SAP steps again from S/4HANA-on-Azure desire

By | August 13, 2021

Microsoft Azure’s most popular standing for internet hosting S/4HANA seems to be coming to an finish. SAP, which has been recommending pairing its ERP suite with Azure as a part of a deal it struck with Microsoft, will now encourage clients to host S/4HANA wherever they need.

In line with SAP, the businesses’ Embrace partnership will now refocus on buyer selection. On the identical time, SAP is pushing a brand new approach to pay for its software program: a subscription-based, hosted providing that it calls “Rise with SAP,” which shall be within the highlight at its Sapphire Now 2021 buyer occasion in June.

“On the underlying infrastructure, Azure is a giant companion for Rise, however we’ve got expanded right here our help for the opposite hyperscaler suppliers, AWS and Google and Alicloud,” mentioned Jan Gilg, president for SAP S/4HANA.

The partnership with Microsoft will proceed, he mentioned, “particularly on the appliance layer.”

In January SAP and Microsoft introduced plans to combine Microsoft Groups with SAP’s ERP, HR, and CRM purposes. Prospects shall be presenting their expertise of that integration at Sapphire Now.

The Embrace undertaking began out in Could 2019 as a method for SAP to advertise a reference structure for companions to maneuver its purposes to the cloud, internet hosting them both with Amazon Internet Companies, Google Cloud Platform, or Microsoft Azure.


In October that very same 12 months, nonetheless, it turned a partnership between SAP and Microsoft, with Microsoft agreeing to resell parts of SAP Cloud Platform alongside Azure, and SAP deciding on Microsoft Azure as its most popular cloud companion.

The Azure gross sales portion of that relationship will finish on June 30, 2021, David Robinson, managing director of SAP’s buyer success workplace, informed Enterprise Insider. That’s over a 12 months sooner than initially agreed.

A partnership imbalance

In apply, SAP’s desire for Azure wasn’t all that sturdy, and it continued to assist clients migrate their purposes to different clouds, Robinson informed Insider.

That’s borne out by others, too. “We didn’t see SAP pushing Azure,” mentioned Len Riley, a apply chief at UpperEdge, a consultancy that advises enterprises on IT sourcing.

Inside SAP, executives felt the deal was one-sided in one other method.

In its authentic imaginative and prescient for the Embrace undertaking, SAP hoped that by working extra intently with all of the hyperscalers to maneuver its workloads to the cloud, it could have a possibility to upsell different purposes and companies to their joint clients, in accordance with one former SAP govt who labored there on the time.

“We needed a seat on the desk,” mentioned the chief.

The choice to then make Microsoft a most popular companion was puzzling to this govt: “Microsoft was probably the most aggressive with us. They’ve Dynamics 365.”

Whereas SAP gross sales employees would inform clients Microsoft was their most popular cloud companion, Microsoft gross sales employees would attempt to edge SAP colleagues out of their conversations with clients, this govt mentioned. “It turned a turf battle.”

As one other ex-SAP govt with data of the Embrace deal mentioned: “SAP bought left behind, and Microsoft bought account management.” That, mentioned the chief, gave Microsoft the chance to chip away on the non-core performance that SAP supplied, equivalent to CRM or HCM.

Reasserting buyer management

Microsoft has an even bigger seat on the desk than SAP at most of their joint enterprise clients, as a result of along with infrastructure-as-a-service, it additionally sells them collaboration and desktop software program, in accordance with UpperEdge’s Riley.

SAP’s affect over its clients waned following the departure of former CEO Invoice McDermott, now at ServiceNow, the ousting of co-CEO Jen Morgan, and lack of President of Cloud Enterprise Rob Enslin to an analogous position at Google, Riley mentioned. “The facility that McDermott needed to actually decide up the telephone and get into the C-suite, it was computerized,” he mentioned. “Nobody mentioned no to that assembly.”

Via the launch of Rise with SAP, the subscription-based hosted providing that may be pitched on to the CEO, “I believe they needed to attempt to re-establish account management,” mentioned Riley.

In apply, although, the all-in-one enterprise software-as-a-service mannequin pioneered by is extra more likely to attraction to midmarket clients, he added. “On the enterprise stage, the place they want to have direct relationships with the hyperscalers and handle the appliance help internally or by a companion, a TCS or a Cognizant, I believe SAP goes to battle to penetrate the market at that stage with Rise.”