Alibaba will run on SAP as SAP runs on Alibaba Cloud

“Many countries are getting extremely strict with data privacy and data residency regulations. Heavy reliance on US based infrastructure providers such as Google, AWS, and Microsoft has been a big issue for companies from China and the Middle East. Having Alibaba Cloud as an option is great to address these regions’ sovereignty requirements,” Lopez said, noting that Chinese enterprises also have access to another local SAP-certified option for ERP applications, from Huawei Cloud.

Bob Parker, senior vice president of research at IDC, views the partnership as providing leverage to enterprises in the China region in choosing their infrastructure provider, as they are getting additional choices.

“Many of these enterprises may already have consumption commitments with Alibaba relative to other, non-ERP workloads so it will give them the opportunity to deprecate those commitments,” Parker added.