Dell, SAP In Migration Alliance
The Round Rock, Texas-based hardware maker said the effort is aimed at growing its installed base of Dell-SAP solutions, which already numbers 5,000 worldwide.
"Dell and SAP share a vision of making the enterprise more scalable, driving costs down and creating more flexibility for customers," said Dell founder and Chairman Michael Dell in a news conference to unveil the new offering and alliance. "We see the enterprise rapidly transitioning to this kind of world."
Dell said half of SAP's 71,000 installations are currently being migrated from Unix-based systems to Linux-based or Windows-based systems, and SAP installations and migrations should generate $1 billion in annual revenue for his company.
Under the new Dell-SAP alliance, Dell will provide 24x7 phone support to customers that have an SAP solution integrated with a Dell server. Both companies will continue to provide presales support via three Dell-SAP "Competence Centers" based in Austin, Texas; Walldorf, Germany; and Kawasaki City, Japan. The centers will also assist enterprises in porting their current SAP solutions from Unix-based systems to Linux- or Windows-based systems.
SAP's CEO, Henning Kagermann, said after two down years, his company is beginning to see growth, especially from enterprise customers seeking more headroom and looking to take advantage of standards-based technology.
"We have a lot of demand coming from the applications," Kagermann said. "Companies have, for example, an Internet-based store. They need more hardware. Now they can pay as they go."
For the past five years, Dell has been expanding its efforts in the higher-end enterprise space by developing long-term partnerships with EMC and Oracle, among other actions.
Dell has not been as successful on the services side: Its $3 billion annual services run rate is far below the corporate objective that Dell announced two years ago to become a $10 billion-a-year services company. In addition, much of the services work is provided by solution providers, not Dell-badged employees, and Dell and Gary Cotshott, vice president of Dell Services, declined to specify whether solution providers or Dell employees would be handling the majority of the SAP service work.
John Parkinson, chief technologist for the North American Region at solution provider Cap Gemini Ernst and Young, said the deal could have implications for his company, primarily under very specific circumstances.
"In some sense, this is competitive with what we do," Parkinson said. "But we don't look at straight re-platforming as that interesting to us. But if you're talking about version upgrades or redoing the integration framework or putting [SAP] NetWeaver in, then we're interested."
In other news, Dell announced during the conference that his company and EMC next month will unveil a new, low-cost SAN targeted at small businesses.
