SAP and Microsoft’s fairytale ending with cloud collab success story

Castle in the Clouds : SAP Microsoft cloud collab

Microsoft’s Q1 24 fiscal earnings outperformed analyst forecasts with Satya Nadella, CEO of Microsoft, crediting the success to the company’s increased cloud migrations. This follows a year of Microsoft and SAP collaborations geared towards cloud initiatives.

Nadella said during Microsoft’s results announcement: “With Azure Arc, we are meeting customers where they are, helping them run apps across on-prem, edge and multi-cloud environments.”

Nadella continued with an added nod to SAP, saying: “We are the cloud of choice for customers’ SAP workloads, too. Companies like Brother Industries, Hanes, Zeiss and ZF Group all run SAP on Azure.”

This success comes after an announcement earlier this year that SAP and Microsoft plan to collaborate on taking SAP S/4HANA Cloud to the ‘next level’ to create an easier, faster and more effective version of S/4HANA through integration of Microsoft Teams.

Following SAP S/4HANA Cloud updates, Microsoft released the preview of a collaborative ERP feature that allows business users in SAP S/4HANA Cloud to share links to live business data in Microsoft Teams chats. Microsoft had stated that it aimed to help its business users manage their daily activities, supported by its ERP features in SAP S/4HANA Cloud.

Additionally, SAP CEO Christian Klein announced during his keynote address at SAP’s flagship event, Sapphire 2023, that the company will not only take cloud initiatives to the next level with Microsoft but will additionally begin to prioritize AI, beginning the process to embed generative AI into many of Microsoft’s offerings.

More recently, SAP has put its faith in Microsoft alumni to further the companies’ joint AI ambitions. SAP announced a new role, global head of AI, appointing Microsoft’s Walter Sun after an 18-year run with Microsoft, who left his Redmond role as VP of Copilot Applied Artificial Intelligence for business applications.

As Microsoft celebrates its successful fiscal quarter, crediting it largely to cloud and AI initiatives, it might seem like the Microsoft/SAP collab has gotten its ‘fairytale in the cloud’ ending to the year. However, it remains to be seen how the two giants will handle the ever-controversial ECC deadline of 2027.