With 10,000 of SAP’s 20,000+ on-prem customers running on IBM Power systems, SAP and IBM have developed a custom configuration of RISE with SAP that enables those Power on-prem customers to migrate to the cloud in as little as 90 days while remaining on the Power platform.
Those moves to the cloud have become extremely urgent issues for all of those 20,000+ on-prem customers because SAP will soon drop support for its legacy ERP systems. For ECC and R3, that deadline is the end of 2027, while customers running older versions of those systems could have support for their mission-critical ERP systems cease this year or in 2026.
In a conversation late last week, IBM Power General Manager Tom McPherson said the new Power-specific version of RISE offers those 10,000 on-prem SAP-on-Power customers tangible advantages in speed of migration, overall cost, and what McPherson described as “investment protection.”
That’s definitely a sticking point for some customers that can see, at least on paper, the theoretical advantages of moving to the cloud with SAP’s S/4HANA, but are concerned that the related expenses will be prohibitive.
The new IBM-SAP program helps mitigate those concerns, McPherson said, with “buy-back” plans for customers’ legacy Power systems, as well as with financial incentives for systems integrators managing the migrations for customers.
Security considerations are also paramount in the minds of customers, McPherson said, and the RISE for Power program addresses that by replicating the high-security capabilities of on-prem Power while also being optimized for enterprise AI via a range of IBM technologies.
I thought it was interesting to see how the IBM press release about the new partnership referred to IBM as a “hyperscaler,” a designation that IBM has largely eschewed over the past few years.
McPherson said that term applies in this limited context because the required hyperscaler code stack for S/4HANA runs within the IBM Cloud.
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The press release from the two iconic enterprise-tech companies says that RISE with SAP on IBM Power Virtual Server is “the fastest and easiest path for IBM Power customers to accelerate their ERP transformation, and delivers “faster, less disruptive transitions to the cloud.”
For IBM itself, those outcomes are far from theoretical: When IBM migrated its SAP ERP from Power on-prem to the Power Virtual Server, the company realized a 30% reduction in infrastructure costs and related operations. From the press release:
“In one of the largest and most complex SAP S/4HANA Cloud modernization projects of any SAP customer to date, according to SAP, IBM recently moved its quote-to-cash and record-to-report processes to RISE with SAP on IBM Power Virtual Server.
“The IBM project touched more than 150,000 users across 175 countries in 18 months. During this time, it resulted in a 30 percent reduction in infrastructure costs and related operations by rationalizing overall server and data footprint and increasing process automation.”
For SAP, a $10 Billion Opportunity?
While the cost of ERP migrations can vary broadly, a market projection posted by SAP about 16 months ago put the average SAP revenue for every migration at about $1,000,000.
In an analysis I did in Oct. 23 headlined “SAP Eyes $27.5 Billion Opportunity with Expanded RISE Program,” I posted a slide from SAP in which it estimates that the move of its 25,000 on-prem customers (the number it had at that time) could generate revenue for SAP of 25 billion euros, which translates to about $27.5 billion.
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