In the world of enterprise IT, navigating from ‘point A’ to ‘point B’ isn’t always easy – particularly when the journey is one of digital transformation that involves moving to the cloud, and when failure – or just doing nothing – is not an option. Enterprise companies are increasingly moving business-critical systems to the cloud for the benefits digital transformation provides: better customer relationships, more empowered employees, streamlined operations, new business models, and new products and services.
Nevertheless, there are legacy systems to consider, conflicting advice from consultants and others, timing issues, security concerns, potential software and hardware incompatibilities and concerns about becoming locked in to a particular vendor. And that is just a partial list. The board and shareholders want reassurances over the return on equity, and the chief executive and line-of-business managers want to know whether the new systems will help support the business, enable them to innovate and compete more effectively with rivals, old and new.
As IDC, the IT market research firm notes: “Enterprises worldwide are contending with an accelerated pace of digitization where reliable and flexible information technology (IT) infrastructure could mean the difference between winning and losing customers. The groundbreaking agility, flexibility, simplicity, and power of cloud computing has businesses exploring ways to adopt cloud functionality and economics. Hybrid cloud deployments are the new norm.”
Overall, the global cloud IT market is expected to increase from $180 billion in 2015 to $390 billion in 2020, a 17% increase. In the same period, Software-as-a-Service (SaaS) -based apps are predicted to grow at an 18% compound average growth rate (CAGR), and Infrastructure/Platform-as-a-Service (IaaS/PaaS) is predicted to increase at a 27% CAGR according to Bain & Co.
Accelerating digital transitions
But for many business leaders, this transition still isn’t happening fast enough. According to research firm Gartner, 67% of CEOs say they want their organizations to “pick up the pace” of digital. And they need help to accelerate their digital transitions while making sense of the changes. Specifically, enterprises want choice, but they also need a roadmap, guidance and reassurance that the path they are embarking upon will deliver real value and the benefits in terms of flexibility, agility and the ability to innovate that they need to survive and thrive.
Most of all, they want to deal with trustworthy empathetic advisors and vendors who truly listen to their requirements, understand their businesses and work with them in partnership to solve problems, create new opportunities and co-innovate. For IT software and service providers like Microsoft and SAP, which have just announced an expanded partnership designed to address many of these issues, this is a huge opportunity, but it also underscores the company’s real commitment to listen to its customers.
The expanded partnership also makes solid sense for SAP and Microsoft. The two enterprise software market leaders share a long history of working together to deliver mutual benefits for the more than 37,000 thousand enterprise customers they share in common. Over the past two years, the partnership has included the ability for SAP customers to run SAP HANA, SAP’s in-memory database, on Microsoft Azure. In addition, SAP has linked SAP products such as those from Concur and SuccessFactors to Microsoft Office 365 to bring communications, collaboration, calendaring and all of the tools in Office 365 more directly into the SAP toolset and vice versa.
Now, as part of the expanded arrangement, Microsoft will deploy SAP S/4HANA on Azure to run its own internal finance processes, and SAP will move key internal business critical systems to Azure. The two companies are ‘walking the walk, as well as talking the talk. SAP is migrating more than a dozen business-critical systems to Azure for the optimal efficiencies, flexibility and innovation the platform offers. This includes the SAP S/4HANA system supporting one of its companies. SAP’s internal Project Management System is already running on Azure, and the rest of the migration is planned to be finished by the end of 2018.
Microsoft is transforming its existing financial systems – which include legacy SAP finance applications – and will implement SAP S/4HANA Central Finance running on Azure. Microsoft also plans to connect SAP S/4HANA to Azure AI and analytics services for more efficient financial reporting and more powerful decision-making. Both companies will document the internal projects to provide customers guidance and enterprise architecture for deployment of SAP applications on Azure. The resulting roadmap will provide a blueprint for customers making the same transition and boost their confidence in the outcome.
Choice and flexibility
While SAP believes the arrangement will help make it easier, faster and less challenging for customers to move their SAP applications onto Microsoft’s Azure cloud platform, executives emphasize that customers themselves should choose the public cloud platform that best suits their needs. Customers want choice when it comes to their cloud infrastructure provider. They want the best of both worlds – solutions by SAP, but with the flexibility to run on any of the leading public cloud platforms. SAP through their Cloud Innovation Partners will continue to support customer choice and cloud innovation.
Few doubt that cloud-based solutions will soon become the majority of every customer’s infrastructure portfolio, but for enterprise customer, the journey is often as important as the destination.
“Our ultimate goal is to not only provide amazing applications they can run in the cloud, but to make the transition to the cloud as easy as possible by offering choice and flexibility,” says Arlen Shenkmen, SAP’s head of Global Business Development and Ecosystems. “Today we take another step in that direction on behalf of our customers to provide them with a safe and trusted path to the cloud.”
