In a follow up move to its announced partnership from May this year, Microsoft and SAP extended their partnership to the HR area, something that could have been expected, but was not necessarily a given when considering the complex multi-vendor landscape both on the SaaS and the IaaS landscape.
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But let’s dissect the press release in our customary style, it can be found here:
MyPOV – Good summary, correctly referring to an ‘expanded’ partnership. The timeframe of five years seems to be pretty long, but both vendors have been found to be conservative, when it comes to timelines. The concern is that 5 years is the ‘half time’ of a good architecture, so whatever SAP will use as the base for the cutoff to support Azure – it will take some time and the platform may have some years of age already. Good to see the focus on global, where Azure is doing well and that is crucial from a data residency perspective for many customers.
MyPOV – Good statement of new on board head of worldwide commercial business, Judson Althoff.
MyPOV – Good to learn something about the start – and its conservative – with demo environments. Demo environments are a typical first use case for similar exercises, as they are not critical from a production grade perspective. But certainly critical for the success of a vendor, and with rising demo needs and demand (e.g. from SAP SuccessFactors Partner for Profit program) – it is key for SAP to find a cheap, elastic demo platform. At the same time the create, demo and throw away nature of demo environments give Microsoft and SAP plenty of chances to learn to setup these environments, something important for the next step that usually is development and test (see e.g. where Workday is with IBM here) and then off to the ultimate goal – production. Again rightfully the press release quotes Microsoft’s coverage of large enterprises, when they are comfortable to run Office on a IaaS, they will most likely be comfortable to run HR systems on the same IaaS, too.
MyPOV – Good quote of Ettling, touting growth of SuccessFactors. And one of the first areas where vendors feel growth pain is… demo systems and the pieces are adding up here. Demo systems and sand boxes are vital tools for vendors to ramp up their pipeline, something that SAP SuccessFactors is working hard to do at the moment, especially when it is done via the partner channel (also the case).
MyPOV – A ‘well we have been doing this since a longtime’ paragraph – that is often found in press releases, when vendors want to show continuity, experience working together and generally make the partnership look like a big deal. Wasn’t necessary in my view, as he first pick of an IaaS by SAP SuccessFactors would be enough of headlines, but so be it. The HANA statement is key, as SuccessFactors is under the ‘Hasso Mandate’ of moving to HANA, and if Azure had not been able to run HANA, some observers would have questioned it… but that’s not the case with Azure’s recent commitment to large memory instances… and that is essential to capture long term SAP load to move to Azure. Once the SAP customers move, they most likely will be on HANA based systems on premises, or move to HANA based systems in the cloud, Microsoft wants to make it a move to Azure.
For customers this is generally good news. Instead of waiting for their enterprise software vendor to figure out IaaS (or not), they can move to the cloud with the help of an IaaS provider who runs cloud infrastructure for a living. An alignment with other load of the enterprise will be of course welcome, as too much fragmentation across too many IaaS provider can quickly become a headache from a performance, compliance and commercial perspective. The good news for here is that most enterprises will be in Azure due to Office gravitas one way or the other. On the concern side customers need to pay more attention now to their SaaS vendors not picking up dependencies on specific cloud infrastructures – as it will limit future portability. For SaaS vendors eager to expand their functionality e.g. in the areas of Machine Learning and AI, this maybe a tradeoff they may be happy to take in the short term, but for customers it is something they may not want to live with middle or long term. So customers need to pay attention to the IaaS capability uptake of your SaaS vendors, in this case e.g. SuccessFactors using capabilities that only Azure offers.
But let’s dissect the press release in our customary style, it can be found here:
REDMOND, Wash. – Oct. 18, 2016 – Microsoft Corp. on Tuesday announced an expanded partnership with SAP to provide public cloud services for the SAP® SuccessFactors® HCM Suite. SAP will make its cloud-based human capital management solutions available on Microsoft Azure over the next five years. This is SAP’s first move to supplement its own infrastructure and operate SAP SuccessFactors solutions in a third-party public cloud, recognizing the experience both companies have in supporting global enterprise clients. With the addition of Azure, SAP has a trusted, global cloud and a powerful data platform to help it drive companies’ human resources transformation, and the potential to dramatically improve business outcomes.
MyPOV – Good summary, correctly referring to an ‘expanded’ partnership. The timeframe of five years seems to be pretty long, but both vendors have been found to be conservative, when it comes to timelines. The concern is that 5 years is the ‘half time’ of a good architecture, so whatever SAP will use as the base for the cutoff to support Azure – it will take some time and the platform may have some years of age already. Good to see the focus on global, where Azure is doing well and that is crucial from a data residency perspective for many customers.
“Microsoft and SAP share a commitment to empowering digital transformation across every aspect of business,” said Judson Althoff, executive vice president, Worldwide Commercial Business at Microsoft. “The combination of SAP’s market-leading, innovative human capital management solutions with Microsoft’s intelligent cloud will equip companies around the world to help maximize the potential and skills of their most valuable asset, their people.”
MyPOV – Good statement of new on board head of worldwide commercial business, Judson Althoff.
SAP will have significant additional capacity to run operational workloads of SAP SuccessFactors solutions on Azure, beginning with demo environments, to support its continuing client user growth. Azure provides enterprise-grade security, an open developer platform and advanced data services that organizations of all kinds can use to innovate and grow. With nearly 90 percent of the Fortune 500 as customers, the Microsoft Cloud is offered in more worldwide datacenter regions than any other major cloud provider.
MyPOV – Good to learn something about the start – and its conservative – with demo environments. Demo environments are a typical first use case for similar exercises, as they are not critical from a production grade perspective. But certainly critical for the success of a vendor, and with rising demo needs and demand (e.g. from SAP SuccessFactors Partner for Profit program) – it is key for SAP to find a cheap, elastic demo platform. At the same time the create, demo and throw away nature of demo environments give Microsoft and SAP plenty of chances to learn to setup these environments, something important for the next step that usually is development and test (see e.g. where Workday is with IBM here) and then off to the ultimate goal – production. Again rightfully the press release quotes Microsoft’s coverage of large enterprises, when they are comfortable to run Office on a IaaS, they will most likely be comfortable to run HR systems on the same IaaS, too.
“SAP SuccessFactors is the fastest growing core HR solution, and offers an unmatched depth and breadth across the entire HCM suite, of any vendor in the industry,” said Mike Ettling, president of SAP SuccessFactors. “We’ve seen exponential growth in the past two years, with 42 million users now benefiting from our market-leading solutions. In selecting Azure, we will be able to expand our reach even further, with the reliability that is required of these mission-critical applications, and continue to innovate and enhance services to meet client needs across additional environments.”
MyPOV – Good quote of Ettling, touting growth of SuccessFactors. And one of the first areas where vendors feel growth pain is… demo systems and the pieces are adding up here. Demo systems and sand boxes are vital tools for vendors to ramp up their pipeline, something that SAP SuccessFactors is working hard to do at the moment, especially when it is done via the partner channel (also the case).
This deal builds on the longstanding partnership between Microsoft and SAP, including integrations between Office 365 and SAP SuccessFactors HCM Suite, as well as SAP Fieldglass® Vendor Management System, SAP Ariba® and Concur® solutions. The Microsoft and SAP partnership also includes broad support for the SAP HANA® platform on Azure to enable companies to deliver mission-critical applications and data analytics from the cloud. Microsoft recently announced the general availability of Azure large instances, hardware configurations specifically designed for the largest and most demanding SAP workloads. SAP now enables its customers to build and deploy custom mobile hybrid SAP Fiori® apps on SAP HANA Cloud Platform that can be managed, deployed and protected with Microsoft Intune.
MyPOV – A ‘well we have been doing this since a longtime’ paragraph – that is often found in press releases, when vendors want to show continuity, experience working together and generally make the partnership look like a big deal. Wasn’t necessary in my view, as he first pick of an IaaS by SAP SuccessFactors would be enough of headlines, but so be it. The HANA statement is key, as SuccessFactors is under the ‘Hasso Mandate’ of moving to HANA, and if Azure had not been able to run HANA, some observers would have questioned it… but that’s not the case with Azure’s recent commitment to large memory instances… and that is essential to capture long term SAP load to move to Azure. Once the SAP customers move, they most likely will be on HANA based systems on premises, or move to HANA based systems in the cloud, Microsoft wants to make it a move to Azure.
Overall MyPOV
We live in the ‘age of the load landgrab’ – which is the fight of IaaS providers like Microsoft Azure here, to capture on premises load (here from SAP). That gets overlaid by SaaS load that is looking for a new home due to a generational or platform update (here SuccessFactors moving to HANA and maybe some more things) and fueled by even large enterprise vendors like SAP, to not put up the CAPEX needed for large datacenter / IaaS rollouts. On the flipside IaaS providers (here Microsoft Azure) are more than willing to put in the CAPEX as they are bound for growth no matter what at the moment and any uniform load from on premises software or SaaS software is highly welcome, in comparison to one customer at a time projects. And SAP signaled already at Sapphire this year that its own IaaS ambitions have been scaled down (see my blog here), as the partnership with Azure was already announced in May, this is the conjugation of this very partnership towards SAP SuccessFactors load.For customers this is generally good news. Instead of waiting for their enterprise software vendor to figure out IaaS (or not), they can move to the cloud with the help of an IaaS provider who runs cloud infrastructure for a living. An alignment with other load of the enterprise will be of course welcome, as too much fragmentation across too many IaaS provider can quickly become a headache from a performance, compliance and commercial perspective. The good news for here is that most enterprises will be in Azure due to Office gravitas one way or the other. On the concern side customers need to pay more attention now to their SaaS vendors not picking up dependencies on specific cloud infrastructures – as it will limit future portability. For SaaS vendors eager to expand their functionality e.g. in the areas of Machine Learning and AI, this maybe a tradeoff they may be happy to take in the short term, but for customers it is something they may not want to live with middle or long term. So customers need to pay attention to the IaaS capability uptake of your SaaS vendors, in this case e.g. SuccessFactors using capabilities that only Azure offers.
It also marks an inflection point that a 'born in the cloud' load like SuccessFactors is looking for its next 'home' - no longer in its own cloud infrastructure, but looking for a stand alone IaaS partner, in this case Azure. Those options were not around for the early SaaS pioneers, who all sit on aging, often proprietary or now 'frenemy' platforms, moving to a partner's IaaS should free up CAPEX resources and ultimately provide a better return of R&D to SaaS vendors making the move, which should translate either in (higher) profitability and / or more functionality in the product. Both are positive developments for a SaaS vendor's customers.
But for now good to see the continuity of the Microsoft / SAP partnership, at the moment it’s a win / win / win for customers who get more live software demos and likely more sand boxes (always ask for them), Microsoft gets a shot at more SAP SuccessFactors load, starting with demo systems and SAP SuccessFactors gets a lot of demo environments and a proven IaaS partner (that SAP overall had chosen already before).
Stay tuned for more on this and more enterprise vendor / SaaS player with IaaS player partnerships, below are a few of the most recent and prominent ones.
More Apps / SaaS vendor and IaaS vendor partnerships (in chronological order):
More on Microsoft
But for now good to see the continuity of the Microsoft / SAP partnership, at the moment it’s a win / win / win for customers who get more live software demos and likely more sand boxes (always ask for them), Microsoft gets a shot at more SAP SuccessFactors load, starting with demo systems and SAP SuccessFactors gets a lot of demo environments and a proven IaaS partner (that SAP overall had chosen already before).
Stay tuned for more on this and more enterprise vendor / SaaS player with IaaS player partnerships, below are a few of the most recent and prominent ones.
More Apps / SaaS vendor and IaaS vendor partnerships (in chronological order):
- Infor runs on Amazon AWS (read here)
- SAP on IBM Cloud (read here)
- Lumesse on Salesforce Cloud (read here) and
- NetSuite on Microsoft Azure (read here)
- JDA chooses Google Cloud Platform (read here)
- SAP chooses Microsoft Azure (read here)
- Salesforce chooses AWS (read here)
- GE chooses Azure for Predix (read here)
- SAP choses AWS for BW/4HANA (read here)
- Workday chooses IBM (read here)
- Adobe chooses Azure (read here)
- First Take - Microsoft Ignite - AI, Adobe and FPGA [From the Fences] - read here
- News Analysis - GE and Microsoft partner to bring Predix to Azure - Multi-Cloud becomes tangible for IoT - read here
- Market Move - Microsoft acquired Linked - Tons of synergies, start with Cortana, maybe too many - read here
- News Analysis - Microsoft opens Windows Holographic to partners for a new era of mixed reality - read here
- News Analysis - SAP and Microsoft usher in new era of partnership to accelerate digital transformation in the cloud - read here
- Musings - Will Microsoft's Hololens transform the Future of Work? Read here
- Event Report - Microsoft Build 2016 - A platform vision and plenty of tools for next generation applications - read here
- First Take - Microsoft Build 2016 - Day 1 Keynote Takeaways - read here
- Event Preview - Microsoft Build 2016 - Top 3 Things to watch for developers, managers and execs... read here
- News Analysis - Microsoft - New Hybrid Offerings Deliver Bottomless Capacity for Today's Data Explosion - read here
- News Analysis - Welcoming the Xamarin team to Microsoft - read here
- News Analysis - Microsoft announcements at Convergence Barcelona - Office365. Dynamics CRM and Power Apps
- News Analysis - Microsoft expands Azure Data Lake to unleash big data productivity - Good move - time to catch up - read here
- News Analysis - Microsoft and Salesforce Strengthen Strategic Partnership at Dreamforce 2015 - Good for joint customers - read here
- News Analyis - NetSuite announced Cloud Alliance with Microsoft - read here
- Event Report - Microsoft Build - Microsoft really wants to make developers' lives easier - read here
- First Hand with Microsoft Hololens - read here
- Event Report - Microsoft TechEd - Top 3 Enterprise takeaways - read here
- First Take - Microsoft discovers data ambience and delivers an organic approach to in memory database - read here
- Event Report - Microsoft Build - Azure grows and blossoms - enough for enterprises (yet)? Read here.
- Event Report - Microsoft Build Day 1 Keynote - Top Enterprise Takeaways - read here.
- Microsoft gets even more serious about devices - acquire Nokia - read here.
- Microsoft does not need one new CEO - but six - read here.
- Microsoft makes the cloud a platform play - Or: Azure and her 7 friends - read here.
- How the Cloud can make the unlikeliest bedfellows - read here.
- How hard is multi-channel CRM in 2013? - Read here.
- How hard is it to install Office 365? Or: The harsh reality of customer support - read here.
And more on SAP:
And more about SAP technology:
Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here.- Event Report - SAP / Trenitalia Digital Summit - SAP is serious about IoT - read here
- First Take - SAP BW/4HANA - Data Gravity and Cloud win - read here
- Event Report - SAP SuccessFactors SConnect - Push on all fronts - read here
- Event Report - SAP Insider Vienna - HCP, BI and SuccessFactors are the takeaways - read here
- Event Report - SAP Sapphire 2016 - Top 3 Positives & Concerns: SAP changes - probably for the better - read here
- First Take - SAP Sapphire Day #2 Keynote - read here
- News Analysis - SAP and Microsoft usher in new era of partnership to accelerate digital transformation in the cloud - read here
- First Take - SAP Sapphire Bill McDermott Day #1 Keynote - read here
- Event Preview - SAP Sapphire 2016 - What to expect and look for - read here
- News Analysis - Apple & SAP Partner to Revolutionize Work on iPhone & iPad - read here
- Progress Report - SAP SuccessFactors makes good progress - now needs appeal beyond SAP - read here
- News Analysis - SAP HANA Vora now available... - A key milestone for SAP - read here
- Event Report - SAP Ariba Live - Make Procurement Cool Again - read here
- News Analysis - SAP SuccessFactors innovates in Performance Management with continuous feedback powered by 1 to 1s - read here
- Event Report - SAP SuccessFactors SuccessConnect - Good Progress sprinkled with innovative ideas and challenging the status quo - read here
- News Analysis - WorkForce Software Announces Global Reseller Agreement with SAP - read here
- First Take - SAP SuccessFactors SuccessConnect - Day #1 Keynote Top 3 Takeaways - read here
- News Analysis - SAP SuccessFactors introduces Next Generation of HCM software - read here
- News Analysis - SAP delivers next release of SAP HANA - SPS 10 - Ready for BigData and IoT - read here
- Event Report - SAP Sapphire - Top 3 Positives and Concerns - read here
- First Take - Bernd Leukert and Steve Singh Day #2 Keynote - read here
- News Analysis - SAP and IBM join forces ... read here
- First Take - SAP Sapphire Bill McDermott Day #1 Keynote - read here
- In Depth - S/4HANA qualities as presented by Plattner - play for play - read here
- First Take - SAP Cloud for Planning - the next spreadsheet killer is off to a good start - read here
- Progress Report - SAP HCM makes progress and consolidates - a lot of moving parts - read here
- First Take - SAP launches S/4HANA - The good, the challenge and the concern - read here
- First Take - SAP's IoT strategy becomes clearer - read here
- SAP appoints a CTO - some musings - read here
- Event Report - SAP's SAPtd - (Finally) more talk on PaaS, good progress and aligning with IBM and Oracle - read here
- News Analysis - SAP and IBM partner for cloud success - good news - read here
- Market Move - SAP strikes again - this time it is Concur and the spend into spend management - read here
- Event Report - SAP SuccessFactors picks up speed - but there remains work to be done - read here
- First Take - SAP SuccessFactors SuccessConnect - Top 3 Takeaways Day 1 Keynote - read here.
- Event Report - Sapphire - SAP finds its (unique) path to cloud - read here
- What I would like SAP to address this Sapphire - read here
- News Analysis - SAP becomes more about applications - again - read here
- Market Move - SAP acquires Fieldglass - off to the contingent workforce - early move or reaction? Read here.
- SAP's startup program keep rolling – read here.
- Why SAP acquired KXEN? Getting serious about Analytics – read here.
- SAP steamlines organization further – the Danes are leaving – read here.
- Reading between the lines… SAP Q2 Earnings – cloudy with potential structural changes – read here.
- SAP wants to be a technology company, really – read here
- Why SAP acquired hybris software – read here.
- SAP gets serious about the cloud – organizationally – read here.
- Taking stock – what SAP answered and it didn’t answer this Sapphire [2013] – read here.
- Act III & Final Day – A tale of two conference – Sapphire & SuiteWorld13 – read here.
- The middle day – 2 keynotes and press releases – Sapphire & SuiteWorld – read here.
- A tale of 2 keynotes and press releases – Sapphire & SuiteWorld – read here.
- What I would like SAP to address this Sapphire – read here.
- Why 3rd party maintenance is key to SAP’s and Oracle’s success – read here.
- Why SAP acquired Camillion – read here.
- Why SAP acquired SmartOps – read here.
- Next in your mall – SAP and Oracle? Read here
- Event Prieview - SAP TechEd 2015 - read here
- News Analysis - SAP Unveils New Cloud Platform Services and In-Memory Innovation on Hadoop to Accelerate Digital Transformation – A key milestone for SAP read here
- HANA Cloud Platform - Revisited - Improvements ahead and turning into a real PaaS - read here
- News Analysis - SAP commits to CloudFoundry and OpenSource - key steps - but what is the direction? - Read here.
- News Analysis - SAP moves Ariba Spend Visibility to HANA - Interesting first step in a long journey - read here
- Launch Report - When BW 7.4 meets HANA it is like 2 + 2 = 5 - but is 5 enough - read here
- Event Report - BI 2014 and HANA 2014 takeaways - it is all about HANA and Lumira - but is that enough? Read here.
- News Analysis – SAP slices and dices into more Cloud, and of course more HANA – read here.
- SAP gets serious about open source and courts developers – about time – read here.
- My top 3 takeaways from the SAP TechEd keynote – read here.
- SAP discovers elasticity for HANA – kind of – read here.
- Can HANA Cloud be elastic? Tough – read here.
- SAP’s Cloud plans get more cloudy – read here.
- HANA Enterprise Cloud helps SAP discover the cloud (benefits) – read here