Dell And SAP Team To Lower Customer Costs

SAP needs to fulfill a promise it made to customers, CEO Kagermann says
SAP needs to lower the costs of software projects, and Dell wants to work more closely with software vendors. Those mutual interests converged last week in the form of a partnership aimed at convincing more companies to run SAP applications on Dell servers.

SAP and Dell aren't exactly strangers--they've worked together for years. Dell estimates there are already more than 5,000 SAP-on-Dell installations worldwide. Under an expanded alliance, Dell becomes the primary support organization for SAP-on-Dell customers and is offering professional services tailored to SAP deployments. Dell also is launching services to help SAP customers move apps from Unix computers to Linux- or Windows-based servers.

SAP CEO Henning Kagermann

SAP can use help from Dell, CEO Kagermann says.

Photo by Arne Dedert/EPA
The deal, SAP CEO Henning Kagermann says, is a way to make good on SAP's promise last year to assist customers in lowering the total cost of ownership of SAP environments by 25%. "We need help to get there," Kagermann says. With Dell and SAP working together, "the risks are low and the savings are there," he says.

Despite their goals, SAP and Dell will face some challenges, predicts analyst firm IDC. They include competing on "overall price and value" for a given SAP application, according to an IDC report on the alliance.

SAP will offer more proof of how it's lowering costs for customers next week at its Sapphire user conference in New Orleans, Kagermann says. SAP also plans to present details of its product road map and services-oriented architecture.

Dell, meanwhile, plans to strike more deals that involve close working relationships with enterprise software companies, senior VP Jeff Clarke says. Dell has recently disclosed joint initiatives with Oracle and VMware Inc.