The global supply agreement CenturyLink announced today with SAP isn't hugely significant in and of itself, but it is the sign of things to come in the hybrid cloud world in terms of how companies will compete. (See CenturyLink Inks Global Supply Deal With SAP.)
The deal establishes CenturyLink Inc. (NYSE: CTL) as one of the companies providing infrastructure and IT services to help SAP AG (NYSE/Frankfurt: SAP) grow its HANA Enterprise Cloud offering more rapidly, moving more of its customers quickly and cost effectively into the cloud.
IBM Corp. (NYSE: IBM)'s Softlayer and Amazon Web Services Inc. are among the players who already support SAP HANA. The global supply agreement CenturyLink announced today adds its Infrastructure-as-a-Service into that mix, setting CenturyLink up to compete on these services, says Avi Gupta, VP of global sales and marketing for CenturyLink.
As its enterprise customers increasingly move to cloud-based delivery of SAP software, SAP isn't building out its own data centers, instead relying on partners for IaaS, including the networking involved. It then white labels the services to its customers.
"We are essentially competing to be the best partner for that," Gupta says. Among the things the partners compete on are price -- delivering the IaaS at a cost that lets SAP add its margin and still be competitive -- as well as responsiveness and flexibility, Gupta says.
"They need us to be easy to work with," Gupta says. SAP cloud architects will reach out to a partner, seeking a specific solution at specific location and price, and it's up to CenturyLink's cloud architects to quickly provide a competitive response.
The competition is not necessarily on a project-by-project basis, he adds, but overall, the most business goes to the cloud player who can provide the best service quickly and cheaply.
There is plenty of business to go around, apparently. Gupta says SAP has alerted CenturyLink to be ready for "a tsunami" of service growth this year.
— Carol Wilson, Editor-at-Large, Light Reading