Microsoft and SAP compete against Amazon in cloud market space

In an effort to compete with Amazon in the cloud market space, Microsoft announced it is expanding its partnership with German enterprise software company SAP. The companies will deploy each other’s cloud solutions internally, and encourage joint support services to run SAP software on Azure cloud services.

The companies have been working to run SAP business software on Azure for a number of years. Microsoft announced in 2014 a string of SAP’s core business applications would be certificated on Azure. Both companies agreed 18 months ago to collaborate to combine Microsoft Office 365 into SAP. By the same token, SAP agreed to run its HANA database software on Azure.

As part of the agreement, Microsoft said it will deploy SAP’s S/4 HANA on Azure to help run its internal finance processes. SAP will migrate its internal critical system to Azure. Moreover, SAB Ariba is in the process of leveraging Azure and exploring usage within its procurement applications.

“As technology transforms every business and every industry, organizations are looking for the right platforms and trusted partners to help accelerate their digital transformation,” said Satya Nadella, CEO of Microsoft. “Building on our longtime partnership, Microsoft and SAP are harnessing each other’s products to not only power our own organizations, but to empower our enterprise customers to run their most mission-critical applications and workloads with SAP S/4HANA on Azure.”

Microsoft and SAP said they will document their internal projects to help customers launch SAP applications. The companies share customers such Coca-Cola Company, Columbia Sportswear Company and Costco Wholesale Group.

Over the past couple years, Microsoft has increased its effort to get major software vendors to run their software and services on Azure. The collaboration between the two companies has the potential to boost Microsoft’s and shrink Amazon’s share of the cloud market pie. Amazon currently controls nearly 50% of the current cloud computing market.

According to SAP Chief Executive Bill McDermott, customers frequently ask the company which technology they should use. Although, McDermott didn’t say the company would always recommend Azure against competitors like Amazon Web Services (AWS).

“We are taking our partnership to the next level with this new capability to run SAP S/4HANA in the Microsoft Azure environment,” said McDermott. “The world’s significant businesses trust Microsoft and SAP. Together, we will help companies win the customer-driven growth revolution.”

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