With all the talk about cloud coming from SAP these days, there’s one cloud option that doesn’t get much publicity – the Partner Managed Cloud.  The Partner Managed Cloud (PMC) is basically a solution whereby an SAP PMC partner can buy the SAP licenses on behalf of the customer, then bundle those licenses with a cloud hosting and managed services solution, and turn it into a monthly operating expense (OPEX) for the end customer.

To get started with PMC, it’s a simple 4 step process, so let me explain the details because this can be a very attractive solution for many current and future SAP customers.

Here’s how it works.

  1. The customer determines the software requirements and the term of the agreement they prefer*.
  2. The PMC partner purchases a term license from SAP for the specified software on behalf of the customer.
  3. The PMC partner scopes a cloud hosting and managed services solution to support the specified software.
  4. The partner combines these three components (the SAP license, cloud hosting and managed services) into a bundled single monthly fee for the customer, based on the term of the agreement

*Multiple SAP applications can be purchased at once and customer that already have on-premise systems can use the PMC program just for additional SAP products they wish to use.

As you can see, it’s a straight forward program.  In addition to its simplicity, there are numerous customer benefits of the program. 

  • The SAP licenses, hosting of the applications, and managed services get bundled into a single operating expense.  Although not SaaS in the traditional senses, you are paying a single monthly fee for the use of SAP software just like in a SaaS model.
  • Licenses can be obtained for virtually any SAP product as part of the solution. 
  • Additional user licenses can be added over the life of the contract and be co-terminus with the original contract.
  • Other SAP Software products can also be added over the life of the contract.
  • Terms of the agreements can range from 2-7 years
  • At the end of the contract term, the customer can renew for another term or simply let the contract expire.
  • There’s no huge outlay of capital for an initial software or hardware purchase allowing you to spend capital budget on more pressing business needs
  • Annual SAP maintenance is included in the monthly fee so customers have access to OSS and all patches and updates
  • The customer owns all their data

So what about functionality?  The PMC program utilizes the same standard on-premise versions of the SAP products you may already be familiar with, so there are no limits to functionality or customizations that can be made.  Customers can even take advantage of industry specific solutions and Rapid Deployment Solutions (RDS’s).

In addition, as a PMC customer you will be running a dedicated instance of the software – this is not a multi-tenant cloud solution.  So unlike other cloud solutions you aren’t forced into mandatory quarterly updates or down windows that adversely interrupt your business.  Working with your PMC partner you can tailor updates and down windows around your requirements.  Basically, you get the operating expense benefit of a cloud based SaaS solution with the value, flexibility, and support of a dedicated hosted solution.

There are also significant implementation benefits.  First, due to the bundled nature of the solution, there are fewer vendors for the customer to deal with.  There are no lengthy lead times to negotiate, procure and implement infrastructure.  And because SAP will be deployed in the cloud, infrastructure ramp-up time for example is almost zero!    Also, with the many industry solutions and RDS images now available, most companies will find configuration time is dramatically reduced compared to days past where configuration was started from a “vanilla” system installation.  Implementation is streamlined since PMC partners like Managecore have pre-existing relationships with functional firms that can quickly assess, blueprint and implement any of the SAP solutions.

Lastly, for any customer that has been off SAP maintenance for 2 years or more, relicensing your SAP products under the PMC program is one of the only ways to get back on SAP support and forgo any maintenance back-payments!  So, if you’ve gone to a 3rd party maintenance provider in the past, but are now interested in HANA, needing to upgrade your EHP level, want to implement another SAP product, or just need to right-size your user licensing, the PMC program can get you there in a very cost-effective manner.

From more information about the Partner Managed Cloud, contact us.

Frank Powell
About the Author:

Frank Powell

Frank is an experienced Information Technology executive that excels in high-level strategic and operational guidance to help manage and grow businesses. With 25 years experience in IT and over 19 of those years specifically in SAP, his thought leadership on industry trends, process improvement and best practices at SAP events, conferences and educational webinars are invaluable assets for companies. Frank provides his past experience in developing new technology initiatives with ever-evolving innovations to grow businesses and achieve high-performing solutions at a lower cost of ownership for your company.