Verizon reels in large contract from SAP for network build-out

Verizon sign from MWCA
Verizon is working on improving SAP's global network infrastructure as part of a new deal it landed. (FierceWireless)

Germany-based SAP has picked Verizon to build out its next-generation global network instead of other carriers such as Deutsche Telekom and AT&T.

SAP, which was founded 46 years ago, is making a concerted effort to revamp its global network infrastructure while reducing the workload on its in-house IT team by working with Verizon and implementing new technologies such as software-defined networking. SAP's expectation is that it will be able to better compete against rivals such as Salesforce and Oracle after Verizon streamlines its global network infrastructure and enables more cost-effective management.

Verizon, which was a previous technology partner of SAP's, now supports SAP across two areas. The first is developing a new global network to link SAP's offices around the world, which includes SAP's voice and data services.

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The second area that Verizon is building for SAP is providing scalable and secure internet connectivity to hook up SAP's customer-facing data centers around the globe, which is key to SAP's cloud business.

“SAP has an extremely clear vision for its customers around the globe,” said George Fischer, president, Verizon Enterprise Solutions, in a statement. “The world counts on SAP for mission-critical applications that run their business, delivering intelligence across the enterprise in real time. That clarity of purpose is extremely important, as it makes it crystal clear where we need to focus our attention as well. This was a great opportunity for us to use Verizon’s innovative network solutions to build a future-ready infrastructure that can support SAP’s exponential growth. When a company is growing as quickly as SAP, the network is foundational. And network is at the heart of what we do.”

During its second-quarter earnings call in July, CEO Bill McDermott said SAP was integrating its enterprise cloud around a single view of the customer, which is called SAP HANA enterprise cloud, to help businesses run in whichever environment best serves their customers, according to a transcript from Seeking Alpha.

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By moving more of its services to the cloud and taking advantage of software technologies, SAP’s goal is to improve support for customer-facing applications and provide a better user experience for both its own employees and its customers.

“Secure, resilient global connectivity is crucial for our future business success and critical to running our business,” said SAP's Thomas Saueressig, chief information officer and executive vice president, global cloud infrastructure, in Tuesday's press release. “As we move more of our business to the cloud, our customers’ success depends on our ability to connect them to our applications, and to help ensure those applications deliver the highest standards of performance and security.”

SAP's cloud bookings grew by 29% from the second quarter of last year to the most recent second quarter this year, according to Seeking Alpha. Driven by adoption of SAP S/4 HANA, cloud and software revenue grew by 10%.

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