SAP’s private cloud strategy to run on Vblock

SAP AG unveiled a plank in its strategy for private cloud computing at the Sapphire conference on Wednesday in Orlando, with an announcement regarding its ERP (enterprise resource planning) software running on the Vblock systems backed by Cisco Systems Inc., EMC Corp. and VMWare Corp.

Vblock, announced last year, combines servers, networking equipment, storage, management, security and virtualization components in a stack for building private clouds.

Cloud computing promotes performance and cost efficiencies by sitting applications on top of an virtualized pool of infrastructure that can shift resources in response to demand. It stands in contrast to traditional setups, where a customer may build a system more powerful than is always needed in order to respond to peak periods, meaning that part of the infrastructure may often be idle.

Levi Strauss & Co. worked with the vendors and consultants on lab-based tests that showed running SAP on Vblock could lead to cost savings, according to a statement.

Levi was a particularly apt customer for the companies to work with initially, given the themes of cost-savings and easier system management. Levi’s global SAP implementation has been marked by serious issues that even resulted in a significant impact to its second-quarter 2008 earnings, according to a filing with the US Securities & Exchange Commission.

But SAP is clearly thinking beyond a single customer’s woes when it comes to pushing private clouds.

“It’s clearly important for apps players to start getting their ducks in a row in terms of a virtualization/private cloud strategy,” said 451 Group analyst China Martens via e-mail. “It’s easier for Microsoft and Oracle to work in this area since they both have their own virtualization technologies.”

Still, the announcement represents “a marking of territory SAP sees as important to its enterprise customers,” Martens added.

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