SAP Making $150M Australian Government Cloud Push

Germany-based software company SAP is investing AU$150 million (approx. $130 million USD) in Australia in a bid to capture government business.

The investment will include a data center to support its HANA enterprise cloud, and the creation of a new facility to be known as the SAP Institute for Digital Government. Both are set to open in the second quarter of 2015. The company does not plan to build the data center itself, but has yet to name a provider.

SAP already has solid government business in Australia, touting over 50 core federal agencies as customers. Australia’s government has a cloud-first mandate much like the United States, releasing the policy in October. The country acts as a hub to the wider AsiaPac market. The enterprise market in general is considered ripe for cloud adoption.

The institute will act as a hub for developing best practices. Officials will be able to check out prototypes and proofs of concept of SAP technologies as well as interact with technical experts.

SAP has sharpened its focus on cloud and cloud services after many years of being known for traditional software and licenses. SAP HANA in-memory cloud computing is the backbone of cloud initiatives. HANA has been the focus at recent SAP events and has been acting as the integration point for all of its services. It acquired corporate travel services giant Concur for $8.3 billion in September. Concur also does solid business with federal agencies worldwide.

There has been a lot of cloud and data center activity in Australia in response to cloud first policies and Australia’s AsiaPac hub status.

VMware is offering public cloud through a partnership with Telstra. IBM/SoftLayer recently opened a data center in Melbourne as part of a global $1.2 billion expansion. Red Cloud is undergoing a massive Australian expansion via t4 modules, adding 1 million square feet of space, and Global Switch recently completed the first phase of a $300 million Sydney data center.

“We anticipate government addressing the under investment in ICT that has occurred over the last seven or eight years, and see some large programs on the horizon,” said Damien Bueno, to Australian Financial Review. “The decision to do this had its genesis in the late part of 2012, and our decision has been supported by recent government decisions regarding cloud.”