SAP and IBM Roll Out SAP Business Suite and HANA on SoftLayer Cloud

Deal triples cloud data center capacity for delivering SAP products as a service

Jason Verge

October 14, 2014

2 Min Read
SAP and IBM Roll Out SAP Business Suite and HANA on SoftLayer Cloud
Bill McDermott, CEO, SAP, speaking at the company’s Sapphire Now conference in Orlando, Florida, in 2014. (Photo: SAP AG)

Enterprise technology giants IBM and SAP have partnered to provide the latter's business software and in-memory data analytics platform on top of the former's cloud infrastructure.

SAP's Business Suite and HANA, its high-performance analytics solution, will now be available as a service offered through the IBM SoftLayer cloud.

The deal gives SAP IBM’s global cloud data center footprint, tripling the German software giant's capacity to deliver its services in the cloud. IBM gains another valuable enterprise offering and a potential source of new revenue for its growing cloud business.

SAP's business apps and HANA cloud services are also available as certified for Amazon Web Services, a major competitor to IBM SoftLayer. The IBM cloud is arguably more tuned toward big enterprises, however, emphasizing security, transparency and control over where data resides.

SAP and IBM have a longstanding relationship, but up to this point the partnership was mainly around SAP for on-premises IBM or pre-production cloud. The new services are for production-ready implementations of the business suite and the addition of the real-time analytics through in-memory computing capabilities of HANA.

There are also integration benefits. IBM is pushing an open-standards-based approach to its cloud to create a foundation for easier integration of existing technology investments with new workloads.

“Our secure, open, hybrid enterprise cloud platform will enable SAP clients to support new ways to work in an era shaped by big data, mobile and social," IBM CEO Ginni Rometty said in a statement.

Momentum strong for IBM cloud

IBM's cloud business has seen strong momentum recently. The company now touts nearly all top 50 of the Fortune 500 as its cloud customers, and industry analysts have placed it high in the rankings among other providers in the space.

IDC has its cloud as the top offering in six of the eight major industries covered in a recent study. It finished in the top three for the other two industries. Synergy Research Group ranks IBM as second behind Microsoft's cloud business in terms of year-to-year growth at 80 percent compared to same time last year.

IBM investment in cloud is in the tens of billions. Its cloud initiative really started following $7 billion in key acquisitions.

The $2 billion acquisition of SoftLayer served as cornerstone. The company followed the deal with a $1.2 billion investment to expand its SoftLayer footprint this year in several major markets, the latest in Melbourne, Australia.

It has committed $1 billion to IBM Bluemix, its Platform-as-a-Service and made significant investment in commercializing Watson, the cognitive computing technology.

So far revenue growth in cloud has been solid. Q2 2014 saw IBM's cloud revenue up over 50 percent, with its “as-a-service” business doubling once again. SoftLayer contributed about one point to Global Transaction Services (GTS) revenue growth in the same quarter.

For all things delivered as a service, second quarter annual run rate is up nearly 100 percent to $2.8 billion year-over-year in Q2. Software-as-a-Service offerings grew by nearly 40 percent.

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