SAP and IBM join hands to take on Oracle and Amazon

Long-time application partners SAP and IBM have announced that SAP has selected IBM as a strategic provider of cloud infrastructure services for its business critical applications. In simple words, SAP will use IBM’s Cloud for its much vaunted database HANA as IBM offers SAP HANA Enterprise on IBM’s cloud. A press release explained, “SAP HANA Enterprise Cloud will expand to major markets with the addition of the IBM cloud data centres. This is expected to enable customers to deploy their SAP software around the globe in a faster and more secure environment that is backed by IBM’s cloud capabilities.”

The move is designed to take on their joint arch-rival Oracle, which has a play in database (SAP) as well as hardware (IBM), and for IBM also includes a chance to score over Amazon, which is a big worry for IBM in the cloud space. Closer home in India, Oracle has been shouting from the rooftops about how its engineered systems are grabbing business from IBM in India .

SAP’s Indian customers could also gain from the fact that IBM now has a cloud data centre based in India , as part of 40 SoftLayer data centre locations announced by IBM in early 2014. This helps from a regulatory perspective in some industries where hosting is mandatory in India, Incidentally, the location of a data centres not only matters from a compliance and regulatoryperspective, besides of course the comfort factor with having your business-critical data close to you, but also significantly matters when it comes to performance and accessibility since latency is a key issue when cloud services are hosted outside India. Hence, concerns about SAP not having Indian data centres would be addressed and enterprise apps that Indian companies have not moved to the cloud because of compliance concerns may now have a viable option.

Commenting on the deal, Holger Mueller, Principal Analyst & VP, Constellation Research said, “This is a win / win / win for joint customers, SAP and IBM. Customers get an enterprise friendly cloud infrastructure with a high number of geographical locations, and the goal of bring this to 40 by IBM. SAP gets a partner in building out IaaS infrastructure and can focus more on enterprise software investments and IBM get key load for its cloud on a worldwide scale. Going forward we need to see how attractive this partnership will be for customers that are not already IBM customers, so if there is a net takeaways from other hardware vendors both on premise and potentially in the cloud.”

Mueller added in a blog post that SAP will offer a single SLA to customers, with SAP being the first line of support, and also for running and administering the pieces that run on IBM’s cloud infrastructure. This is again important because enterprise customers look for a single ’throat to choke’ when it comes to strategic projects and few projects would be more strategic today in an enterprise than moving to the cloud.