IBM and SAP announce partnership to accelerate enterprise cloud adoption
Published October 14, 2014
The momentum around IBM Cloud has grown exponentially over the last year with the acquisition of SoftLayer and the launch of its Bluemix platform for application development. Big Blue also touts a 50 percent increase in its cloud revenue this year.
Today, IBM and SAP announced that they have signed what IBM calls the industry’s largest cloud deal—and the biggest win for IBM Cloud to date. SAP has selected IBM as a premier strategic provider of cloud infrastructure services for its business critical applications and is now delivering SAP® HANA Enterprise Cloud offerings through IBM’s scalable, open and secure cloud.
“With this agreement, IBM has clearly become the global enterprise cloud platform, providing large companies and mainstream business with access to SAP’s complex and business-critical applications via the IBM Cloud,” says Jan Jackman, Vice President, Global Cloud Services at IBM. This deal, explains Jackman, will triple SAP’s cloud capacity and generate an entirely new source of revenue for IBM in the cloud.
In addition, SAP HANA Enterprise Cloud plans to expand to major markets with the addition of the IBM Cloud data centers, which will enable customers to deploy their SAP software around the globe in a faster and more secure environment via the IBM Cloud for better speed, transparency, and control.
This first-of-a-kind deal brings together two giants of the technology industry. “SAP needs to drive their HANA and their SAP cloud initiative globally to meet their financial objectives. Given IBM’s existing cloud footprint globally and continued investment, IBM Cloud provided a way to accelerate their HANA Enterprise Cloud initiative faster through this partnership,” explains Jackman. “SAP evaluated a number of top cloud providers in making their selection based on their clients’ requirements to run enterprise class applications, and IBM met those needs.”
IBM’s cloud computing revenue continues to accelerate—in 2013 Big Blue reported cloud revenue of $4.4 billion, up 69 percent year-to-year. In the first quarter of 2014, revenue increased 50 percent quarter-over-quarter; and in Q2, IBM reported that cloud revenue was up more than 50 percent year-to-date and that the annual run-rate for cloud delivered as a service was up nearly 100 percent to $2.8 billion year-to-year.
Jan Jackman, Vice President, Global Cloud Services at IBM, explains that IBM has made significant investments this year to build a comprehensive cloud portfolio. "Our partnership with SAP is the latest example of how we are extending IBM’s leadership in enterprise cloud, building on several strides and investments that we made earlier this year," she says.
Here is a timeline of those investments:
- January 2014: IBM announced a $1.2 billion investment to expand IBM’s global cloud footprint. "We plan to deliver cloud services from 40 data centers worldwide in 15 countries and five continents, including North America, South America, Europe, Asia and Australia. Among the newest data centers to launch are China, Washington, D.C., Hong Kong, London, Japan, India, Canada, Mexico City and Dallas," says Jackman.
- January 2014: Also in January, IBM announced a $1 billion investment in launching the new Watson Business unit with Watson running on SoftLayer. As part of this initiative IBM will engineer Watson to be deployed on SoftLayer—for its scale, higher performance, and transparency needed to manage mission critical workloads.
- February 2014: IBM announced plans to invest $1 billion in BlueMix PaaS. Built on the open standards foundation of Cloud Foundry and powered by SoftLayer, BlueMix became generally available in Q2 2014. "Bluemix offers cloud-based services and APIs to developers in an integrated platform that allows them to mix and match different tools to build apps in the cloud for mobile, web, big data, analytics, and more," she says.
- April 2014: IBM launched a new cloud marketplace that "brings together IBM’s vast portfolio of cloud capabilities and new third-party services in a way that delivers a simple and easy experience for the enterprise with the security and resiliency they expect."
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"[This] partnership will generate new revenue streams for both IBM and SAP, allowing us to reach new markets and new client segments, and to accelerate the transformation of our clients’ applications for the cloud era,” says Jackman. “Cloud is the equalizer, as with a consumption-based model, clients of all sizes now have access to enterprise class applications like SAP.”
"We look forward to extending one of the longest and most successful partnerships in the IT industry,” said Bill McDermott, CEO of SAP. “The demand for SAP HANA and the SAP Business Suite on SAP HANA in the cloud is tremendous, and this global agreement with IBM heralds a new era of cloud collaboration. We anticipate customers will benefit from this collaboration and expansion of SAP HANA Enterprise Cloud."
With SAP HANA running on IBM Cloud, customers will have access to an open standards-based approach that will help easily integrate existing technology investments with new workloads, says IBM. IBM Cloud also provides SAP customers the visibility and control to enable enterprises to apply and extend their security best practices into a cloud environment. The reach and scale provided by the cloud will allow customers to more easily start locally and scale globally as well as comply with data residency and other regulatory mandates.
“This announcement is a significant milestone in the deployment of enterprise cloud,” said IBM Chairman, President and CEO Ginni Rometty. “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.