microsoft SQL Server landscape 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 Microsoft SQL Server that can be found under one hood vs. requiring command line interfaces, CRON jobs, shell-scripting or add-on products. $60,000 $40,000 $20,000 $0 source: Payscale.com Microsoft SQL Server * DBAs with five years experience Figure 9. Salaries are lower for Microsoft DBAs vs. Oracle DBAs. Oracle database 8 Disaster recovery spending How much is enough? Tom Pisello, CEO and founder of Alinean Jan TCO Benefits of SQL Server, Wipro PSA Practice, 2004 page 8 of 24

11 Cost Savings in Ongoing Software Support As shown in Figure 10, ongoing software support charges were significantly lower for Microsoft SQL Server 61% lower in the Medium scenario and 86% in the Large scenario. Medium Scenario Ongoing Software Support Costs Large Scenario $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $- 61% lower costs $30,113 $15,377 Microsoft SQL Server $14,520 $70,464 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $491,040 $787,224 $600,000 $30,653 $400,000 $200,000 85% lower costs $- $180,850 $107,346 $24,165 Oracle/Unix Microsoft SQL Server Oracle/Unix Database Tools Database Operating System Figure 10. Differentials in software licensing costs are especially pronounced in the Large scenario. Operating system support costs are lower in the Microsoft SQL Server environment. But the biggest cost differentials are in the database and database tools support and maintenance costs. The reason stems from the fact that annual database support costs are based on a percentage (usually 20-25%) of the initial license costs. Thus, differences in initial database licensing costs reverberate through the years as differences in support costs. The side bar entitled Navigating the Complexities of Database Licensing provides an introduction to this topic. The base price Microsoft SQL Server licensing is less expensive ($25,000 vs. $40,000 per processor for an Enterprise Edition license). But the real cost differences come 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 Oracle s per-core processor charges make their presence felt. A fault-tolerant system with standby servers would see an even bigger differential. Reduction in Ongoing Hardware Costs 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% of total ongoing costs, server support contracts are a relatively minor contributor. Nonetheless, Windows-based hardware platforms save about $13,000/year in the Large scenario. page 9 of 24

12 Navigating the Complexities of Database Licensing Comparing apples to apples in 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, advanced security? These features are bundled with Microsoft 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 highavailability and disaster recovery. Oracle requires full licenses to be purchased on these servers; with Microsoft SQL Server there is no charge. Failover Server License: Do you need a separate license for the failover system in your cluster? Not with Microsoft SQL Server, but you do with Oracle if it is used on more than 10 different days a year. Multi-core Multiplier: These days, many servers ship with dual-, quad- and octi-core processors (i.e. multiple CPUs 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 charged as.5*4=2 processors. Microsoft SQL Server treats any multi-core devices as a single processor. The Oracle multiplier applies to all the charges listed above tools, standby servers, testing labs, etc. 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% 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 s website directly. The Importance of Infrastructure Optimization How an organization manages its SAP/ERP system is as important as the choice of hardware platform, operating system or database. To help organizations develop a roadmap for improving operations, Microsoft created the Infrastructure Optimization initiative. The IO initiative consists of a series of models based on best practices that reduce cost or improve business performance 10. We can typically reduce our IT labor costs by 20% or more simply by implementing IO best practices. We find that reliability goes up as labor costs go down. Sridhar Srinivasan, VP Microsoft Business Unit, Wipro Technologies While the IO initiative is beyond the scope of this paper, the research for this paper uncovered patterns in top performing organizations. These patterns have been used to formulate a set of best practices for managing an SAP/ERP landscape. Best practices are vendor-agnostic and apply equally to UNIX and Windows, Oracle databases and Microsoft SQL Server. In SAP/ERP environments, best practices reduce costs or unplanned downtime and correspond to recommended system architectures or management processes. This research identified three best practices that were used by the best performing organizations to reduce unplanned downtime. 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 Key Findings: Infrastructure Optimization Infrastructure Optimization Best Practices of database mirroring, server clustering, and rule-based monitoring can reduce unplanned downtime in an SAP landscape. The Best Practices are more easily and less expensively implemented in a Microsoft SQL Server environment. 10 To learn more about the important subject of Infrastructure Optimization, see page 10 of 24

13 Figure 11 compares the use of the three best practices against unplanned downtime. Interpreting Figure 11 should be done cautiously. The metrics shown are simple correlations based on a single variable in a complex system. The metrics should be used as a source of directional information and not 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 in this research. The takeaway from the figure is that better performing organizations use these best practices and others to reduce unplanned downtime. Best Practice Annual Unplanned Downtime Hours Yes Database Mirroring (n=68) % Clustering (n=68) % No % Improvement by adopting practice *Rule based System Monitoring (n=26) % * Rule based system monitoring is benchmarked against organizations that also monitor but use manual remediation. Rule based monitoring is based on a subset (n=26) of the 68 organization sample. Figure 11. Implementation of best practices can reduce unplanned downtime. All SAP/ERP landscapes will benefit equally from these best practices and, in fact, the sample used in Figure 11 represents the full sample of 68 organizations 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 of the Microsoft SQL Server environment 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, reducing integration headaches. In the Oracle/Unix environment the solution would require products from multiple vendors. In most cases, the mixed vendor approach increases costs and makes it more difficult to standardize on a single vendor architecture across the organization. Best Practice Intel or AMD/ Windows/SQL Cost Sun/Solaris/ Oracle Cost Comment Database Replication/ Mirroring Included with Microsoft SQL Server license $0 Included with Oracle 10g $0 Available at no cost from both vendors. Clustering Included with Windows Server 2003 EE and SQL Server 2005 EE $0 Sun Cluster / Oracle Real Application Clusters $26,000/ Processor $20,000/Processor (Oracle) $6,000/Processor (Sun) Rule-based System Monitoring System Center Configuration Manager 2007* $1307 for SCCM2007 $426/Server $0/SQL Agent HP OpenView for UNIX, Management Server for Solaris, and HP Oracle Software $37,978 for HP OV $427/Server Agent $1,419/Oracle Agent * System Center Configuration Manager 2007 is a renamed and extended version of the former Microsoft Operations Manager (MOM). Figure 12. It is easier and less costly to implement SAP best practices in a Microsoft SQL Server landscape. page 11 of 24

14 Microsoft SQL Server 2005 contains several significant enhancements to support Infrastructure Optimization, as outline in the paragraphs below. (See Appendix C for a full description of Microsoft SQL Server 2005 improvements). Database Mirroring. Database replication has been enhanced in Microsoft SQL Server 2005 and is important to SAP/ERP because of its ability to create an on-line spare database in the event that the primary database or database server fails. SQL Server 2005 database mirroring streams transaction logs to a mirror server and a backup database. If the primary database should fail, the system will automatically reroute connections to the backup database. Failover time is measured in seconds. Clustering. Microsoft Windows Server and SQL Server 2005 also have a clustering solution built into the core products 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 2005, support for failover clustering has been extended to SQL Server Analysis Services, Notification Services, and SQL Server replication. This solution requires certified hardware, and failover is transparent to users and applications since IP addresses are redirected away from failed equipment. Rules-Based Monitoring. The third best practice, rule-based system monitoring, is made available in Microsoft environments through System Center Configuration Manager 2007 (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 in that it also ensures the health of database mirroring used in the first 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 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 Microsoft SQL Server, organizations should include the costs and benefits of these best practices in the business case. ROI can change significantly if these best practices are made part of the equation. page 12 of 24

15 Migrating from IBM DB2 on AIX to Microsoft SQL Server This paper has primarily focused on comparing Oracle to Microsoft SQL server, since most of the survey respondents were using one of these platforms. However, ten of the respondents were using IBM DB2, and we used that data to assess the value of a Microsoft SQL Server migration for this scenario. As with the Oracle/Unix analysis, this should be considered a starting point for your own analysis, not a definitive model. SQL/Windows DB2/UNIX Database Microsoft SQL Server 2005 EE IBM DB2 9.5 EE Operating System Windows Server 2003 EE IBM AIX 5L 5.3 Hardware IBM System x3950/x3650 IBM System p5 Figure 13. Products used in scenario evaluation (both Medium and Large). Medium Large Total Migration Costs $269,410 $2,167,494 Total Benefits (5-yr) $1,087,234 $12,122,042 Net Benefits $817,824 $9,954,549 Net Present Value $577,458 $7,183,642 Payback Period (Months) IRR 84% 118% Figure 14. Summary of benefits. As was the case with the Oracle/Unix scenarios, our DB2/UNIX scenarios showed compelling reasons for organizations to migrate to Microsoft SQL Server instead of refreshing their UNIX-based hardware. Payback is 10 to 14 months, with an IRR of 84% to 118%, as shown in Figure 14. The two biggest differences between the DB2 and Oracle cases were: DB2 licensing costs and hence ongoing support costs are even more expensive IBM POWER5-based hardware is at least 50% more expensive than hardware in the other scenarios, providing greater cost avoidance potential during migration Ongoing Costs Software support and IT labor savings were the major sources of savings from migration, just as they were in Oracle-based environments. IBM s DB2 licensing is based primarily on the total number of cores. It also is adjusted using a PVU (processor value unit) factor, which tends to be higher for faster processor cores. Totaled DB2 pricing is 124% higher in the medium sized organization and 162% higher in the large organization vs. Microsoft SQL Server. It was also more expensive that 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. Continued on next page page 13 of 24

16 Continued from previous page Migrating from IBM DB2 on AIX to Microsoft SQL Server AIX initial license costs are modest; however, ongoing maintenance and support costs are high. AIX licensing is based on the number of processors (Windows is based on number of servers) compounding the OS cost differences for multiprocessor servers. For the Medium scenario, AIX annual costs are 13% more expensive, but in the large organization scenario, AIX costs are over twice as expensive. Annual hardware maintenance and support costs (and cost savings) were not significant. Total IT labor savings from migrating to Microsoft SQL Server from DB2 is 22% for both Medium and Large scenarios. The 22% savings is slightly lower than the savings moving from Oracle to SQL server because our survey indicated that DBA s were a little more efficient at managing the DB2 environment (but not nearly as cost-effective as managing the SQL/ Windows environment). Migration Costs Costs to migrate to the SQL Server/Windows platform from the DB2/UNIX platform were essentially the same as migrating from the Oracle/UNIX platform. Cost to purchase Intel or AMD processor based hardware was significantly less (50%+ savings) than purchasing the IBM POWER5-based hardware with roughly equivalent performance. Optimizing the Migration to Microsoft SQL Server Given the significant savings in ongoing costs and lesser downtime between Microsoft SQL Server vs. Oracle/UNIX landscape, it is not surprising that companies are investigating the possibility of migration when they reach a system lifecycle inflection point. To learn more about what contributes to a successful migration, we performed in-depth interviews with five companies who had migrated their SAP/ERP implementation to Microsoft SQL Server in the last 12 months. We also talked with SAP migration experts who have assisted in scores of migrations. The reasons our interviewees had for changing platforms went beyond just lowering platform costs and included: 1. Supporting a company-wide policy on centralization and standardization of hardware and software platforms 2. A desire to leverage the vast Microsoft partner ecosystem 3. The deep labor pool of available Microsoft expertise already in house, and also in their local market. This was especially important to interviewees in remote locations 4. An inability to meet SLAs on their existing SAP/ERP landscape Key Findings: Migration SAP Landscape Migration is well understood, low-risk, and well supported by tools, vendors, and certified SAP migration specialists. Migration Best Practices ensure an optimal migration, with minimal risk and at a lower cost. Migration IRR is 74% to 137% with a payback period of 10 to 15 months. Microsoft SQL Server on Windows offers strategic benefits such as standardization, rich partner ecosystem, and deep labor pools. page 14 of 24

17 Project Outcomes Interviewees told us three major concerns they d had at the start of the migration project: risk, cost, and reliability. Here s how these concerns played out over the course of their projects: Low Risk We learned from interviewees that with proper planning, risk is very low. Without exception, projects ran to schedule, with virtually no problems. Most companies said there was nothing they would do differently next time. One interviewee expressed absolute amazement at how smoothly the project had run. SAP/ERP database migration is a well-understood technology area 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 project s success. The actual migration itself was completed over a two to three day weekend. The migrated systems ran well from day one, with only minor tweaks needed afterwards. Predictable and Reasonable Cost Migration labor costs are predictable and reasonable. Support was strong from both hardware vendors and Microsoft engineers throughout the migration, reducing the amount of internal labor and expertise required. Typical migrations averaged days of labor, typically spread over six to twelve months. Internal labor accounted for 60 to 80% of the total, with the rest coming from external SAP migration specialists, hardware vendors, and Microsoft. More Reliable Platforms In all cases, the new platform was more reliable and higher performing than the one it replaced, often by a significant margin. Most interviewees used reference accounts to assure themselves of its capabilities ahead of time. One performed a Proof of Concept test with the help of its hardware vendor and Microsoft. Appendix B contains additional detailed information on typical project schedules, detailed tasks, and project roles in an SAP/ERP migration project. Calculating Migration Costs There are two major cost elements in a migration the labor costs (internal and external), and the licensing cost of Microsoft SQL Server. The SAP/ERP license transfers unchanged to the new landscape. We assume that the migration occurs at a system lifecycle inflection point (as it did for all our interviewees), so a hardware refresh will occur regardless. We thus factored in only the net difference in hardware costs between the two systems as part of the migration cost (or cost-avoidance). page 15 of 24

18 Figure 15 shows a typical migration cost profile for both the Medium and Large scenarios. Notice that labor costs are proportionately higher in the Large scenario; these increases are driven by: Migration Costs from Unix/Oracle to Windows and Microsoft SQL Server $2,500,000 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. $2,000,000 $1,500,000 $1,000,000 $500,000 $0 $298,160 Medium $112,411 $13,755 $56,993 $115,000 $1,882,445 $627,142 $103,380 $626,924 $525,000 Large Software Costs Training Internal Labor External Labor Migration Best Practices Figure 15. Migration costs are reasonable for both Medium and Complex scenarios. We asked interviewees and SMEs what they would recommend as best practices during a migration to Microsoft SQL Server. Their responses were consistent: 1. Use the well-honed SAP/ERP migration tools and skills from external consultants. Bring in specialist expertise in SAP/ERP migration and database architecture. 2. Ensure a close working relationship among all vendors, consultants and internal teams. 3. Strong vendor support can reduce total labor costs. 4. Bring in business users up front, and have strong communications throughout to assuage worries. 5. Double-check sizing and growth assumptions early in the process. We ve found that a close working relationship among vendors, consultants, and internal staff can reduce total labor costs and increase project success. Sridhar Srinivasan, VP Microsoft Business Unit, Wipro Technologies 6. Consider migrating a less critical SAP/ERP system first, to build internal IT understanding, and ease user concerns. Follow-on 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 should they be needed. A two- or three-day weekend is enough time do the migration and go live for databases under six terabytes. 8. Since six terabytes is a practical limitation to the amount of data that can be migrated over a three-day downtime window, 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 it is a more complex, incremental process. page 16 of 24

19 Summary Migration of an SAP/ERP landscape to Microsoft SQL Server provides attractive ROI and compelling ongoing cost savings. Look for the greatest savings from reductions in IT labor costs and ongoing software support charges. The resulting landscape is more reliable and scalable, with less unplanned downtime. Implementing Infrastructure Optimization best practices can further reduce unplanned downtime and provide even greater returns. Recommended Next Steps: When an SAP/ERP landscape is 18 to 24 months out from a major inflection point in the system lifecycle, begin researching migration to the Microsoft SQL Server platform. Visiting reference sites is an easy way to gain knowledge and confidence in the results. Call on certified SAP migration specialists, as well as Microsoft and hardware vendor support to ensure a cost-effective, low-risk migration. Use the Migration best practices described in this paper to ensure success. Investigate Infrastructure Optimization best practices, analyzing which can provide the highest level of payback for your organization. page 17 of 24

20 Appendix A. Data Sources and Methodology The data used in this paper was obtained via a survey of 68 companies running SAP/ERP on a variety of landscapes, using the screening parameters shown in Figure 16. Size ranged from $600 million revenue with 1,500 employees to $45 billion revenue with 100,000 employees. Over 90% of the companies were US-based. Screening Criteria Database Size SAP steps per day SAP architecture SAP Modules Database Industry Range 500GB-2000GB 1-6 million 3 or 4 tier One or more of Financials, Human Capital Management, Operations, and Corporate Services Oracle, DB2, Microsoft SQL Server Manufacturing industry for 50% or more of surveyed companies Figure 16. Screening criteria for survey respondents. In interviews lasting over an hour, we collected data on hardware, software and support services, configurations and costs, as well as various categories of IT labor, downtime, SLA goals and more. The surveys were performed during December 2007 and January We backed up the quantitative information from the telephone surveys with qualitative information from outside Subject Matter Experts (SMEs), prior Wipro research 11, 12, and publically available case studies. Two divisions of Wipro have extensive experience in SAP/ERP and in Microsoft SQL Server, and we probed their experience as well. To understand migration costs and best practices, we performed detailed, 1.5 hour qualitative and quantitative interviews specifically to learn more about the migration process and costs. We talked with five project leaders (and often additional members of their team) that had migrated their company s SAP/ERP landscape to Microsoft SQL Server within the last 12 months. This information, along with input from SAP migration SMEs, was used to develop the section on migration. 11 Moving ERP to SQL Server Yields Substantial Savings, Wipro PSA Practice, TCO Benefits of SQL Server, Wipro PSA Practice, 2004 page 18 of 24

21 To reduce differences caused by varying business designs and processes, we pulled a subset of 38 consisting only of Manufacturing companies, 16 of which were running on Microsoft Windows with Microsoft SQL Server; another 16 were running an Oracle database on a UNIX-based system, with the remaining six running other databases. The core of the analysis in this paper is focused on these Oracle database and Microsoft SQL Server Manufacturing industry respondents, though data from the other interviews was used to deepen and further illuminate the findings. Figure 17 shows a detailed breakdown of the surveyed companies, broken down by industry and database. Composition of Surveyed Organizations (n=68) Other DB 6 Other DB 4 Microsoft SQL 16 Oracle 16 Microsoft SQL 9 Oracle 17 Manufacturing (N=38) Non-manufacturing (N=30) Figure 17. Respondents broken down by industry and database. The major cost elements in each category are shown in Figure 18. Category Hardware Software IT Labor Description Server maintenance and support. (Storage is excluded, since it is assumed to be the same regardless of platform.) Support and maintenance costs for operating system, database and database tools (tuning, monitoring, and security, for medium scenario, with addition of clustering tools for Large scenario.) Incident Management, Administration, Labs, Training. Figure 18. Cost Elements included in calculations. page 19 of 24

22 Appendix B. Typical Migration Project Plan 13 From the SAP migration experts we talked to, we received detailed information on typical project structures, tasks, roles, etc. We include it here as a starting point for understanding the migration process. If you are considering a migration to Microsoft SQL Server, we strongly recommend contacting Microsoft and your hardware vendor they have deep expertise in this area, and provide excellent support. Typical project flow Planning: 10-15% of total effort Infrastructure Preparation: 12-20% Training: 10-12% Migration: 45-55% Post-migration Followup: 10-15% Typical Migration Timeline Preparation Installation of - DB Software - SAP Software Export/Import HW Partner - Sizing - HW Order Migration Partner - Staffing - Project planning - SAP contracts 1. Test Migration 2. Test Migration Test Phase Export / Import Switch over to new landscape Technical Tests - basis functionality, Performance - Printing, 3rd party tools Application Tests - Key user test - Data consistency Training of the SAP Basis team Final Migration Support during first days Optimization Support Timeline (typically 6 to 18 months) 13 Information in this section was sourced primarily from Microsoft s SAP expertise centers page 20 of 24

23 Detailed Project Tasks Pre-requisites Migration planning Setup and validation of project plan Selection of migration partner Project staffing Infrastructure Preparation HW Sizing Get input parameters from the business Get Quicksizer results and validate Hardware vendor decision Confirm decision about HW to configure HW preparation Ordering of HW Configuration of HW, including dependent HW (such as network, SAN) Prepare the SAN Software ordering and validation Obtaining installation kits (SAP for Windows / SQL Server) Check availability of Backup/Restore agent for SQL Server Software installation OS and patches Installation on Server (Windows server SP1) SQL Server 2005 installation Detailed documentation and procedures (including runtime evaluation) Test Phase and Validation Application functionality (Key user testing) SAP Basis functionality Stress testing Evaluation and Adaption of interfaces Performance tuning Backup / Restore test Evaluate Backup / Restore time Final Migration (DEV and PRD system) Migration preparations Export of the source DB using R3load Transfer data from source to target Import data into SQL Server using R3load Migration post activities Homogeneous system copy to QAS Backup of all SAP systems Changing of all interfaces Adaption of printer configuration SAP installation and post-activities Documentation of configuration and installation of Windows Server 2003+Service Pack 2, patches and SQL Server 2005 Preparation and Testing of administration tasks Installation of 3rd party tools, if any Backup test of Windows Server Develop Backup / Restore concept for SQL Server database Testing of Backup / Restore concept Migration Migration preparation Order of SAP migration service Change contracts with SAP Evaluation of interfaces Checking of printer configuration Analysis of the source system Scheduling SAP Going Live session Test Migration (DEV and PRD system) Migration preparations Export of the source DB using R3load Transfer data from source to target Import data into SQL Server using R3load Migration post activities Homogeneous system copy to QAS Adaption of all RFC connections Training Database Training Oracle / SQL Server Delta Workshop Administration of SQL Server in an SAP environment OS courses Security and patch management Post migration activities Going Live support Standby support during first week of Live production Remote support Performance tuning Analysis of system performance during daily workload Tuning of slow SQL statements page 21 of 24