This document discusses how SAP Business Suite powered by SAP HANA can help reduce total cost of ownership (TCO). It argues that initial hardware costs are a small portion of overall TCO, and that SAP HANA provides simplification benefits and cost savings in areas like data management software, footprint, testing/development systems, and operations that outweigh increased hardware expenses. Examples are given of customers achieving large TCO reductions, simplified landscapes, and data footprint reductions of up to 83% by deploying SAP HANA.

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SAP Business Suite powered by SAP HANA
Reduce Total Cost of Ownership with
SAP® Business Suite powered by SAP HANA®
Table of Contents
2 Look Beyond Initial Expenditures to the
Total Cost of Ownership
3 Database Hardware Costs:
A Small Portion of TCO
4 SAP HANA Platform Simplification
Drivers – Revealing Significant Cost
Savings
6 The Downward Trend of Hardware Costs
for Running SAP HANA
7 SAP HANA As an Open Hardware
Platform
8 Virtualizing SAP Business Suite
powered by SAP HANA
9 Lowering Costs for Nonproduction
Systems
10 Cost Benefits of New Multitenancy
Functionality in SAP HANA
11 Consolidate Servers and Reduce
Costs with Codeployment

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Look Beyond Initial Expenditures
to the Total Cost of Ownership
Making the case for investing in new technology
innovations isn’t always easy, and maintaining
the status quo can deceivingly seem like a less-
expensive option. It’s common to focus on the
acquisition costs of new technology, especially in
times of economic uncertainty and declining IT
resources. But this approach fails to capture the
benefits and cost savings of investments in
innovations, and it is often skewed by up-front
expenses that are not repeatedly incurred once
software is up and running.
As of November 2014, more than 1,700 customers
have chosen SAP Business Suite powered by
SAP HANAto reap the rewards of running their
enterprise in real time while at the same time
reducing TCO. With the new open hardware
model, enhanced functionality,and relaxed
certification requirements, customers can run
their SAP Business Suite software on SAP HANA
at cost levels comparable to running it on
commodity relational databases available on
the market today.
“By unifying our software landscape on SAP HANA, we not
only achieved a lower TCO but have also paved the way for
future innovation.”
Christian Mühltaler, CIO, Kardinal Schwarzenberg’sches Krankenhaus Betriebsgesellschaft m.b.H.
In a climate of lower IT budgets, it’s more important than ever to understand the
true total cost of ownership (TCO) of technology innovations. By moving to SAP®
Business Suite powered by SAP HANA®, you can drive your entire enterprise in real
time and simulate, plan, execute, predict, and analyze almost instantly along
business-critical end-to-end processes – and at the same time reduce your
technology TCO.

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Database Hardware Costs:
A Small Portion of TCO
CIOs and IT leaders are under pressure to deliver
real-time insights and high application performance
while controlling spending. But an overemphasis
on hardware acquisition expenses can lead to
misperceptions about overall costs. For example,
looking only at the initial costs of in-memory
computing focuses on the relatively higher price
of memory storage compared to traditional spinning
disks (though, in fact, the cost of memory is
trending downward).
A more thorough analysis shows that database
hardware costs, while a significant part of initial
expenses, account for a rather smaller portion of
the total cost of running SAP Business Suite, in
some cases as low as 5%, based on SAP customer
experience. Other elements, such as data man-
agement software, data footprint, accelerators,
and testing, quality, and development systems,
have a much bigger impact on TCO. In fact, the
savings that SAP HANA can bring to these other
elements outweighs any increases in hardware
costs.
Running SAP Business Suite on SAP HANA can
dramatically lower TCO, compared to running it
on a legacy database. Simplified architectures
allow transactions and analytics to run together
on a single in-memory platform, shrinking your
data footprint and reducing data management
software, hardware, and labor costs. Support for
a multitenant database, virtualization, and co-
deployment can help you increase your hardware
utilization and simplify the integration of
SAP HANA into your data center, further
reducing TCO. For example, Hidrovias do
Brasil S.A. achieved a 70% reduction in TCO.
“The benefits we are achieving are great – not the least of
which is a drastic reduction in IT costs.”
Dr. Rogerio Dutra, IT Head and SAP Program Director, Hidrovias do Brasil S.A.

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SAP HANA helps make it easier for you to simplify
complex and expensive IT architectures. As an
in-memory computing platform, it enables you to
process massive amounts of data in real time so
you can deliver information at unprecedented
speeds. It also empowers you to build and use new
applications that can help you run your business
in new ways. With SAP HANA, you can simplify
your technology stack, dramatically reducing
multiple layers of hardware and software complexity.
Additionally, hardware, software, and user experi-
ence become simpler. Here is how SAP HANA
can help.
SIMPLER LANDSCAPE
When it comes to total cost of ownership, the single
biggest cost driver is application management
and operations. SAP Business Suite applications
running on the SAP HANA platform do not need
to maintain separate systems to support online
transaction processing (OLTP) on the one hand
and online analytical processing (OLAP) on the
other. By enabling you to merge these functions
– and to manage unstructured and spatial data
as well – SAP HANA helps drive down TCO by
empowering you to consolidate your
environment.
SAP HANA also includes shared libraries for tasks
associated with business planning and prediction.
This enables you to reduce or eliminate the need
to have separate applications and databases for
executing these functions – all with the added
benefit of dramatically faster execution. Ultimately,
you gain the ability to simplify your end-to-end
application landscape and achieve the streamlined
and integrated data center of the future. The fol-
lowing SAP customers have reduced IT costs
with SAP Business Suite powered by SAP HANA:
•• NORDYNE, a leading manufacturer of cooling and
heating equipment, achieved greater cost savings
by avoiding investing in a data warehouse.
•• MVV Energie AG, one of Germany’s largest energy
producers, reduced IT costs by harmonizing its IT
system landscape, resulting in fewer systems.
•• REALTECH AG, a leading provider of technology
consulting services, lowered infrastructure
costs by reducing server and storage needs.
SAP HANA Platform Simplification Drivers
– Revealing Significant Cost Savings
“SAP HANA has changed our view of database
management and greatly simplified tasks, giving
our business a cutting-edge advantage and
incomparable agility.”
Brian Wamwenje, IT Manager, Savannah Cement Limited

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SIMPLER DATA PROCESSING AND OPERATIONS
When it comes to data processing, SAP HANA
supports high levels of automation that help you
sidestep traditional database management and
indexing duties.With data held in memory, adding
new fields happens on the fly – without the need
for up-front data manipulation.
Business users can query this data as required.
You no longer need to ask IT to create new reports
or perform data aggregation tasks. By reducing
IT layers in this fashion, you can minimize adminis-
trative tasks like data copying; extract, transform,
and load (ETL) transformations; and postpro-
cessing. This in turn empowers IT to dedicate
fewer resources to operations and more to
innovation.
SIMPLER DATA FOOTPRINT
With advanced in-memory compressions, data
managed by SAP HANAis optimized for processing,
not for disk input and output. Data is compressed
and cached locally, dramatically speeding access
and making materialized aggregation, indexing,
and duplication a thing of the past. And because
data is stored in active memory,you can run reports
and operational analytics directly from transactional
data in real time.
Today, existing applications that run on SAP HANA
demonstrate data compression at factors ranging
from three to seven. Newer solutions designed for
the platform, which do not need materialized
views or performance-related data duplication,
are achieving data footprint reduction rates of up
to a factor of 50. The following SAP customers
have achieved these impressive results:
•• Joskin Group – 83% reduction in database size
•• CEAT Limited – 80% reduction in database size
•• itelligence AG – 72% reduction in database size
•• Fire & Rescue NSW – 70% reduction in
database size
SIMPLER CODE AND APPLICATION DEVELOPMENT
With SAP HANA, developers require fewer lines of
code, and its concise data model, extensive use
of views, and elimination of aggregates and multi-
dimensional cubes reduce application complexity.
This speeds up the development processes. The
application server pushes execution to the database
and reduces data duplication at runtime.Analytics
functionality libraries reduce codebase and algo-
rithm testing. Rapid application development
tools enable a hybrid (declarative and procedural)
integrated development environment (IDE).
SIMPLE, STREAMLINED USER EXPERIENCE
Data is delivered more quickly with real-time
responsiveness for instant insight and fast action.
In addition, applications built on SAP HANA are
role based and persona centric across lines of
business and across devices. This helps improve
efficiency, drive higher levels of performance, and
helps ensure a smooth, productive, end-to-end
user experience.

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While the simplification aspects of the SAP HANA
platform covered so far have contributed to sig-
nificantly lowering the operation cost of running
SAP Business Suite powered by SAP HANA, new
developments and implementation practices are
bringing even more reductions to the hardware
acquisition side of the TCO equation.
RELAXED HARDWARE REQUIREMENTS
FOR SAP HANA
Early in the in-memory movement, SAP wanted
to guarantee and ensure the high performance
and reliability of the hardware that runs
SAP HANA. Certification requirements were
put into place, and only a few vendors and
hardware configurations could measure up. At
the time, the recommended “appliance model”
helped ensure that these strict requirements
were met. The appliance model also offered the
market the convenience of a ready-to-go solution
that’s straightforward to implement by packaging
all the required components – hardware, soft-
ware, and services.
But SAP HANA has evolved, and the industry has
caught up with its hardware requirements. SAP
has been able to certify more appliances (more
than 450 certified appliances exist today) and relax
its requirements, offering more flexibility and lower
costs. Today, the architecture and performance
requirements of SAP HANA can be fulfilled by
many X86-based servers, bringing more cost-
effective hardware options to the market.
Furthermore, many of the hardware components
that were offered at a premium when SAP HANA
was first launched have now been commoditized,
bringing down prices.
SAP is also bringing more choice to customers by
allowing cost-effective hardware components for
SAP HANA. For example, only top-of-the-line
processors (the Intel family of E7 processor
chips) were allowed during the early days of
SAP HANA. Now, more cost-effective options are
allowed (such as Intel E5 chips), increasing the
supply of allowed architectures and reducing prices.
The Downward Trend of Hardware
Costs for Running SAP HANA

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In 2013, with the industry now able to keep pace
with hardware requirements for SAP HANA, SAP
started moving toward an open hardware
platform approach. The deployment model for
SAP HANA tailored data center integration
provides a path to an open hardware platform,
unbundling the initial appliance and allowing you
to acquire the underlying components separately
– specifically in choices for disk backup, networking
equipment, operating system environment, and
virtualization (via VMware vSphere).
SAP HANA tailored data center integration now
empowers you to reuse existing high-end compo-
nents from your data center, including storage
systems and networking adaptors, to build and
manage the SAP HANA platform. You now get the
flexibility to standardize your data centers on pre-
ferred vendor technologies and take advantage
of existing corporate discounts and licenses with
these vendors. To help ensure high performance,
SAP certifies underlying individual components
with user-friendly testing and certification tools.
This means that now you can mix and match
SAP HANA computing resources with existing
storage systems for data persistency and use free
network file systems (such as NFS).And you can
reuse existing networking components, existing
certified operating system licenses, VMware
expertise, and support contracts directly from
vendors of your choosing.
SAP HANA tailored data center integration can
bring big cost reductions,reported by our customers
to be as high as 60%, compared to the appliance
model, thanks to increased choice from a larger
number of certified hardware component
vendors.
SAP HANA As an Open Hardware Platform
“SAP HANA tailored data center integration substantially
contributes to protecting our IT investments and puts us
in the position to react quickly to changing infrastructure
requirements.”
Gerhard Reichl, Head of IT Systems, Maschinenfabrik Reinhausen GmbH

8. 8 / 11
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Virtualization is a standard procedure in today’s data
centers.It increases hardware resource utilization by
consolidating applications with complementary
workloads on shared servers, dramatically reducing
TCO. Today, customers running SAP Business
Suite powered by SAP HANA benefit from this
TCO reduction by using certified virtualization
solutions.
Virtualization allows for the partitioning of a single
SAP HANA platform server into virtual machines
dedicated to specific applications or workloads.
You can consolidate and reduce the number of
physical servers in your data center while fulfilling
high availability and scaling requirements. For
example, if you were running the SAP ERP and
SAP Customer Relationship Management (SAP
CRM) applications on two physically separate
servers, you can now consolidate both on one
server with two virtualized instances of SAP HANA.
Combined with SAP HANA tailored data center
integration, virtualization can reduce costs by
allowing multiple applications running on
SAP HANA to share the same underlying
networking and persistence storage components.
Standardizing data centers through virtualization
can bring further cost reductions through reuse
of the same tools for the provisioning, administra-
tion, and migration of instances of the SAP HANA
platform, without the need to acquire and learn
to use new tools.
By virtualizing SAP Business Suite powered by
SAP HANA software, you can also unify and
manage your SAP HANA platform with the rest of
your virtualized data center, without the need for
specialized staff.Virtualization can also dramatically
simplify and automate the provisioning of new
instances of SAP HANA, reducing deployment
time from hours to minutes and minimizing
downtime.
Virtualizing SAP Business Suite
powered by SAP HANA
“Mercedes-AMG is now live in production with SAP HANA
and VMware vSphere 5.5 with a 1 TB memory configuration,
accelerating our move to a software-defined data center.”
Reinhard Breyer, CIO, Mercedes-AMG

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The mission-critical nature of systems running
SAP Business Suite dictates that they need to
be rigorously tested before any migrations,
enhancements, or upgrades can go into production.
Behind every production system, there is an
average of five nonproduction systems for
development, testing, and quality assurance; and
these systems can add considerably to overall cost.
To help simplify operations and reduceTCO,SAP has
relaxed hardware and certification requirements of
SAP HANA for nonproduction systems running
SAP Business Suite. Commodity infrastructure
components are now allowed for nonproduction
SAP HANA platforms without certification.
For example, earlier generations of Intel E7 family
processors with lower prices are now available
for nonproduction systems running SAP HANA.
The ratio between the number of processors to
memory (256 GB per CPU for production systems)
has been alleviated, allowing you to use larger
amounts of memory per CPU.
Any standard storage, either shared or local, on any
proven file system for log and data volumes is now
also supported in nonproduction environments.
The minimum storage-to-memory ratio requirement
has also been relaxed from five-to-one to two-to-
one or less for nonproduction usage.
In a typical production environment, 10 GB or even
more powerful network connections are required
for performance optimization. For a nonproduction
environment, any commodity networking compo-
nents can be used, so you can reuse existing
network infrastructure for nonproduction tasks.
Thanks to these relaxed hardware and certification
requirements,you now have a wide range of low-cost
nonproduction SAP HANA platforms for quality
control and testing implementations of SAP
Business Suite powered by SAP HANA.
Lowering Costs for Nonproduction Systems

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New functionality in SAP HANA can further
reduce TCO for SAP Business Suite powered
by SAP HANA by allowing you to maintain and
administer multiple virtual SAP HANA platform
versions simultaneously across tenants. Multiten-
ant database functionality, a concept serving the
same purpose as virtualization but that operates
on the database level, enables customers to run
multiple applications on a single shared hardware.
Each database tenant is isolated from a security
and administrative perspective and can be used
like any other single, stand-alone database.A
common administration layer allows customers to
perform functions such as backup, restore, move
tenants, and lifecycle management on all tenants;
and each tenant can also be administered
individually.
In addition to TCO reductions due to better hard-
ware utilization and simplified administration, the
multitenant database feature allows customers to
create trusted connections between independent
database tenants, for direct access from other
databases without data replication. This enables
you to run your SAP Business Warehouse (SAP
BW) application and SAP ERP on tenant databases
in a single server within the same SAP HANA
platform or a scale-out cluster, and access com-
ponents in SAP ERP from SAP BW in real time
without replication. You can also deploy SAP CRM
and SAP ERP on tenant databases and create
cross-application reports in real time.This eliminates
costs associated with ETL operations and
replications.
Cost Benefits of New Multitenancy
Functionality in SAP HANA

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Businesses in today’s connected economy run a
complex and wide array of enterprise applications
and software, from SAP ERP to the SAP Supply
Chain Management (SCM) and SAP Supplier
Relationship Management (SAP SRM) applications.
On average, SAP customers run more than five
instances of SAP Business Suite applications.
This fragmentation can lead to increased opera-
tional and maintenance costs and adds significant
IT complexity.
Running SAP Business Suite on SAP HANAcurrently
supports codeployment for SAP SCM, SAP SRM,
and SAP ERP. Previously, a development, test,
and production system was required for each
application – but now the applications can be
codeployed on a single server running SAP HANA
with one database schema. This reduces admin-
istrative costs significantly,especially for companies
with a wide range of functionality and a smaller
workload and data footprint. SAP is also actively
working on an expanded codeployment road map
to allow for more consolidation of SAP Business
Suite applications on a shared server running
SAP HANA.
LEARN MORE
To find out more, check out the Forrester Total
Economic Impact Study of SAP HANA or visit us
online at www.sap.com/suiteonhana.
Consolidate Servers and Reduce
Costs with Codeployment

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