Since promiscuity is shared among top SaaS vendors and the big hyperscalers, it looks like Google Cloud is keen on cutting aggressively on Microsoft as the infrastructure partner SAP like best.
Recently, SAP CEO Christian Klein stated quite assertively that “it’s nice and wonderful that all the big hyperscalers-Amazon, Microsoft and Google Cloud-are forging tighter partnerships with SAP, those heavyweights need to remember that the partner controlling the strategic customer relationship is SAP.
In an interview with Den Howlett of diginomica.com, Klein said, “In the partnerships, we are closing, we have to own the business platform, we have to own the application layer.”
The primary issue is the fundamentally different range of technology in the cloud compared to traditional on-premises IT. In the old world, one class of companies develop the hardware. Another team, led by SAP, made the applications; since the applications were running the business process that powered the operations of global corporate, the applications companies led the customer relationships.
However, in the new era of enterprise cloud, those boundaries need to be erased. Two of the top three public cloud players- Microsoft and Google- also offer growing portfolios of enterprise applications. In contrast, the third and biggest cloud provider, Amazon’s AWS unit, does not currently offer enterprise applications.
For SAP, it means that two of the top public cloud providers (Microsoft and Google) on which SAP depends on to meet the infrastructure requirements of its large and mid-size customers are each looking to gain better control of how customers can use technology to transform, evolve and prosper.
If Microsoft and Google both are relatively in a similar position as Klein’s explicit insistence that SAP owns the customer relationship, then why do we believe that SAP is biased towards Google?
There might be many reasons, but we pick these three reasons behind such biased behavior in no particular order.
Google Cloud lacks a SaaS portfolio, whereas Microsoft has a massive and fast-growing SaaS portfolio.
The global presence of Window maker’s Dynamics 365 business come nowhere near to SAP’s vast installed business within most of the world’s largest organizations, it’s probably marching a $2-billion annualized run rate. Moreover, in the quarter ending March 31, Dynamics 365 business grew at a humongous rate of 49%, the company said.
Is Microsoft chase down to SAP as the ERP provider at the world’s largest energy companies, car companies, industrial giants and banks?
Na, not at all. At least not yet.
However, Satya Nadella does have plans of making Dynamics 365 a cornerstone of the company’s new cloud-to-edge strategy, moreover, an essential element for its AI-driven data-insights approach. Besides, Dynamics 365, which is very similar to SAP’s portfolio, has apps for everything from ERP to CRM and lots in between which is more vital to Microsoft’s rapidly growing cloud realm. Hence, as much as Klien values the partnership SAP and Microsoft formed about a year ago with the “Embrace” program, he is also passionately determined to protect SAP’s position as the world’s #1 provider of enterprise applications, specifically at these critical moments as many customers are racing towards the cloud.
Recent SAP and Google Cloud announcements underline a powerful partnership that is increasingly becoming more intimate – and more profitable.
Google Cloud recently provides a data center for SAP that will exclusively run SAP apps. It happened for the first time in the history of cloud computing that a public cloud provider gave an entire data center to a single SaaS vendor. Well, it’s quite a big step by Google. Here is a brief from how SAP described that distinctive data center: “SAP’s customers have had their business software applications running on hyperscale infrastructure or in SAP data centers for a while now. But they will soon also be able to see their applications running in this specific environment that combines both the strengths of SAP data centers and Google Cloud,” described by SAP senior VP Gary Slater in June post on Linkedin.
The latest data center in Frankfurt will offer the power of Google, which is dedicated only for the use of SAP. Since its an SAP only data center, the full capacity deployment is guaranteed for the use of SAP and its business lines. It includes the business software applications running in on this infrastructure. With SAP as the primary tenant for the data center facilities, the network, hardware, and hypervisor layers will only be used by SAP. Moreover, only SAP is allowed to use products, run workloads, and store and access data in that specific data center.
Well, that seems like a commitment and a huge one: highly, innovate, fearless, and very public.
A recent blog post called Future-proofing your business with Google Cloud and SAP revealed some fascinating insights from the Google Cloud side.
- For instance, have a look at the speed to value and innovation in these customer deployments of big-time projects: “Current market conditions are creating an even greater need for SAP customers to take advantage of cloud agility and innovation,” writes Snehanshu Shah, managing director for SAP at Google Cloud. He added, “Tory Burch was able to complete SAP S/4HANA development in 16 weeks and deployment in six weeks on Google Cloud. Carrefour Spain deployed SAP HANA in production in 15 weeks.”
- Overall, Shah wrote, “SAP users report a 65% reduction in the staff time to deploy or migrate SAP apps to Google Cloud.”
- Since SAP and Microsoft shared a deep Embrace at least for a while, now SAP and Google Cloud have developed a new program called Cloud Acceleration Program (CAP). In his blog post, Shah explained CAP as, a first-of-its-kind initiative empowering customers with solutions, guidance, and incentives from Google Cloud and their expert partner community. Customers will get access to expert capabilities for migration, implementation, optimization, and additional capabilities in analytics and machine learning. Google Cloud is also offering CAP participants an upfront financial aid to meet the infrastructure costs for SAP cloud migrations and help customers ensure that duplicate costs are not added during migration.
Impact Of Thomas Kurian
In the first 18 months as the CEO of Google Cloud, Thomas Kurian has reorganized, revitalized, and revamped every aspect of the Google Cloud business. Moreover, he is an inspiration for his colleagues to do the same.
The projects outlined above would never have existed under the previous leadership at Google Cloud. The view was too insular, too focused on mere technology and goods, too far from primary consumer concerns and too remote.
Kurian has made it possible to build things like an SAP-only data center by empowering his colleagues from one end of Google Cloud to the other to be genuinely focused on customers and have a strong sense of empathy for their companies, their problems, and their imperfect IT environments. Also, their initiatives like Customer Acceleration Program and many other undertakings have made Google Cloud the fastest-growing vendor and might help them to achieve their target of becoming #1 or #2 by 2023