SAP Preps For Cloud Future Via New Intel Partnership

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Global CIO: SAP Preps For Cloud Future Via New Intel Partnership

SAP's enhanced research alliance with Intel will accelerate its move into cloud computing and SaaS and strengthens the set of SAP partners trying to shape the future of enterprise software.
By Bob Evans, InformationWeek
October 20, 2009 08:00 AM

Oh, the company you keep: yesterday, as we were making the case that SAP is outpacing Oracle in forging key strategic alliances, SAP got closer to another key partner by joining with Intel to open a new laboratory focused on cloud computing and sustainable IT.

Was the Intel agreement really a big deal? Well, big enough that Intel CTO and senior fellow Justin Rattner, who is also director of Intel's Corporate Technology Group, wrote about it glowingly on the Research@Intel blog. More on that in a moment.

This extended alliance gives SAP a lineup of top-level strategic partners that now includes Intel, IBM, Hewlett-Packard, and Microsoft. Oracle, in the final stages of acquiring Sun, made public peace last week with Salesforce.com and reinforced its affinity with Dell; plus, in recent weeks, Oracle CEO Larry Ellison has said he and HP CEO Mark Hurd remain on good terms and work together on many efforts in spite of their heightened competition on a number of other fronts.
In laying out those strategic alignments yesterday, I argued that they should not be confused with some sort of superficial popularity contests. Rather, they help define the capabilities and the momentum that each company has behind it in their competition for the hearts and wallets of global CIOs in enterprises around the world: which enterprise-software giant's deep alliances will help it extend its capabilties beyond the current limited model and into more-advanced, more-nimble, and more-capable platforms?

Here's what Intel tech visionary Rattner said about his company's newly extended relationship with SAP:

I was in Northern Ireland today to announce the opening of a new joint laboratory with SAP focused on Cloud Computing and Sustainable IT. The SAP and Intel Collaboratory, as it's called, will be located at SAP's research center at the Titanic Quarter in Belfast. . . . The Collaboratory represents the natural progression of the research relationship between SAP and Intel. Its charter is to understand and drive enterprise computing in Europe such as Cloud Computing and Software-as-a-Service or SaaS. . . . The implications of this shift touch almost every aspect of our products from the silicon microarchitecture through the software/solution stacks.

Here's what Rattner is saying the extended effort between SAP and Intel underscores:

SAP is making this commitment to extend its offerings beyond the traditional on-premises model and into the on-demand models that more and more customers want to evaluate or purchase for use in non-production systems, with an eye toward extending those new on-demand models more deeply into their businesses as they gain expertise and experience.
For good reasons, both SAP and Oracle have taken some heat for what appear to be their leisurely and low-priority efforts to bring to market new on-demand products and services. But Rattner's own words indicate that via the Intel partnership, SAP is looking to accelerate its ability to make such moves, and to have greater insights and capabilities at hand when its cloud and SaaS products come onto the market: the charter of the new "Collaboratory," he said, "is to understand and drive enterprise computing in Europe such as Cloud Computing or Software-as-a-Service or SaaS."

You can read the full text of Rattner's blog post here.
And a press release put out by Intel's European operations offered this unequivocal statement about the lab's commitment to the untraditional software models that represent a significant break from what SAP has focused upon in becoming one of the world's most successful and influential software companies:

The SAP and Intel Collaboratory's long term goal is to develop technologies that will support efficient implementation of Software as a Service (SaaS) using cloud technologies. . . . Together with Cloud Computing, SaaS is expected to change the software market by enabling the customer to pay on a "per use" basis vs. the current norm which requires high up front capital investment to purchase the software application outright. A recent analyst report indicated that the market for cloud services could reach 150.1B by 2013, three times its current value.

Last week, Salesforce.com CEO Marc Benioff surprised almost everyone by being allowed to speak at Oracle OpenWorld, and he talked about how his company would work with Oracle to give customers "the best of both worlds" with Salesforce's cloud-based products and Oracle's traditional on-premises products.

That's a great step forward for Oracle, but SAP's commitment here with Intel might indicate an even deeper willingness to avoid the inevitable and to begin to prepare now to embrace the cloud-computing paradigm of the not-so-distant future.