Skytap Bullish as Momentum Grows for Cloudy Power LPARs
April 6, 2022 Alex Woodie
Since announcing support for IBM i in late 2018, Skytap has seen interest build for its public cloud offering, which leverages Power servers installed Microsoft Azure and IBM Cloud data centers. Now, thanks to an expanded partnership with Microsoft and a new certification with SAP, the company expects migrations of IBM i and AIX customers into the cloud to continue picking up steam.
Skytap has a unique offering in the cloud hosting business, particularly as it pertains to Power customers, who have a much smaller set of runtime options in an X86-dominated world.
The Seattle, Washington, company has a deal with Microsoft to manage Power Systems servers that are physically located in eight Azure data centers around the world (a number that is still expected to rise to 10 in the near future). The company has a slightly different partnership with IBM for the IBM Cloud, which also offers IBM i and AIX LPARs via the infrastructure as a service (IaaS) business model.
The partnership with Microsoft received a big boost last month, when Microsoft announced that Skytap has been admitted to the Microsoft Global ISV program. This is a prestigious honor that will not only bolster the Skytap-Microsoft relationship, but should also impact Skytap’s solution for Power customers, said Skytap Chief Revenue Officer John Wrobel.
“This is their top-tier partners, like VMWare, SAP [and NetApp],” Wrobel said. “There’s a different investment profile in the marketing spend and some of the other ancillary programs that open up for you to help really bolster and strengthen our robust go-to-market between the two entities.”
Wrobel worked at NetApp when the storage vendor was brought into Microsoft’s Global ISV program, and he recognized an across-the-board improvement to the relationship, he said.
“The Microsoft field thinks of you under a different lens when you’re part of that category, and understands kind of the importance of the partnership to Microsoft,” he added. “The main message is that it’s effectively a signal of how big the potential is for the business between the combined companies.”
In 2020, Skytap’s overall customer count increased by 30 percent, the company told IT Jungle last year. But the public cloud hosting portion of that business was growing much faster than the more established portion of Skytap’s business, which revolves around helping enterprises to virtualize their traditional n-tier systems and — most importantly — all their dependencies in preparation for moves into modern cloud infrastructures.
“Skytap grew up with this virtual IT labs as we were founded in 2006. That continues to be a growth business,” Wrobel said. “But certainly our Power migration being focused with Azure has been the significant growth vector of the business — much larger than 30 percent.”
In 2021, Wrobel said that Skytap has 150 Power customers running on Azure alone. While he didn’t want to provide an updated figure for 2022, he said the figures are fairly evenly split between AIX and IBM i.
The other piece of news for Skytap is that the company has been certified as a cloud infrastructure provider by SAP, giving the company the ability to run the German software giant’s ERP systems on behalf of customers. That certification is helping Skytap to land more business, Wrobel says.
“So having that certification has unlocked our ability to go solve for that [portion] of the market that is running SAP and looking to migrate some of the legacy aspects, the R/3 aspects that they don’t want to fully migrate into HANA yet,” he said. “Skytap is a good solution to solve for that workload portion of their SAP landscape.”
The cloud infrastructure certification from SAP covers ERP applications running on AIX as well as IBM i, Skytap said. The certification could be of interest to IBM i customers who are looking for a new home for their SAP Business Suite or R/3 applications. The future of SAP on IBM i is currently in doubt, as the company’s long-term roadmap is centered on S/4 HANA, which SAP has said will not run on IBM i.
The last we heard, SAP will continue running on IBM i through 2030, with an extended maintenance contract, so this is not an immediate threat. However, ERP migrations are notoriously risky, and companies typically measure comfortable lead times for big ERP moves (migrations or re-platforming via IaaS) in years, not months.
Like other managed service providers (MSPs), Skytap has been gaining more production workloads, as opposed to hosting copies of production systems for disaster recovery and high availability purposes, which is how many MSPs get their starts. That is helping it to build momentum as data center migrations start to build.
“We’re starting to see, as customers get further into the cloud journey, they’re saying ‘What do I do with my legacy estate?’” Wrobel said. “That’s where Skytap becomes wildly interesting.”
The Azure cloud is a natural landing spot for companies that are decommissioning their Windows systems and other components of the Microsoft stack, even with the European Union’s fresh probe into Microsoft’s business practices. When those companies also have sizable investments in IBM i, the Skytap solution becomes more interesting.
“They don’t have a logical landing spot other than refactoring the Power estate, which, as you know, is a very heavy lift,” Wrobel said. “We’re starting to see production workloads like JD Edwards, some specific applications with financial services space that become repeatable patterns for customers to move.”
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