SAP and Microsoft Enter a Three-

year Cloud Deal

Posted on October 30, 2019 by Andrea Hilao in Featured, In Depth, Market Insights

In 2017, SAP and Microsoft CEOs Bill McDermott and Satya Nadella have announced the further integration of
their cloud offerings SAP HANA Enterprise Cloud on Microsoft Azure for customers to run the suite in a secure,
managed cloud.
SAP and Microsoft have entered an extensive three-year deal to help SAP customers move from an on-premise
model to remote servers. Essentially, the partnership will be able to accelerate customer adoption of SAP
S/4HANA and SAP Cloud Platform on Microsoft Azure.
The software giants’ partnership has already shown positive impact as reported in SAP’s Q3 2019 Quarterly
Statement wherein 18% points of the 39% Q3 new cloud bookings growth is attributed to the new alliance.

“Microsoft will bundle SAP cloud services into a bundle we call Embrace, and they’ll sell these
directly through their field organization to their customers who will run SAP the in Azure cloud, “
said SAP co-CEO Jennifer Morgan in a call with investors.

Project Embrace on Microsoft Azure

SAP and Microsoft, with a global network of system integrators, can now offer bundles with unified reference
architectures, road maps and market-approved journeys for customer’s seamless transition to the cloud.

To ensure smoother migration of SAP ERP and SAP S/4HANA customers from on-premises to the public cloud,
Microsoft will re-sell components of SAP Cloud Platform together with Azure.
The newly appointed co-CEO Morgan emphasised that reducing complexity while minimising costs for customers
is the ultimate goal of the alliance. She stated:

“Bringing together the power of SAP and Microsoft provides customers with the assurance of
working with two industry leaders so they can confidently and efficiently transition into
intelligent enterprises.”
Judson Althoff, Microsoft Worldwide Commercial Business Executive Vice President, explained:

“SAP’s decision to select Microsoft Azure as its preferred partner deepens the relationship
between our two companies in a differentiated way and signals a shared commitment to fostering
the growth of the cloud ecosystem.”
In essence, Project Embrace provides customers with:
 A simplified move from on-premise editions of SAP ERP to SAP S/4HANA for customers with integrated
product and industry solutions through industry market bundles.
 Collaborative support model for simplified resolution through a combined support model for Azure and SAP
Cloud Platform
  Jointly developed market journeys to support customer needs with the help of SAP and Microsoft system
integrator partners.
Trusted Alliance
SAP has previously partnered with Microsoft alongside Adobe last year on bringing the massive amount of data
generated by their customers into one package running on Azure. Earlier this March, the three companies shared
during the Adobe Summit the expansion of their Open Data Initiative program launched last 2018.

Similarly, SAP and Microsoft have partnered to integrate software and bring SAP business databases to Azure
back in 2016.

According to Morgan, though the German enterprise’s alliance with Microsoft has deepened, it does not limit SAP
to continue working with other cloud giants like Amazon and Google. She explained:

“As always, choice will prevail as we recognize that many of our customers also run SAP on AWS
and GCP, for example. Customers will still have benefits of the best-run SAP in their public cloud
of choice.”