 From around the globe, it's theCUBE with digital coverage of IBM Think 2021, brought to you by IBM. Welcome to theCUBE's coverage of IBM Think 2021 on your host, Lisa Martin. Today I have a new guest, new to theCUBE, Madhuri Chawla, the Director of Strategic Partnerships for Enterprise Application Services is joining me. Madhuri, it's nice to have you on the program. Thank you, Lisa, very excited to be here and hello everyone. So different this year again, virtual like last year, we're going to talk about digital transformation. We saw this huge acceleration in 2020, the massive adoption of SaaS applications. We want to talk though about IBM managed services for SAP applications. So before we get into that, I'd love for you to be able to describe what your role is to our audience. Absolutely, Lisa. So good day, everyone. I've been with IBM for over 23 years and my current role, I run the strategic alliances for IBM, basically in the ERP space. SAP being our primary strategic partner. I have a global team of architects and we basically look at market requirements, talk to a lot of customers, talk to our business partner, SAP obviously, try to help them with come up with a solution for their transformation journey to the cloud. And hopefully today, we'll elaborate a little bit more on the exact walk that we do in this space. So very happy to be here. Thank you, Lisa. Sure, so we're going to dissect the IBM SAP relationship. I think you even worked at SAP before your 23 year tenure at IBM. So we'll get to some of that as well. But help us understand customers have so much choice. Each day there's more and more choice. Why should a customer choose IBM as their strategic partner for this digital transformation journey? Well, really, IBM has been in this SAP business for many, many decades, as you know. We have many, many certified people in SAP, close to 40,000 people actually globally. And we can help the clients in various aspects of their journey. So the typical cloud journey has four different aspects to it. You will need the advice. So you need basically systems integration services to help customers actually define the scope on what they actually want to either upgrade, bring it to current, as well as what workloads they want to move to the cloud. We can help customers with our systems integration services called the Global Business Services in IBM. We can help them with their entire planning. We can help them with the actual move to the cloud. So IBM offers a whole different variety of services for migration, or not only just the SAP workloads. I mean, SAP typically ends up being the heart of the workloads that any of the major customers run. But surrounding SAP, there's a lot of other applications. So we can help plan that entire journey for advice and then move it as well as in the interim. There's also another step, which can be some customers that need to build, net new and upgrade their applications to the latest technologies. So we can help them with that. And then once the build and move is over, obviously customers need help with the actual steady state run state environments. That's where this key service that we have, Managed Services for SAP applications helps them. So our certifications with SAP and the fact that we have consultants that are certified and all these different aspects of the journey can really help your clients. The other part I would say that IBM is really a hybrid cloud provider. So obviously we have our cloud service, the IBM cloud, but we can offer the service meeting the customer where they need to be. So we are a client-centric service. So if the customer has a choice of AWS or Azure, we can meet them there. So this is how we can really help our customers with our expertise. Another data point to note that, 70, 80% of the enterprise customers still have not moved their workloads to the cloud. So this is a space, especially with COVID, as you've seen what's happened. Customers now are really, really looking to accelerate the journey because it's become a necessity. It's no longer something that a CEO and CIO can push to the right, right? This is something they have to act now. So IBM with all these various services, specifically geared in the SAP area, and given that we've been managing these production workloads for a lot of these enterprise customers on our cloud services for many, many years, we have the experience, we can truly help them with their journey. And as you said, so critical of these days, one of the things that I think we learned in 2020 is there was no time like the present. It really became such a massive shift that for business survival, those that weren't digitized, definitely were in some hot water. But talk to me, so you talked about the IBM, SAP relationship being longstanding. Can you talk to me about the different aspects of the Alliance and how that helps you guys to meet customers where they are? Sure, so SAP and IBM, we've been strategic partners for over 46 years. That's a long time. The partnership obviously has evolved over the years and I'll talk about a few of the different aspects where we've been partners. The Alliance initially obviously started, IBM is in multiple businesses, as you know, we are one of the largest systems integrators in the world from a global business services point of view, as well as one of the largest application managed services providers. So that's part of the Alliance. Then we have our server groups, the power systems that IBM has. So that's another dimension of the Alliance where 5,000, 6,000 plus SAP clients even today are still running their SAP applications on the power systems, whether it's on-premise or also in some of the cloud deployment models. Historically, we also had obviously the database, DB2 Alliance, but now with the SAPs moved to HANA, that's kind of a little bit of a mute point, obviously it still exists, but most of the clients are now obviously being encouraged really to adopt SAP's latest S4 HANA. From the services standpoint, the other facet is really around the cloud services. So that's really our topic today, right? In the cloud services area, we have alliances with SAP, very, very strong alliances that have existed for almost a decade now. As I said, we've been managing the production workloads for very, very large customers in many different industries. Their entire supply chains, HR financial systems are running on IBM either in the old traditional hosting models or also in our cloud models for the past 10 plus years, right, as IBM has evolved. So we have made sure that we do a whole different types of certifications with SAP to stay current. Many of these certifications are done either, you know, every two years, some are done every year. And if anyone checks, you know, the SAP service marketplace website, which is owned by SAP, you can see IBM listed in all these different angles as a certified provider. There isn't another provider that can claim this breath in terms of certifications that IBM has done. And that's why customers can benefit either from one or two of these services that IBM's provides or obviously a combination as a single vendor if the customer needs. So, you know, we have the certs, we have the credibility, we have decades of, you know, delivery excellence in these areas, servicing these clients. Lots of the Fortune 100 customers actually are running their SAP workloads on the IBM systems, whether in traditional hosting or in a hybrid cloud deployment. Some cases were actually, you know, providing services for customers that run their SAP workloads on premise. So we cater to that, you know, sets of clients as well. And then of course others that are purely on our cloud, IBM cloud, as well as hyperscalers. Yeah. So long list of certifications, it seems to be one of the biggest differentiators that you talked about. Talk to me a little bit about how things have evolved in the last, you know, 12 to 18 months in terms of how is IBM's focus changed for hybrid cloud with SAP? Yeah. So the focus changed, if you know, you know, until last year we were called the cloud and cognitive company. This year of course, the whole company has changed and we're going through a major transformation at the moment. We are the hybrid cloud company now and that name change means a lot. It means a lot in the sense that it gives choices to the customer. That's what the whole mission is all about. We wanna make sure that customers are consuming IBM services and IBM wants to meet them where they wanna be. So there's, you know, flexibility of choices in terms of hybrid, you know, the cloud deployment model. So most customers in the SAP area, you know, they're looking for either just a pure private cloud deployment or they're looking for a public cloud deployment or a combination. And some are because, you know, their SAPs footprint sizes are so large. Think about the multinational global companies, you know, and then they operate in so many different regions of the world and their data sizes of their databases are so large. Perhaps, you know, the public cloud really isn't a good fit. Yet these customers are looking to move some sort of their workloads to the cloud. So that's where this hybrid cloud helps them because customers, you know, 90 plus percent of the clients today are really not choosing one hyperscaler as their deployment option. They're really looking at multiple. So because they're running their workloads, not just SAP, but everything else, you know, SAP always brings along a whole bunch of other applications like tax applications and other interfaces, homegrown applications, analytics that the customers are using. So if you wanna take advantage of the true hybrid cloud and the benefits of all the various deployments and hyperscalers available in that region, really the hybrid cloud strategy from IBM is a perfect fit because we give them choices of deployment. We're not saying that you have to deploy an IBM cloud. We're saying you can deploy either on-premise, AWS, Azure, IBM cloud. Really what makes sense, you know, best sense for the types of workloads that the customer is looking at. So that's how the strategy for IBM has completely changed to meet the clients, you know, for what they're actually looking for. Talk to me a little bit about the go-to market. So IBM and SAP, longstanding, decades old relationship, lot of certifications that you talked about. We're talking about business critical applications. You mentioned supply chain a minute ago, and I can't help but think at how supply chain has been affected in the last year. What is the go-to market approach with respect to providing consultation services to help customers determine should we migrate to what hyperscaler and how and when? Yeah, so we can help them with that. So hyperscalers, obviously, you know, IBM has been listed, for example, as the leader in Gartner 2020. And you know, there's lots of other stats that show them that IBM is a leader in application services, in consulting services, application management services, as well as managed services. So these are all different, right? You can see us being listed as a leader, either it's in Gartner or IDC or Horserway, and for many reasons. And, you know, IBM actually has one series of pinnacle awards from SAP over the years. How this helps the clients really determine is that, you know, IBM obviously does a lot of studies externally. We have internal as well as external facing views of comparatives of the various hyperscalers, you know, including AWS, Azure, GCP, and so on. So when a customer comes to us for asking for advice and so on, we basically look at our own intellectual properties, all the analysis that has been done. And more importantly, we look at the full scope of services that the customer is doing. What sort of a business are they in? We have industry experts, there's ERP strategy folks within IBM. So, you know, they go after a certain industry and when they've, let's say, you know, they've gone after the oil and gas industry, for example, they will look at multiple customers in that particular space. So based on their experiences, we can actually define the right roadmap for the client to be able to help them to move their workloads to this hybrid cloud strategy that I just mentioned, right? So that's how we can help them because we have the expertise in that industry as well. And I'm curious, Madhuri, in the last year with so much flux and rapidly changing market conditions, did you see any one or two industries in particular really leading the charge here and coming to IBM and SAP for help on this transformation journey, which has been accelerated by a couple of years? Certainly the retail industry for sure, right? I mean, in spite of the crisis, I think the retail industry did pretty well, right? Because people still have to buy stuff. Of course, the whole buying behavior change, no question. You and I don't know about you, Lisa, but for me, I was never a major online shopper. Oh, yeah, I'm just about everything. Previously it used to be select things here and there, but now it's totally changed, right? So that industry certainly has accelerated, no question. We've had a lot of those coming. The other industries that I've seen the change in the last 12, 18 months is really, for example, the banking industry and so on. IBM basically launched a lot of services in the financial services sector for this reason. So those are, of course, transforming very fast to keep up with the market. And I'm sure there's others, right? But these are the two that come to mind. Yeah, two that have been most affected and needed to pivot so quickly in addition to healthcare. Let me ask you one final question here before we wrap. Talk to me about the advantages of using the PMC Partner Managed Cloud SAP License resale model, the advantages of using that and the benefits. Sure, so far our discussion was really focused around the various service capabilities that IBM has in terms of our capabilities for helping clients with hyperscalers and hybrid cloud. We also need to spend a little bit of time talking about the operations model, right? So when they're running their production workloads on IBM, PMC is yet another dimension. So what PMC Partner Managed Cloud is really some very limited partnerships that SAP does and IBM is the lead on that one. In this space, what SAP allows is the partner, which in this case is IBM, to resell the SAP software license to a customer. So IBM has the rights globally to resell the license and why is that beneficial to the client? Because now IBM can actually turn around the SAP license and have the customer pay us in a SaaS model. So it basically is now an OPEX model where the customer is basically paying a monthly fee as an example. So there's no upfront cost to the client and they basically pay IBM and then IBM pays SAP. So IBM is kind of holding the risk, if you will, on behalf of the customer. It gives customers more choices, more flexibilities, better pricing approach. So if the customer wants as an example to buy everything, the full package, including systems implementation services, deployment models with choices on a cloud, whether it's IBM cloud or others, as well as the license itself, IBM has this end-to-end capability today. We've been selling it to several clients for a few years in several geographies, right? So that's the advantage behind it. Excellent, thanks for breaking that down, Madhuri, and joining me today, talking about what's new with IBM and SAP, the opportunities for customers to accelerate their digital transformation. We appreciate you stopping by. Thank you very much, Lisa, I truly enjoyed it. Thank you. Good, me too. For Madhuri Chabla, I'm Lisa Martin. You're watching theCUBE's coverage of IBM Think 2021.