Arguably the world’s hottest major enterprise-software company, SAP has more than enough market momentum to entice any ISV in the world to jump at the prospect of forming a partnership — so who is Databricks and why did SAP select it to join forces in launching the SAP Business Data Cloud?
And by the same measure, why is Databricks touting its willingness to pour $250 million into ensuring success for Business Data Cloud customers and ecosystem partners?
With the position SAP now holds in the market — Q4 Business Suite revenue up 35% to $4.1 billion and total cloud backlog up 41% to a whopping $65.8 billion — SAP could have forged a partnership with any one of a slew of specialized data-engineering companies. And the reason it picked Databricks is the reason that more and more Cloud Wars Top 10 are making moves of various kinds: to give themselves the ability to meet the explosive demands from their customers for AI solutions and services that can drive big-time business transformations and superb business outcomes.
Simplifying the Data World for Customers
In launching its new Business Data Cloud, SAP said it wanted to make it much easier and much faster for customers to be able to take full advantage of all of their data, both inside and outside SAP systems, by providing a “unified experience that delivers transformational insights across all lines of business.” From the Feb. 13 press release:
“Today, SAP announced SAP Business Data Cloud, a fully managed software-as-a-service (SaaS) solution that unifies and governs all SAP data and seamlessly connects with third-party data. As an evolution of our industry-leading data, planning, and analytics solutions, SAP Business Data Cloud brings together SAP Datasphere, SAP Analytics Cloud, and SAP Business Warehouse with a unified experience that delivers transformational insights across all lines of business.”
The big challenge SAP had to overcome was how to ensure that this vision would include not only the structured data already in SAP systems, but also the unstructured data that is so incredibly vital in fueling powerful and relevant AI capabilities.
In an interview with cnbc.com, Databricks CEO Ali Ghodsi recently outlined what I believe is the overarching strategy behind the partnership, which not only vaults SAP into the red-hot data-cloud category but adds significant additional momentum to its hypergrowth arc that Databricks said now equates to an annualized run rate of $3 billion.
“The Databricks Lakehouse architecture lets you blend structured data that people generally used for BI workloads, which is the kind of stuff that tells you about the past, together with unstructured data, which is the main source for AI,” Ghodsi said on the cnbc.com interview.
“Now get one platform where you have all that data, and the data scientists can go ahead and build agents that actually learn on that data. We call this ‘data intelligence’: the AI understands the data that you have inside SAP.”
For all of its prowess with data residing in its own systems that power a huge chunk of the global economy, SAP understood that the AI Revolution requires it to be able to extend rapidly and aggressively into the world of unstructured data to enable its Business AI solutions — and the fruits of its new Business Data Cloud — to be able to yield the best possible insights for customers.
SAP said that by bringing “the power of Databricks directly into SAP Business Data Cloud,” the two companies are opening the door to “a new era in enterprise data management, with two leaders in their domains coming together to redefine how applications and data platforms work together.”
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In the Databricks announcement of the partnership, SAP product-engineering leader Muhammad Alam said the partnership “represents a turning point in how enterprise data is harnessed” and that “we’re fusing SAP’s proven expertise in mission-critical applications with Databricks’ cutting-edge data engineering and AI capabilities to help our customers unlock the next era of digital innovation.”
Befitting such an ambitious outlook, Databricks said it is prepared to pump $250 million into ensuring successful outcomes for customers and partners, which represents a commitment in both capability and financial heft that was for SAP no doubt a non-negotiable element of the deal. In that context, here are three key factors behind SAP’s selection of Databricks for this hugely important initiative that I’ve excerpted from the Databricks announcement:
- The financial commitment: “Databricks recently announced $15B in fundraising and intends to earmark a quarter of a billion dollars ($250M) to help make customers and system integrator partners successful with SAP Databricks across deployment and migrations, ultimately unlocking the tremendous business value of SAP data.”
- Boosting the value of SAP data for AI: “SAP applications power enterprises’ most important decisions around business planning, procurement, HR and travel management. Every enterprise wants to maximize the value of their SAP data by combining it with data from their other business-critical systems. Yet, those systems are varied, and many still sit on-premises in legacy platforms, making it difficult to develop advanced analytics and AI applications. SAP Databricks will have all the relevant datasets enriched and ready to be used for everything from data warehousing to building AI that can reason on that data.”
- Foundation for “domain-specific AI applications”: “Every organization is searching for a faster, more reliable way to translate their data into strategic advantage,” said Ghodsi. “Together with SAP, we’re helping businesses seamlessly unify their data sources, streamline analytics, and accelerate the development of domain-specific AI applications.”
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