IBM and SAP are among the leaders of the $378b cloud services market (see my Figure above). They straddle both the infrastructure and software sides of the cloud – a position each has managed to sustain despite the widespread commoditization of x86 servers and AWS cloud for the majority of cloud service users and suppliers.
They have also been partners for the last 50 years. They are both customer-centric suppliers who have supported customers with products rich with proprietary technology giving performance and cost advantages. A couple of weeks ago SAP announced that IBM’s Power Virtual Server and the IBM Cloud have been added to its RISE commercial package. In this post I look at what this means for their customers.

What is RISE with SAP?

SAP employs around 40k developers. It introduced RISE and GROW four years ago to help its customers cloudify their ERP solutions and take advantage of new in-built AI features. Since then it has executed around 1.3k S/4HANA upgrades; currently RISE runs on 180k servers (IBM and others) and 120k managed systems. During this time it has achieved an availability of 99.998% (‘4 nines’). Its reference customers include Bayer, BMW, CVS, Fujitsu, GM, Henkel, Hitachi, HP, LG, Lockheed Martin, Merk and Nvidia. As well as being deployed on its own and customer clouds, it is also available from AWS, Google cloud and Microsoft Azure… and now the IBM Cloud.
SAP offers two cloud versions of its S/4HANA Enterprise Resource Planning (ERP) software solution. In particular:

• Cloud Public Edition – a standard (base or premium) cloud-native ERP solution – run, managed and automatically updated to the latest release by a cloud services supplier.
• Cloud Private Edition – a more flexible customisable solution, contained in base, premium or premium plus versions that can be updated on the customer’s timetable.

GROW and RISE are the commercial packages that accompany them. They are differentiated as follows:

• GROW is for new customers who want to adopt standard ERP quickly. The transition, which can be done in as little as 4 weeks according to SAP.
• RISE is for existing SAP customers who want to shift their ERP solution to the cloud, either in a new or extended site. The software version installed will typically be the Cloud Private Edition; although it also for those building a 2-tier solution of the Cloud Public Edition (see SAP’s chart above).

Both packages include tools, services and learning resources for the adoption and management of the software. The service delivery model includes SAP, which is responsible for software delivery, management, support, infrastructure, technical services and uptime covered in its SLA, as well as partners who support the adoption of the solution, data migration, application management and upgrade release processes as required.

What is IBM Power Virtual Server?

IBM’s Power Virtual Server is based on the Power10 microprocessor with Power11 microprocessor due for release later this year. Power Virtual Server is an essential component of RISE for migrating ERP solutions from on to off premise (see IBM’s figure above).
RISE can be run off premise from IBM datacenters, although users of its newly introduced PowerVS Private Cloud pod versions will have to wait until it has been certified by SAP for RISE. IBM announced in October that its Power Virtual Server was available from 21 public datacenters across the world and had around 650 customers for production, High Availability/Disaster Recovery (HA/DR) and test/development workloads. I believe the soltution is contributing strong revenue growth.
Power servers – whether physical or virtual – run AIX, Linux and/or IBM i operating systems. They are typically used in retail, manufacturing, logistics, transport organizations and the public sector. Some customers (especially those using IBM i) have been running applications developed decades ago on earlier generations of IBM computers as far back as the AS/400. IBM has continuously modernized its offering, allowing its clients to take advantage of improved security, open source management (especially Red Hat OpenShift), virtualization and AI. Like its mainframes, IBM Power10 servers have AI inferencing built into their processors.
IBM has around 10k Power server customers running the SAP lanscape for customers running SAP ERP (including SAP HANA, S/4HANA, ECC and SAP AnyDB).p

The chances of success

Both IBM and SAP have a strong focus on the needs of their existing customers, many of whom are using their offerings for decades. Perhaps because they have similar technical and business philosophies, they have partnered very successfully for 50 years – not just in the market, since internally IBM is one of SAP’s biggest ERP customers and SAP – of IBM’s Power servers. To use a music studio analogy, each is a ‘first call’ soloist, rather than a good musician prepared to ‘fix it in the mix’ after adequate performance. This announcement shows that they continue to work hard to prove that their joint solutions maintain their value while users cloudify, integrate, consolidate and transform their IT solutions. For both ‘hybrid multi-vendor cloud computing’ is not mere slide-ware, it’s a serious on-going work-plan and execution project.