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SAP & Microsoft Sign 3-Year Strategic Partnership

Simplifying SAP Cloud Migrations

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When two giants of the enterprise software world shake hands, it’s worth paying attention. On October 21, 2019, SAP and Microsoft signed a three-year strategic partnership agreement, aiming to help their joint enterprise customers modernize and migrate their business processes into the cloud.

This deal doesn’t just tighten SAP’s relationship with Microsoft’s Azure cloud platform—it also highlights SAP’s strategy of working with all three hyperscalers: Azure, AWS, and Google Cloud. Internally, SAP calls this initiative Project Embrace. And that name is telling: SAP isn’t picking sides. Instead, it’s embracing the entire cloud ecosystem.

That said… it’s clear Microsoft Azure holds a special place at the table.

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New Leadership, New Focus

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Interestingly, the announcement came shortly after SAP’s longtime CEO Bill McDermott stepped down, making way for Jennifer Morgan—the first woman to lead a company listed in Germany’s blue-chip DAX index.

And what did Morgan focus on in her first major announcement?
SAP S/4HANA. No surprise there.

SAP’s flagship product, S/4HANA, remains at the heart of its cloud transformation strategy. As Morgan highlighted during the company’s Q3 earnings call, SAP posted a 10% revenue increase for the quarter—a sign that the transition from on-premise to cloud services is already paying off.

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Why This Partnership Matters

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In Morgan’s own words:

“We’ve bundled SAP’s cloud platform services to support customers around extension, integration, and orchestration of SAP systems.”

Translation: SAP’s cloud services will now be sold through Microsoft’s global sales channels. For customers, this means:

• Simplified purchasing
• Integrated support models
• A more cohesive roadmap for running SAP workloads on Azure

Why does this matter? Because historically, migrating from on-prem SAP systems to the cloud wasn’t exactly… smooth. Many enterprises viewed SAP cloud transformations as:

• Overcomplicated
• Resource-intensive
• Risky
• And full of hidden costs

This partnership is SAP and Microsoft’s joint response to those concerns.

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The Strategic Reality: SAP Cloud or Azure?

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Now, here’s a nerdy detail many outside SAP circles don’t realize:
SAP’s own SAP Cloud Platform is largely powered by… wait for it… Microsoft Azure.

Yes, you read that right. SAP Cloud Platform is effectively a managed layer running on top of Azure infrastructure. In other words, customers using “SAP Cloud” are often already leveraging Microsoft’s hyperscaler platform—whether they know it or not.

This partnership simply formalizes that relationship:

• SAP focuses on applications, extensions, and business processes.
• Microsoft delivers the scalable, secure cloud infrastructure underneath.

From a customer perspective, this is good news:

• Azure infrastructure with SAP-specific optimizations
• Microsoft global support combined with SAP services
• Joint innovations coming from two industry leaders

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Making Cloud Migrations Easier

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At its core, this partnership aims to tackle one of the biggest barriers to cloud adoption:

Complexity.

Together, SAP and Microsoft are working to:

• Provide reference architectures for SAP workloads on Azure
• Co-develop migration toolkits to simplify onboarding
• Build integrated support models to streamline operations
• Automate infrastructure provisioning with Microsoft Azure blueprints
• Reduce the friction of managing hybrid SAP environments

For companies running SAP on-premises, this partnership sends a clear message:
It’s time to move. And we’re making it easier.

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The Big Picture: Why Azure Is Winning SAP Workloads

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While SAP maintains partnerships with AWS and Google Cloud, it’s no secret that Microsoft Azure has become the preferred cloud platform for SAP workloads. Why?

Because Azure offers:

• Seamless integration with Microsoft 365, Power BI, and Teams
• Enterprise-grade security and compliance certifications
• Deep experience running SAP workloads at scale
• Familiar management tooling for IT teams (Azure Monitor, Azure Security Center)

It’s not just about “where your data lives.” It’s about how your business runs.

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Final Thoughts from Mr. Microsoft

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As someone working deep in the Microsoft Cloud ecosystem, this partnership feels like the perfect match. SAP brings its expertise in enterprise applications; Microsoft brings its hyperscale infrastructure and global reach.

Together, they’re simplifying SAP cloud migrations—and giving customers a future-proof roadmap to modern ERP.

If you’re running SAP workloads on-premises and considering your cloud options, this partnership should tell you one thing loud and clear:

SAP on Azure isn’t just possible. It’s preferred.

And that’s a message your CIO needs to hear.

Stay clever. Stay curious.
Your Mr. Microsoft,
Uwe Zabel

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Want to know what SAP S/4HANA on Azure looks like in practice? Dive deeper on zabu.cloud or reach out directly. I’ll help you map your cloud journey—without the buzzwords.