UPDATED 13:11 EDT / JUNE 15 2021

CLOUD

Google Cloud lands deal to host Johnson Controls’ resource planning platform

Google LLC’s cloud business has inked a deal with Johnson Controls International plc to host the enterprise resource planning software that powers the $22 billion hardware firm’s business operations.

The deal, announced this morning, expands upon an existing partnership between the companies. It follows several other cloud deals announced by Google in recent months that focus on helping large firms move their enterprise resource planning environments to its cloud. 

Johnson Controls develops equipment for buildings including air conditioning systems, energy management gear, industrial refrigerators and a variety of other hardware. Another one of the company’s focus areas is making cooling systems for data centers. Johnson Controls, like many other companies in the industrial sector, has over the years been working to add more digital features to its hardware product lines. It has been stepping up its use of the public cloud as part of the effort.

The enterprise resource management or ERP software that Johnson Controls has moved to Google Cloud is a deployment of SAP SE’s ECC platform. ECC is used by a sizable percentage of the world’s large corporations to coordinate their operations. The platform provides features for managing accounting, logistics, product quality testing and the other processes that form the core of a firm’s day-to-day business activities.

Johnson Controls previously ran ECC on-premises. Thanks to the newly announced deal with Google, its ECC deployment is now in Google Cloud, a switch that the company credits with enabling low-latency access to the software for its employees.

The search giant has dozens of Google Cloud data centers worldwide that allow customers to run their software in multiple geographic locations. This enables large enterprises such as Johnson Controls that have employees in multiple countries to host their applications closer to those employees, which reduces latency.

Another reason companies have been moving workloads to the cloud is that, because the major cloud providers spend billions of dollars a year on infrastructure technology, their data centers are more energy-efficient than traditional on-premises facilities. As a result, adopting the cloud helps companies advance their sustainability initiatives. Google Cloud added new sustainability-focused features recently to enhance that part of its value proposition. 

“Running our core business systems and applications such as SAP in a reliable, scalable, and sustainable manner is a critical component to ensure we deliver clean, sustainable solutions across the entire value chain,” said Diane Schwarz, Johnson Controls’ vice president and chief information officer. Johnson Controls detailed a sustainability plan earlier this year that aims to achieve, among other objectives, a 55% reduction in the amount of carbon emissions generated by its operations before 2030.

Johnson Controls is also playing a role in Google’s own sustainability efforts. The hardware maker supplies data center cooling systems and related services for several Google Cloud data centers. One of Johnson Controls’ specialties is making equipment that lowers water-cooled data centers’ environmental impact by reducing the amount of water they need to use to dissipate heat from servers.

For Google, the deal with Johnson Controls is the latest in a series of recent cloud contracts involving major enterprises’ SAP deployments. Over the last few quarters, the search giant announced SAP-focused deals with home appliance maker Whirlpool Corp., PayPal Holdings Inc., Vodafone Group PLC and others.

Making it easier for customers to run SAP’s ERP software has long been a major focus in the feature roadmaps of Google and its cloud rivals. That’s partially because ERP systems, as the central hub in which enterprises manage key processes such as accounting and logistics, store large amounts of mission-critical business data.

Countless other applications in a company depend on this data. After a company moves its ERP system to a cloud platform, it has more reason to bring over its other applications as well because having everything in one place simplifies certain tasks. The result is more business for cloud operators. 

Image: Google

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