SAP and Microsoft expand partnership to accelerate digital transformation in the cloud

It is SAP’s annual user conference that is happening in Orlando, so it’s the time of the big announcements, and SAP did not disappoint, having Microsoft CEO Satya Nadella join SAP CEO Bill McDermott on stage.

So let’s take the press release apart in our custom style – it can be found here (also check out my overall take on the Day #1 keynote – here):

ORLANDO, Fla. — May 17, 2016 — SAP SE (NYSE: SAP) and Microsoft Corp. (Nasdaq: “MSFT”) today announced joint plans to deliver broad support for the SAP HANA® platform deployed on Microsoft Azure, simplify work through new integrations between Microsoft Office 365 and cloud solutions from SAP, and provide enhanced management and security for custom SAP Fiori® apps. This announcement was made at the 28th annual SAPPHIRE® NOW conference.

MyPOV – A good summary, trying to match it in brevity one could say – SAP finds it’s IaaS platform with Azure.

Microsoft CEO Satya Nadella and SAP CEO Bill McDermott will take the stage together at SAPPHIRE NOW today to discuss the expanded partnership that will help organizations use the cloud to drive innovation, agility and enable new ways to work.

MyPOV – Yes they did – in a good conversation moderated by a SAP master of ceremonies, it was clear that both CEOs want to make this partnership work,

“At Microsoft, we are focused on empowering organizations to advance their digital transformations,” said Satya Nadella, CEO, Microsoft. “Together with SAP, we are bringing new levels of integrations between our products that provide businesses with enhanced collaboration tools, new insights from data and a hyper-scale cloud to grow and seize new opportunities ahead.”

MyPOV – Good quote from Nadella, tying in what Microsoft brings to the table with Office, BigData and Azure – all for helping customers through digital transformation.

“We believe the IT industry will be shaped by breakthrough partnerships that unlock new productivity for customers beyond the boundaries of traditional platforms and applications,” said McDermott. “SAP and Microsoft are working together to create an end-user experience built on unprecedented insight, convenience and agility. The certification of Microsoft Azure infrastructure services for SAP HANA along with the new integration between Microsoft Office 365 and cloud solutions from SAP are emblematic of this major paradigm shift for the enterprise.”

MyPOV – Equally good quote from McDermott, but interesting to see the emphasis on user experience. Using the ocean liner metaphor it looks like SAP is on the ‘sun deck’ and Microsoft closer to the ‘machine room’ – both important places, and synergistic for both vendors.

New Deployment Option: SAP HANA on the Microsoft Azure cloud

With SAP HANA on Azure, organizations across all industries will be able to deliver mission-critical applications and data analytics on a global scale with enterprise-grade security and compliance. Working together, the companies are certifying SAP HANA to run development, test and production workloads on Microsoft Azure, including SAP S/4HANA. These new offerings for SAP HANA are built to handle customers’ largest and most demanding workloads.

MyPOV – Bringing HANA to Azure is a good move for both vendors, as SAP gets an IaaS platform, and Microsoft gets load from the enterprise. Barring details, it may point to a hasty defined partnerships, it would be good to know which instance types will be available for customers, how to migrate to them etc. And by definition when HANA runs, S4/HANA can run, too – equally, more details needed here.

Early adopters of this new offering, such as Coats, Rockwell Automation and Nortek, have already experienced the benefits of deploying SAP HANA on Azure. According to Sujeet Chand, senior vice president & chief technology officer from Rockwell Automation, “The Microsoft Azure platform provides us the scalability, security and level of services needed to confidently run our most demanding SAP HANA and Big Data applications. We are excited to be an early adopter of running SAP HANA on Microsoft Azure since it is an important capability in helping us realize our vision for The Connected Enterprise and advanced data analytics.”

MyPOV – Always good to see when vendors follow customers, even better when customers are already using the joint offering. It is not clear though why Coats Rockwell Automation and Nortek moved to Azure – vs an on premises install or vs. running HANA in the SAP cloud. Databases by their very nature cannot be elastic (see an early musings post here) even though SAP discovered elasticity from data federation later (my musings here). Both vendors will have to make the value proposition of their joint offering more tangible.

Cloud Services Integrations: Public Cloud Solutions from SAP and Office 365

Every day, millions of business users work in Microsoft and SAP® solutions, creating documents, reading e-mails, filing expense reports, invoicing vendors and more. New integrations between the companies will combine Office 365 communications, collaboration, calendar, documents and other data with cloud solutions from SAP, including Concur, SAP Fieldglass®, SAP SuccessFactors®, and SAP Ariba® solutions, helping employees improve their overall productivity.

MyPOV – Good to see that both vendors move their long term partnership around Office to the cloud age – but this time not only integrating the classic ERP scenarios, but also the newer SAP offerings of Concur and SuccessFactors. In the keynote both vendors showed a call out to Concur from Office, and vice versa, a Leave of Absence request from SuccessFactors into Office.

At SAPPHIRE NOW, Microsoft and SAP will demonstrate several of these integrations between Office 365 and cloud solutions from SAP. These new capabilities will be available starting in third quarter of 2016, with plans to release additional integration features in the future.

MyPOV – Always good to see near term deliverables – the question is though, how will the cloud make it different. Previous partnerships – also announced at Sapphire – e.g. on Duet have gotten more than quiet in recent years. Why it will be different this time (it’s in the cloud?!) needs to be explained.

Flexibility in the Cloud: Management and Security of Custom SAP Fiori Apps

SAP will enable its customers to build and deploy custom mobile hybrid SAP Fiori apps on SAP HANA Cloud Platform with an open standards plug-in framework. As part of this framework, customers can build apps that can be managed, deployed and better protected with Microsoft Intune. Using the cloud build process as part of SAP Fiori, cloud edition, app publishers will be able to embed Microsoft Intune management capabilities in their apps, leveraging the same capabilities used by Office 365 mobile apps. The integration is expected to be available in the third quarter of 2016. At SAPPHIRE NOW, SAP will demonstrate this end-to-end capability as part of SAP Fiori, cloud edition.

MyPOV – Another synergy area to explore – using Microsoft Intune as MDM for mobile apps built by Fiori. As SAP has no native MDM offer, good to see the plug in architecture for mobile Fiori Apps.

Overall MyPOV

The Microsoft and SAP partnership goes into the cloud era, overall probably we are nearing a double digit number, from support for Windows NT in early days, SQL Server in the late 90ies etc. Even Nadella brought up a discussion between former CEOs Gates and Plattner at a Sapphire conference… so there is a lot of (good) history between the two vendors. And partnering makes sense for both Microsoft and SAP, though both need to make a better job in regards of the benefits, and why (e.g. for Office) it is different this time. And customers surely want to learn more about cost / licensing and pricing. To be fair it is early days – so stay tuned, and Sapphire is still young.

The biggest potential implication is the SAP HANA / S4/HANA deployment on Azure. Microsoft needs load that fuels Azure post the Office365 migrations, so going after the most uniform, single vendor load in the enterprise – SAP – makes tremendous sense. The partnership does not solve the challenge that SAP has, that customers are more slowly than fast adopting the move to both HANA and S/4HANA, something SAP is trying to address this Sapphire, so stay tuned on the topic. In its most extreme form, the partnership could be the beginning of SAP abandoning its own IaaS plans with SAP Cloud. SAP never had the same IaaS ambitions like e.g. Oracle, but this partnership could be pulling a page from the Infor playbook (where a public cloud deployment is always on Amazon AWS). But that’s too early to call, but would also mean that SAP will ‘leak cloud $s’ – as the infrastructure payments would go to Microsoft.

That this partnership has potential and its respect in the industry can be seen by the fact that Amazon AWS was motivated to ship its own press release on SAP customers running (also in production, HANA mentioned but mostly older SAP products, but no S/4HANA) on AWS (see here). The question now is – will SAP move up the stack and focus on PaaS (with Hana Cloud Platform) and SaaS (…) or will it invest into a SAP Cloud IaaS (project Monsoon), as currently most SAP cloud runs on SAP’s built or acquired infrastructure. For now we already know the SAP cloud future is going to be multi cloud for the future, running and supporting its own cloud and Azure (for now).

So some key decisions ahead from SAP, hoping to get some more clarity this week at Sapphire, stay tuned.

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