Dive Brief:
- IBM and SAP are jointly building cloud-based generative AI business solutions, IBM announced Wednesday. The two companies aim to develop and deploy use cases for manufacturing, consumer goods, retail and automotive industries throughout SAP’s enterprise software suite and SaaS products, the announcement said.
- As part of the expanded partnership, IBM embedded AI capabilities across SAP’s Business Technology Platform cloud portfolio, including ERP solutions for finance, supply chain management, human resources, customer experience and spend management. IBM said it has “over 100 AI solutions across industry, line-of-business and product delivery” in development.
- The announcement comes as both companies ramp up efforts to shift more enterprise customers to cloud. “Through this initiative, we will help our clients complete their cloud transformation journeys,” Stacy Short, IBM’s SAP global partnership executive, said in a LinkedIn post.
Dive Insight:
This isn’t the first time IBM and SAP have forged common ground in the enterprise technology stack. The partnership between the mainframe giant and ERP behemoth dates back 52 years to the pre-cloud days of massive on-prem IT estates.
The alliance expansion dovetails with both companies’ focus on cloud.
SAP is engaged in an ongoing effort to shepherd customers from on-prem ERP systems to cloud-based SaaS solutions through the RISE with SAP and GROW with SAP incentive programs. The company is also banking on AI enhancements to drive cloud growth, CEO Christian Klein said during an April earnings call.
“We have released over 30 new AI scenarios across our cloud portfolio,” Klein said. “Additional ones come out almost every week with more than 100 in the pipeline for the remainder of the year.”
While IBM remains a major mainframe market player, the company has doubled down on hybrid multicloud integration solutions, consulting services and, more recently, AI capabilities under Chairman and CEO Arvind Krishna.
The company invested $6.4 billion in the acquisition of multicloud solution provider HashiCorp in April and added Advanced’s mainframe modernization division to its portfolio in January.
“The acquisition of HashiCorp builds on IBM's commitment to industry collaboration, the developer community and open-source hybrid cloud and AI innovation,” Krishna said during an April earnings call.
IBM bolstered its multicloud position Thursday, expanding its partnership with Microsoft to create an IBM Consulting unit devoted to helping enterprises customize and deploy copilot tools in Microsoft 365 office productivity suite.
The company made a similar deal with AWS around AI consulting in October and extended the availability of its enterprise software portfolio in the hyperscaler’s marketplace to 92 countries earlier last week.
With SAP, IBM will standardize reference architectures for ERP data, process, system and device integrations and add the Granite family of LLMs to its previous deployment of Watson AI capabilities in the SAP ecosystem, Wednesday’s announcement said.
