“BREAKTHROUGH with IBM” simplifies how SAP customers can migrate to S/4HANA

The Situation: SAP customers are always seeking a less-complex route for SAP S/4HANA migration, as it involves multiple services such as cloud, consulting, implementation, and managed services. It’s challenging to identify the right cloud and implementation partners. IBM has simplified the whole journey with its new offering, aiming to provide its customers with a value-driven, outcome-based experience.

In response to market demand, the firm unveiled a new offering, BREAKTHROUGH with IBM for RISE with SAP. Additionally, it launched the Premium Supplier option for RISE with SAP to assist legacy customers in moving their SAP workloads to IBM Cloud across industries. Both announcements garnered significant attention from existing and potential SAP customers. IBM is the first SAP partner to bring cloud infrastructure, advisory, technical implementation, and managed services offerings under a single contract. Let’s examine the Premium Supplier option and BREAKTHROUGH to see how they are different from the RISE with SAP offering.

How are the Premium Supplier option and BREAKTHROUGH different?

IBM and SAP strengthened their 50-year partnership with a new Premium Supplier option for customers, embracing a hybrid cloud strategy. IBM Cloud is now available as one of the cloud options for RISE with SAP along with other cloud infrastructure providers such as Azure, AWS, and GCP. With this new option, enterprise customers can migrate their on-premises SAP software workload to IBM Cloud, backed by IBM’s strong security capabilities under one contract with SAP.

IBM secured the second spot overall in the recent HFS Top 10: SAP S/4HANA Services, 2022 study and secured the #1 spot in the scale parameter refer to exhibit.1. The study pointed out that customers primarily use an on-premises model and prefer the hybrid model when moving their workloads to the cloud. IBM drew a similar conclusion and expanded its SAP partnership with RISE with SAP for customers looking to adopt hybrid cloud strategies.

Exhibit 1: Number of SAP S/4HANA certification, as of 2020 CY

TCS* numbers are estimated
Source: HFS SAP S/4HANA Services Top Ten study

In addition to the Premium Supplier option, IBM launched BREAKTHROUGH with IBM for RISE with SAP. The portfolio includes IBM Cloud and consulting services for planning, implementing, and managing SAP S/4HANA services. With the offering, IBM focuses equally on small and medium SAP customers.

The offering makes a difference for SAP customers along various dimensions. It is SAP-certified cloud infrastructure with a list of solutions and a single contract with unified accountability. Moreover, IBM customers can deploy their workloads via SAP-certified Power Virtual Servers.

The BREAKTHROUGH with IBM offering brings cloud, advisory services, and implementation and technical managed services expertise under a single contract. This differentiates IBM’s offering from others and SAP’s RISE with SAP. SAP’s single contract offering RISE with SAP does not cover advisory and implementation services expertise like IBM’s BREAKTHROUGH with IBM does.

Going head-to-head with hyperscalers and services providers is a challenge

IBM’s BREAKTHROUGH offering makes things simple and suitable for all SAP customers. However, IBM may face tough competition from hyperscalers and services providers. Hyperscalers have already conquered the enterprise IT landscape and are further influenced directly or indirectly through services providers for similar services. On the same note, top providers like Accenture, Capgemini, EY, and others have a robust cloud transformation capability. IBM must prove its cloud infrastructure deployment and management, consulting, implementation, and managed services capabilities again.

Another known challenge is that enterprise customers are always concerned about single-vendor contracts to avoid a lengthy lock-in period. But IBM understands its customers and market challenges, and the offering is an initiative to sort out these concerns. We hope IBM will be more flexible and transparent about contract tenure and commercial models with its customers.

The Bottom Line: With its new simplified SAP offering, IBM is in a stronger position to differentiate and compete effectively

IBM’s customers have frequently highlighted their challenges navigating the firm’s sprawling business lines. The BREAKTHROUGH with IBM offering simplifies how IBM’s clients interact with different business lines to break down siloes across the enterprise. IBM clearly conveys this message with its new market offering, making it much less complex with which to engage. With this significant progress and differentiated offering, we believe IBM is becoming a more significant player in the SAP space.