July 26, 2016

SAP teams up with AliCloud to drive enterprise cloud services in China

Companies excited to gamble on increased adoption of technology by small and medium-sized enterprises

German business management software company SAP and Alibaba Cloud (AliCloud), a subsidiary of e-commerce company Alibaba Group, plan to jointly launch a new range of online solutions designed to ramp up cloud computing adoption by enterprises across mainland China.

Edward Chen, Chief Business Officer at SAP Greater China, said:

We see our key to success in China is increasing penetration of our cloud solutions into small and medium-sized enterprises.

The launch follows SAP and AliCloud’s strategic partnership, which was announced at an event in Shenzhen in April. Simon Hu Xiaoming, the president of AliCloud, said in April the strategic alliance with SAP aims to help Chinese companies accelerate their “digital transformation”.

German software giant SAP has about 11,000 corporate customers, many of them large enterprises, across the mainland, Hong Kong and Taiwan. A growing number of those clients are cloud users, it claimed.

SAP has been stepping up efforts to get more of its 320,000 customers in 190 countries to adopt its latest S/4 Hana suite of financial and operational planning software, which is a cloud solution available for subscription. According to SAP, AliCloud will jointly market and help deploy its Hana One and other “software-as-a-service” solutions on the mainland.

Morgan Stanley equity analyst Robert Lin said in a report that AliCloud had 500,000 paying clients, including half of the top 35 Chinese “unicorn” internet companies – start-up firms with a US$1 billion valuation as determined by public or private investment.

China’s public cloud service market appears primed for rapid growth, with research firm Forrester predicting that it will reach US$3.8 billion by 2020, up from an estimated US$1.8 billion last year.

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