SAP, Microsoft Strike Software Integration Alliance

Microsoft and SAP are tightening integration between some of their key products, unveiling plans Tuesday at SAP's Sapphire Now conference to support SAP's HANA data management and application platform on Microsoft's Azure cloud platform.

The move means that SAP's flagship SAP S/4 HANA application suite will run on Azure. The two companies are also integrating Microsoft's Office 365 cloud personal productivity applications with SAP's cloud-based enterprise applications. And they are jointly providing application management and security for custom applications built using SAP's Fiori through Microsoft's Intune cloud-based application management toolset..

The alliance was announced by SAP CEO Bill McDermott and Microsoft CEO Satya Nadella, the latter making a surprise appearance during McDermott's Sapphire Now keynote.

[Related: SAP Readies Cloud Channel Program, Seeking New Recruits And Offering Transition Help For Current Partners]

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SAP, based in Walldorf, Germany, and Redmond, Wash.-based Microsoft have long had a close relationship, despite competing in some areas like ERP and CRM applications. The companies previously built links between Microsoft's Office desktop applications and SAP's enterprise software. Tuesday's news extends that alliance to the two vendors' cloud product lines.

"We have a long heritage of working together," Nadella said. "When I look at the footprint of what we are accomplishing today to benefit customers, it's breathtaking."

Some leading systems integrators that work with both SAP and Microsoft also applauded the development partnership between the two vendors.

The SAP-Microsoft alliance "will open some additional doors for us," said Scott Schlesinger, an advisory services principal at Ernst & Young, an SAP partner, in an interview at Sapphire. "From the EY perspective, we're very tightly aligned with both companies, so we're excited."

He went on to describe the alliance as a "coup" for SAP that will help bring the vendor closer to end users within its customer companies. "It seems like SAP has been making some really good alliance moves," he added, pointing to the company's recent announcement of a partnership with Apple under which the two will work to connect Apple iOS mobile devices with SAP's enterprise applications.

Under the alliance, SAP and Microsoft will certify SAP HANA to run development, test and production software on Microsoft Azure, including SAP S/4 HANA. The companies said that provides customers with a new deployment option for SAP HANA, allowing enterprises to run mission-critical applications and data analytics on a large scale.

The two companies will also combine Office 365 communications, collaboration, calendar, documents and other application data with SAP cloud applications such as SuccessFactors, Ariba, Concur and Fieldglass. Some of the capabilities will be ready as early as the third quarter with others farther out in the future.

"So what we have done is take the best of SAP and the best of our hyper-scale cloud and brought them together," Nadella said. "What does that mean? It means SAP applications are certified on Azure. SAP S/4 HANA is certified on Azure. SAP HANA is a certified match. Now that is just a fantastic capability for you to be able to run," he told Sapphire attendees.

SAP's cloud applications "now seamlessly integrate with Office 365," Nadella said. "This combination, this integration is really going to accelerate that [information and workflow] that our customers seek by bringing together [software] they are already using from us."

Linking Office 365 with SAP's ERP, line-of-business and cloud applications cover a broad range of customer use cases, McDermott said in a press conference after his keynote. He also predicted the alliance would boost sales of SAP's core products. "You'll see HANA and S/4 HANA pick up even more steam because Azure is going to be yet another large channel for HANA and S/4 HANA in combination with Microsoft," he said.

SAP will provide an open standards plug-in framework that customers and partners can use to build and deploy custom mobile hybrid applications, based on the SAP Fiori user interface model, that run on the SAP HANA Cloud Platform. Through the framework developers can embed Microsoft Intune application management capabilities within the applications, making it possible to manage, deploy and protect the Fiori apps using Intune in the same way Office 365 applications are.

At Sapphire SAP also said its SAP Anywhere cloud-based front-office applications for small businesses with between 10 and 200 employees is now available in the U.S. SAP first made the SMB application set available in China last year and in the U.K. in March.