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SAP Extends Cloud Alliance with Microsoft to Include ERP

Cloud computing has been around now for more than a decade. But it’s only recent phenomenon that is seeing internal IT organizations gain enough confidence to start employing multiple clouds. After all, mastering one cloud is hard enough. Having the skills needed to manage two or more clouds is still relatively rare.

One indication that multi-cloud computing is about to become the new normal is an extension of the alliance between SAP and Microsoft. SAP is making an instance of the SAP S/4 HANA suite of ERP applications available on Azure. Also, both companies say they will migrate their internal business processes to run on that instance of SAP S/4 HANA.

SAP also revealed that its Ariba procurement network is now also relying on Microsoft Azure to run some processes and that SAP Concur software-as-a-service (SaaS) application will also be migrated to Azure.

Partners are watching closely the rate at which ERP applications might shift to public clouds. In its most recent financial statement, SAP claimed there are now over 6,900 SAP S/4 HANA customers, up around 70 percent year over year. In the third quarter, approximately 600 additional customers signed up of which more than 40 percent were net new. SAP has not revealed what percentage of those instances are running in a public cloud. But given SAP historic strengths in on-premises IT environments, it is likely most are still running on-premises. But SAP is signaling it expects a much more significant percentage of SAP S/4 engagements to be delivered via the cloud. In general, SAP is pursuing a multi-cloud strategy spanning Amazon Web Services (AWS), Google Cloud Platform, IBM Cloud, Microsoft Azure and others.


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Arlen Shenkman, executive vice president for global business development and ecosystems at SAP, says partners should view this extension of the SAP alliance with Microsoft as an indication that enterprise-class applications are now ready to be deployed on Microsoft Azure. Shenkman says SAP its partners need to align their efforts with that new cloud computing reality.

“We need to align the selling motions with partners,” says Shenkman.

In general, interest in multi-cloud computing is on the rise because IT organizations are worried about getting locked into a single cloud service provider. To maintain some level of independence, they are opting to deploy various classes of workloads on different clouds. Most of the time those clouds are managed in isolation from one another. The challenge that creates for partners is IT organizations increasingly expect them to have expertise deploying and managing workloads on multiple clouds. They may not know where an application workload may wind up running. But they do know they don’t want to have to hire separate organizations to help them manage each company.

AWS is going to be the dominant cloud environment for years to come. But as both Microsoft and Google gain more traction, the gap between them and AWS is starting to narrow. The challenge and opportunity for the channel is going to be developing the expertise needed to master multiple clouds in a way that makes relying more on them to manage various public clouds the most straightforward choice possible.

One Comment

  1. Kartik Rawal Kartik Rawal December 5, 2018

    Cloud computing is really being developed on a massive scale and Microsoft and SAP have done a great collaboration. Thank you for sharing such an informative article.

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