IBM, SAP Cloud Deal a Major Step for Enterprise Cloud Adoption

By Darryl K. Taft  |  Posted 2014-10-17 Print this article Print
IBM cloud SAP

“This announcement is a significant milestone in the deployment of enterprise cloud,” said IBM chairman, president and CEO Ginni Rometty, in a statement. “It builds on our two companies’ long history of bringing innovation to business, and extends IBM’s position as the premier global cloud platform. Our secure, open, hybrid enterprise cloud platform will enable SAP clients to support new ways to work in an era shaped by big data, mobile and social."

In a blog post, Constellation Research analyst Holger Mueller called the new partnership, “A good move by IBM to secure a piece of the SAP enterprise load. Compared with, e.g., Oracle and Microsoft, IBM brings the least in-house enterprise load to the cloud game, based on its 100+ SaaS products. That has forced IBM to look for load outside of IBM, and this is the first partnership IBM has signed. I would not expect it to stop here for IBM.”

Holger also noted that in early 2014, IBM announced plans to expand to 40 data center locations over the next several quarters as part of its $1.2 billion cloud expansion. “Given traditional cloud players like, e.g., Amazon, Microsoft and Google have not responded formally with an announcement to expand to 40 locations, too – if SAP really cared for global coverage then there was not a better option than IBM’s cloud infrastructure that is powered by SoftLayer as well as IBM's Cloud Managed Services data centers, which IBM had built prior to the SoftLayer acquisition,” he said.

IBM and SAP said they are committed to security for enterprise customers in the cloud. The IBM Cloud provides visibility and control to enable enterprises to apply and extend their security best practices into a cloud environment. And the companies will now have additional reach and scale to more easily start locally and scale globally with cloud capabilities and also comply with data residency and other regulatory mandates.

Indeed, “The unique point of the deal between IBM and SAP is its size,” Charles King, principal analyst at Pund-IT, told eWEEK. “Both companies are major players in the enterprise IT space – some would say the biggest in their relative markets – and share numerous large global enterprises that stand to benefit from the SAP HANA Enterprise Cloud. The deal should benefit SAP by offering the company access to potential new customers and markets, and by presenting HANA in its best light. Given the magnitude of the agreement -- the service will eventually be available in 40 IBM cloud data centers worldwide, plus the other successes of its SoftLayer cloud infrastructure services, the company can rightfully claim to be the cloud platform of choice for global enterprises.”

In addition to its $1.2 billion cloud investment, IBM also invested $1 billion to create a cloud development platform, IBM Bluemix, to enable a new wave of innovation in building cloud apps for the enterprise. And the company created the IBM Cloud marketplace to enable business, IT and development professionals to tap into enterprise cloud services from IBM and its growing cloud ecosystem.


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