The deal, disclosed in SAP's recent third quarter financial update, will see Microsoft contributing 18 percentage points to a 39 percent year-over-year growth for its cloud bookings.
The partnership aims to solve one of SAP customers most common pain points, that it is challenging to move from SAP's on-premise model to remote servers.
- SAP wants to power the next generation of IoT
- Databases are migrating to the cloud
- Microsoft Azure now lets you set up your own private servers
In a call with investors, SAP co-CEO Jennifer Morgan explained how the company's deal with Microsoft will work, saying:
“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.”
SAP and Microsoft
Although the deal will see Microsoft and SAP work together to help businesses move their data to the cloud, it is not exclusive. SAP plans to continue working with other cloud giants such as Amazon and Google according to Morgan, who said:
“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.”
SAP has worked with Microsoft in the past and last year, the two companies together with Adobe announced a partnership to take the massive amount of data generated by their customers and bring it together into one package running on Azure. The three companies also worked together on last year's Open Data Initiative. Additionally, back in 2016, the SAP and Microsoft reached a deal to integrate software and bring SAP business databases to Azure.
SAP's new partnership with Microsoft comes at an important time for the company after a major leadership change which saw CEO Bill McDermott step down and he was replaced by co-CEO Jennifer Morgan and Christian Klein.
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