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IBM and SAP: A Cloud Pact That Solves Problems and Holds Promise

16/10/2014 by


IBM announced a cloud partnership on Tuesday with SAP, the German software giant, that may help justify some of that investment. The pact also suggests that the demand from mainstream corporate customers for cloud-delivered software is accelerating.

The partnership covers SAP’s cloud offering tuned for high-speed data analysis, SAP HANA Enterprise Cloud. SAP announced its cloud offering last year, but declined to say how many customers it has. But companies increasingly want the option of a cloud version of the software maker’s bread-and-butter suite of business applications for the automated management of operations. SAP recently surveyed its customers and found that 50 percent of them wanted to move some or all of its business applications to the cloud. Earlier concerns about the reliability of cloud-based software and having sensitive corporate data reside outside the company walls are receding.

“The customers are ready now,” said Kevin Ichhpurani, senior vice president for business development at SAP. “And with this partnership with IBM, we get scale instantaneously and global reach.”

The IBM deal also removes a hurdle for SAP in the cloud business — the need to build data centers, at great cost. “It’s capital intensive and it’s not where SAP’s expertise lies,” said Holger Mueller, an analyst at Constellation Research.

IBM, Mr. Mueller noted, has a very different challenge. In its eagerness to gain ground, the company’s cloud spending spree has an element of “build it and they will come.” Having SAP, a leader in business software, come over to the IBM cloud platform is a notable win.

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