Microsoft Corp. is expanding its long-running partnership with German enterprise software giant SAP SE. The Redmond-based firm announced Tuesday it has engineered SAP’s cloud and enterprise resource planning software to run on its Azure cloud, as it bids to steal some of the limelight from Amazon Web Service Inc.’s cloud conference this week.

Microsoft and SAP said they will jointly provide technical support for customers using the integrated offerings. The companies will also work on joint marketing efforts, they said. In addition, both companies will begin using the other’s software internally, they said.

The specifics of the deal will see the SAP HANA Enterprise Cloud supported on Microsoft Azure, meaning SAP S/4HANA can now be run directly on Azure. SAP’s S/4Hana service is an ERP system for large enterprises, used to support activities such as finance, sales, human resources, procurement and manufacturing supply chain tracking.

According to the companies, customers will be able to benefit from “the best of both worlds,” by leveraging Azure’s trusted cloud services with SAP’s application management and product expertise. A number of mutual big name customers including the Coca-Cola Co. and Costco Wholesale Corp. claimed that the expanded partnership will help to boost their own cloud strategies.

The partnership is the fruit of years of cooperation between the two software giants. The companies have been working to get SAP’s software and services running on Azure for several years. Indeed, Microsoft announced as far back as 2014 it was working to certify some of SAP’s core business applications on its cloud.

And this year SAP said that its customers could run its software on AWS, as well as Azure and Google’s Cloud Platform in preview. At the time of that announcement, Microsoft said it was working with SAP to make Azure a deployment option for the SAP HANA Enterprise Cloud, a private managed cloud service built around S/4HANA.

“It’s a partnership that was about to happen, the question is really what took both parties so long?” Holger Mueller, principal analyst and vice president of Constellation Research Inc., wrote in a blog post analyzing the announcement.

The partnership is also a major win for customers, Mueller said. He explained that it would allow SAP to spend less capital on Hana Enterprise Cloud with the load moving to Azure, and that these savings would likely be plowed back into its research-and-development efforts. However, he warned that Microsoft and SAP still need to show they can deliver on customer traction, value and success.

“If all goes well it means customers will have to pay less for running S/4HANA, while it is being operated by a vendor who does infrastructure management for a living,” Mueller said.

Microsoft’s FAQ page says organizations currently using SAP’s software can move their licenses to Azure. If customers choose to run SAP on Azure infrastructure, they’ll be billed according to virtual machine time and other Azure services they use.

The companies also said they’re using each other’s products. Microsoft said it will use SAP S/4HANA on Azure to track its internal finances, and SAP will do the same for its own operations. In addition, SAP said it’s migrating 12 or more of its “business critical systems” to Azure. The partners added that they plan to document these internal projects, so as to provide guidance to customers looking to make similar deployments of SAP applications on Azure.

Meanwhile, Microsoft said it’s also planning to “connect SAP S/4HANA to Azure AI and analytics services” in order to drive more efficient financial reporting.

“As technology transforms every business and every industry, organizations are looking for the right platforms and trusted partners to help accelerate their digital transformation,” said Satya Nadella, chief executive officer of Microsoft. “Building on our longtime partnership, Microsoft and SAP are harnessing each other’s products to not only power our own organizations, but to empower our enterprise customers to run their most mission-critical applications and workloads with SAP S/4HANA on Azure.”

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