The largest online retailer
Amazon.com, Inc.
's (
AMZN
) Amazon Web Services ("AWS") has been certified by
SAP AG
(
SAP
) to run SAP Business Suite software on the AWS Cloud. AWS is a
cloud-based storage service.
Amazon's AWS cloud platform, supported by SAP's various
business applications, will meet the needs of business
communities to speed up the innovation process, while at the same
time reducing costs. Amazon has introduced a pay-as-you-go model
for the AWS platform, which will allow enterprises to pay only
for the resources they use.
Following its expansion activity in Australia, Amazon
has nine data center hubs across the world including three data
centers in the Asia Pacific for AWS.
The AWS can support SAP's software including SAP Enterprise
Resource Planning (SAP ERP), SAP Customer Relationship Management
(SAP CRM), SAP Product Lifecycle Management (SAP PLM), SAP Supply
Chain Management (SAP SCM) and SAP Supplier Relationship
Management (SAP SRM) applications.
Implementing SAP software in a business is very expensive.
Further, installing software and hardware, and then providing the
requisite training significantly raises the cost of ownership. A
company therefore finds it difficult to switch to another SAP
vendor as the cost rises. Also, all SAP packages may not fit a
company's business model; thereby the need for customization
further increases costs.
Gartner estimates that cloud infrastructure services will
reach $8.1 billion by 2013, increasing at a CAGR of 35.6%. Hence,
opportunities are present for Amazon to scale up its AWS cloud
platform further.
Amazon's third quarter revenue was $13.81 billion was up 7.6%
sequentially and 26.9% from the year-ago quarter. This was better
than guided and more or less in line with consensus expectations.
Excluding unfavorable currency impact, revenue increased 30% year
over year.
Currently, Amazon has a Zacks #4 Rank, which implies a Sell
rating. However, SAP AG has a Zacks #2 Rank implying a Buy rating
in the short term.
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