Pioneer China uses Amazon Web Services to build infrastructure for its SAP applications, which stems from considerations of compliance with the Cybersecurity Law.

The Cybersecurity Law of the People's Republic of China, passed on November 7, 2016 and implemented on June 1, 2017, has no direct relationship with Pioneer China, but it allows Pioneer China to see the trend of compliance of data storage in China. As stipulated on the Cybersecurity Law, personal information and important data collected and generated by operators of key information infrastructure in operations within the territory of the People's Republic of China shall be stored within the territory of the People's Republic of China.

On April 11, 2017, Chinese State Internet Information Office formulated and issued the Measures on the security assessment of cross-border transfer of personal information and important data (Draft for comments) in accordance with the Cybersecurity Law. The Measures proposes that personal information and important data collected and generated by network operators in operations within the territory of the People's Republic of China shall be stored within the territory of the People's Republic of China. The security assessment of personal information and important data collected and generated by other individuals and organizations within the territory of the People's Republic of China shall be carried out with reference to the Measures.

So far, the official version of the Measures for Assessment has not been released. However, Pioneer China has already migrated its SAP applications originally stored in Japan, such as sales management, inventory management and management accounting, to China and deployed them in the Amazon Web Services China (Beijing) Region operated by SINNET to address potential compliance issues in advance.

In March 2018, Pioneer China decided to migrate its SAP applications, such as sales management, inventory management and management accounting to China. Originally, it was intended primarily to address potential compliance issues. In the implementation process, Pioneer China saved costs and improved performance through the adoption of Amazon Web Services Cloud, which could be described as killing three birds with one stone.

In Japan, the SAP applications of Pioneer China were hosted in IDC's computer room. For this migration, considering the trend of Cloud Computing, Pioneer China's first option was Cloud. Of course, considering a variety of factors, the scheme to continue to use IDC hosting was not excluded.

Pioneer China compared the total cost of three schemes in five years under the premise of ensuring system performance, stability and reliability. One was Cloud in Amazon Web Services China (Beijing) Region operated by SINNET, one was IDC hosting in China and another was IDC hosting in Japan; for better comparison, Pioneer China also asked the IDC hosting service provider in Japan to calculate the total cost for the next five years if it continued to use IDC hosting.

It turned out that using Amazon Web Services Cloud could reduce the five-year total cost by more than 50% compared with continuing to use IDC hosting in Japan. Even at a preferential price, it would spend at least RMB600,000 a year if it continued to use hosting in Japan, while it would spend less than RMB 300,000 a year if using Amazon Web Services. The cost of using Amazon Web Services was also much lower than that of using hosting of IDC service providers in China. Given the trend toward Cloud computing and the potential to migrate more applications to Cloud in the future, Pioneer China decided to use Amazon Web Services Cloud as the infrastructure for its SAP applications.

The cost savings are mainly from several aspects: the first point is IT operation and maintenance cost: traditional IDC model needs to be responsible for the operation and maintenance of server and network, and IT labor cost in Japan is relatively high, while after Clouding, Pioneer China can almost realize zero operation and maintenance; the second is bandwidth cost of international dedicated line: for the access of SAP applications, Pioneer China has to spend more than RMB 100,000 per year on the international dedicated line, while after Clouding, it can only spend about RMB 30,000 per year; the third is cost saving by using Amazon Web Services reserved instance: compared with the pricing on demand, Amazon Elastic Compute Cloud (Amazon EC2) reserved instance can offer heavy discount up to 75%.

In terms of application performance, Pioneer China deploys its SAP applications with two Amazon EC2 m4.2xlarge instances. Each m4.2xlarge has 8 vCPUs and 32GB memory card, which doubles the performance of Pioneer China's SAP applications. Daily sales report and monthly financial statement are tasks requiring high performance in Pioneer China's SAP applications. In traditional IDC mode, the waiting time for Pioneer China to prepare daily sales report and monthly financial statement is generally 5-6 minutes, while after using Amazon Web Services, the waiting time is reduced to within 3 minutes.

Another advantage of using Cloud is that it's very easy to expand. The Amazon EC2 m4.4xlarge instance provided by Amazon Web Services has 16 vCPU and 64GB memory, and the Amazon EC2 m4.10xlarge instance has 40 vCPU and 160GB memory. If necessary, Pioneer China can temporarily apply for a larger instance and shut down after utility, on the basis of pay-for-use.

In May 2019, Amazon Web Services launched the Amazon Direct Connect network connection service operated by NWCD Cloud, and opened two new sites in Shanghai and Shenzhen to access to the Amazon Web Services China (Beijing) Region operated by SINNET respectively through data centers of GDS (Global Data Solutions) in Shanghai and Shenzhen. Pioneer China has achieved high-speed and stable connection and access to the Amazon Web Services China (Beijing) Region operated by SINNET through DX service and fiber optic direct connection to data centers of GDS Shanghai. The bandwidth cost saving of Pioneer China after it use Cloud, as mentioned earlier, is also because that through DX, Pioneer China only needs to pay for local fiber optic connection in Shanghai.

DX site follows standard elastic model of Amazon Web Services, with each site including two customer-oriented devices, which allows Pioneer China to build flexible local connections, as well as redundant connections to trunk networks to improve reliability.

Of course, it is necessary to shop around for selecting a Cloud Service provider. Fu Bin, head of the Information Department of Pioneer Electronics (China) Investment Co. Ltd., said that Pioneer China had also negotiated with two other Cloud Service providers when selecting its Cloud Service provider. One was the Cloud of a large IT company in China, but they had not yet had SAP success cases; the other was a large Cloud Service provider in China, and they only had SAP HANA success cases, while Pioneer China still used SAP R/3. After comprehensive comparison, Amazon Web Services is the ideal selection.

Shanghai HAND Enterprise Solutions Co. Ltd., a APN partner, is a well-known ERP consultation and implementation company with rich experience. With Hand's help, Pioneer China successfully migrates its SAP applications from Japan to China.

Through the use of Amazon Web Services and close contact with Amazon Web Services, Fu Bin thought that Amazon Web Services was a very good selection and he gave three comments to Amazon Web Services: one is good service; the second is stability and reliability; the third is emphasis on technology exchange and application sharing. Through Amazon Web Services's online and offline technology exchanges and sharing, Fu Bin had more and more profound understanding of the Cloud.

Fu Bin said that, through this Cloud practice, the company's conservative attitude toward IT infrastructure had changed greatly, and its trust in the Cloud had been greatly strengthened, and more Cloud would be considered in the future. In the past, security is the biggest concern about Cloud Computing. Now, Fu Bin finds that the security of Cloud has no difference from that of local computer room, and all security measures of traditional data center can also be provided by Cloud Architecture.

Fig. 1 is Pioneer China's system architecture. The Amazon Web Services Cloud Services used include Amazon EC2, Amazon Simple Storage Service (Amazon S3), DX, Amazon Virtual Private Cloud (Amazon VPC), etc.

At present, many multinational companies in China need to access IT applications at their headquarters through international ports. The slow response rate not only affects work efficiency and usage experience, but also leads to high cost and risks of noncompliance in the future. Pioneer China's successful case is a good reference.