ERP Transitions Loom for SAP on IBM i Customers
May 23, 2022 Alex Woodie
Unless SAP changes its plans, the company will end mainstream support for its business software running on IBM i in five years, with an option for extended maintenance through 2030. The looming end of support for the decades-long partnership between the IBM i organization and the German software giant puts about 1,500 joint customers in the tough spot of deciding how to transition away from their current ERP platform. And one they have probably invested a lot of time, money, and effort into.
SAP’s preferred destination for all of its ECC (ERP Central Component) and Business Suite customers – as well as any stragglers who are still on R/3 – is S/4HANA, which is the name of the full suite of software that includes the latest Business Suite 4 application stack as well as the HANA database.
At last check, SAP had around 45,000 total customers running various enterprise software products in the cloud and on-premises. As of the third quarter of 2021, SAP reported that about 17,500 customers were running S/4HANA, which runs only on Linux and which is available in cloud-based and on-prem versions. That is a slower uptake than SAP had hoped for, which is probably due to the fact that S/4HANA has been a work in progress and has lacked functionality found in older suites.
That leaves tens of thousands of SAP shops running soon-to-be legacy versions of ECC and Business Suite atop Windows Server, Linux, and Unix platforms paired with IBM Db2, Oracle, and Microsoft SQL Server databases with important decisions to make. As previously stated, about 1,500 customers run SAP on IBM i, a setup that has customers using IBM i both as an application server as well as the database (via Db2 for i). It’s a unique setup as far as supported SAP platforms go, but it’s one that has worked well for SAP and IBM since the Power partnership started in the mid-1990s.
As it battles with Oracle (and to a lesser extent, Microsoft) for ERP supremacy, SAP is eager to stop funding the enemy as it seeks a larger share of the $50 billion global ERP market. That is what drove the thinking behind its 2010 acquisition of Sybase and its 2011 launch of HANA, which was initially conceived as an in-memory database that could simultaneously run analytical as well as transactional loads. SAP has since adopted the name for its full stack of software with Business Suite, hence S/4HANA.
In a nod to its special relationship with IBM and the Power platform, IBM and SAP worked together to get the HANA database running on Power8 back in 2015 and 2016, albeit only on Linux (which is still the case). Both IBM and SAP have benefited from this move, as they have thousands of joint customers running HANA on Power. While there are more AIX and Linux on Power customers adopting HANA, there are some SAP on IBM i shops adopting HANA – not for production ERP workloads, which are not supported on any non-Linux platform, but as a “sidecar” for analytics workloads.
This familiarity with HANA in Power shops may help Power customers with their future transition to S/4HANA, according to Steve Sibley, vice president of Power Systems offering management at IBM.
“As far as what we see customers doing, certainly they have a couple of different options,” Sibley told IT Jungle in a recent interview. “They can move . . . to S4/HANA Cloud or they can run S4/HANA on prem. HANA is not all containerized and S/4 is not all containerized. It’s running on Linux and in fact . . . we have lot of customers who have moved to [HANA on the cloud].”
There aren’t many IBM i customers using HANA, but a lot of Power customers in general are, Sibley said. “We have over 3,000 customers running on HANA, and the vast majority of them obviously are running on prem or in one of our MSPs that are hosting them,” he said. “So they can continue to run that in Power as they move initially to HANA from a database standpoint and then to S/4 over time, and they can continue to run that on Power.”
Sibley points out that SAP on IBM i customers still have about five years of new features and enhancements from SAP to look forward to, and can expect to receive maintenance updates until 2030. And these customers may be able to stay on their ERP platform for another year or two after 2030 before regulatory or compliance pressures become so great that they need to adopt a fully supported ERP product, he said.
Sibley may not like SAP’s decision to move away from IBM i and other platforms besides Linux, but he said he understands it.
“We only have so much control over the application vendor,” he said. “SAP is a close partner of ours, from that perspective, and while we would love them to continue to enhance things, we understand they have to make those business decisions of what systems they enhance and don’t enhance.”
IBM i shops are in the same boat as customers running SAP software on Windows, Unix, and various other database management systems that will cease being supported in 2027, he points out. That doesn’t take the pain away from the looming end of life date, but it puts it in some perspective.
“We know there are tens of thousands of SAP customer who haven’t started their journey [to S/4HANA], including the ones we have on IBM i,” Sibley said. “So it will be interesting to see how SAP approaches that as we get closer to 2027. Our intent obviously is to keep those customers as happy as possible, up to that point, and beyond if SAP decides they’ll continue to extend.”
There is always the possibility that SAP will extend the end-of-life deadline for older application releases. After all, the end-of-life date was originally 2025, but it pushed it out two years in early 2020. Would the company consider giving tens of thousands of customers another break on the forced march to S/4HANA, which is not an upgrade but full a reimplementation?
If enough SAP customers balk at migration to S/4HANA, either because the features are not yet fully baked or because another ERP product looks like a better fit, then SAP may have to add another extension.
In the meantime, SAP on IBM i customers must begin contemplating their move away from their SAP on IBM i software, which some customers have run for more than two decades. Sibley said IBM is working with its Power customers to prepare them for the transition to S/4HANA. IBM is helping them deploy the new application stack and shift more of their resources to S/4HANA. The AIX customers are further ahead in the game than IBM i customers, he said.
“It’s probably an easier move [SAP customers on other platforms], because again the platform is not as integrated,” Sibley said. “The whole IBM i platform, because all the business processes are integrated into the environment – it’s not just taking the database out. You’re changing your whole environment with IBM i.”
It’s certainly not a move to be taken lightly. And considering the fierce loyalty that many IBM i shops have shown to their platform of choice, it’s a transition that these customers would prefer not to take at all. But that’s life in enterprise computing.
“I was just with an IBM i customer who just loves their SAP on IBM i,” Sibley said. “They’re reluctant to think about HANA, as you can imagine.”
SAP declined to comment for this article.