Microsoft and SAP have been pals for years and years, and today at the SAP Sapphire Now customer conference in Orlando, the two company CEOs, Satya Nadella and Bill McDermott announced they were taking the relationship to another level with deeper cloud integrations between the two companies.

The deal will enable SAP customers to run HANA, the company’s in-memory database product  on Microsoft’s Azure cloud. The two companies announced a deal a couple of years ago to allow customers to build HANA applications, taking advantage of the elastic resources which Azure (and indeed any cloud) provides, but this announcement takes that another step, enabling customers to access Azure security and management capabilities that have been beefed up since that previous agreement was announced.

HANA also runs on AWS, but Microsoft was careful to differentiate the two with Azure offering the ability to handle larger amounts of data and RAM, which can come in handy when you’re processing big data loads.

In addition, there will be a more extensive link between SAP products such as Concur, SuccessFactors and Ariba and Office 365 to bring communications, collaboration, calendaring and all of the tools in Office 365 more directly into the SAP tool set and vice versa.

 

The deal makes a lot of sense given that the two companies both have deep ties to the enterprise and share a common set of large customers with similar needs. It allows them to each play to their strengths without really competing with one another.

The announcement comes on the heels of SAP’s deal with Apple that the company trumpeted just a couple of weeks ago to bring iOS to SAP customers. It also shows a concerted effort on SAP’s part to expand its market reach using partnerships as leverage, R Ray Wang, principal at Constellation Research told TechCrunch.

“SAP’s been changing their strategy around partnerships. they’ve taken the time to see what customers are interested in and are building out partnerships that align back to customer’s install base and business requirements,” Wang explained.

For Microsoft, it’s about a platform play. “Meanwhile, we are also seeing a renewed Microsoft focused on platforms. Satya wants to be the neutral provider to as many business application vendors as possible,” he said.

This partnership provides another way to bring two companies closer together that already have a long history. The products and capabilities announced today will be available some time in the third quarter of this year.

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