SAP has been through a few ups and downs over the past year but remains focused on being a software layer for enterprises that can run on top of already-established cloud infrastructure. And the company remains committed to maintaining the structure of its work with hyperscalers and enterprises.

During a question-and-answer session at this week’s virtual SAP Sapphire Now event, SAP CEO Christian Klein said that the vendor will remain focused on directly targeting specific markets with its software platform where it already has a strong presence and then will continue to work with partners on other growth opportunities. This comes as SAP has increased its focus on using the cloud as part of its service offerings.

“The hyperscalars are our best friends on the cloud infrastructure side because this is not a business where SAP is actually playing and also doesn't want to play in the future,” Klein explained. “They have huge scale, they have infrastructure which provides our customers with the elasticity they need and with that comes a low [total cost of ownership]. Partnering with them is the best decision we could have ever made.”

But, some of those hyperscalers are also tangentially SAP competitors. While they might not focus on providing a software layer for enterprises as specifically as SAP does, they are starting to grow their enterprise businesses. And this could leave SAP somewhat exposed.

“Now, the point in these partnerships is that everyone needs to be aware of what is the playing ground,” Klein said in acknowledging the possible overlapping. “We want to go up the stack, we want to own that as we are very good at that. And they provide the cellar of the house with the cloud infrastructure.”

Klein highlighted just how entrenched SAP had become with enterprises, saying that its Enterprise Resource Planning (ERP) assets were worth “multiple of billions, so this is an asset we have … We just need to make sure we package this up in a very good partnership for both sides of the house.”

SAP last year struck a deal with Microsoft to have the cloud giant resell components of SAP’s Cloud Platform alongside its own Azure cloud service. That deal built on its previously announced Embrace reference architecture that is designed to smooth a path into SAP’s S/4HANA cloud platform that has grown increasingly complex and daunting for an enterprise’s IT department.

Microsoft played top billing at the initial Embrace launch and continues to be a big part of SAP’s public cloud focus. Former SAP co-CEO Jennifer Morgan explained during that launch that based on SAP’s initial data, it wanted to “cut its teeth and work with Microsoft … They have put in the work on this.”

“In the past we were going to our customers with too many specific projects,” Morgan said. “To have that SAP and Microsoft Azure reference architecture it makes it more clear for our customers.”

Klein said that SAP was in “constant dialogue” with the other hyperscalers like Amazon Web Services (AWS) and Google Cloud Platform (GCP), though hinted that future collaboration could be segmented.

“The good thing is that SAP’s portfolio is not only consisting of ERP or S/4HANA, there are also other places in the portfolio where we definitely want to partner with the other hyperscalers and we are in constant dialogue with them,” Klein said.

Klein is also confident that SAP can defend its presence in managing the application layer for enterprises and having hyperscalers provide the underlying cloud infrastructure. However, he added that “it’s only defensible if we are doing a good enough job.”

He also defended against claims that SAP’s platforms are complex to run, though that defense did not completely argue the point.

“I hear a lot of talk about how SAP is somehow complex, but also in all fairness when you run the supply chains of the world, when you run logistics, when you run finance this is perceived as a bit more complex than maintaining a sales pipeline,” Klein said. “When you then develop the software there is some complexity per se because these systems processes, especially in the supply chain … that's a business which is on the one hand a bit more complex but also very sticky.”

While on the topic of defense, Klein also spent considerable time apologizing for the event’s opening keynote session that technically collapsed before it could even begin.

“There's clearly one decision which I already regret: to outsource our platform to a third-party provider,” Klein said. “Clearly, let me apologize first. I have to take the accountability for that. As I'm now the CEO of this company, at the end it's up on me then to deliver such a show with the required quality.”

SAP had previously taken a $39 million charge during the first quarter tied to changing its own annual event to a virtual event and other customer event changes.

Klein recently took over sole leadership of SAP earlier this year when the company ditched what had been a dual-leadership structure that included Morgan. SAP sited the ongoing COVID-19 pandemic as the reason for the move.

“More than ever, the current environment requires companies to take swift, determined action which is best supported by a very clear leadership structure,” a company statement read. “Therefore, the decision to transfer from co-CEO to sole CEO model was taken earlier than planned to ensure strong, unambiguous steering in times of an unprecedented crisis.”

Morgan and Klein were named to the co-CEO position last October, when SAP’s previous CEO Bill McDermott abruptly resigned. Morgan had previously served as president of the company’s Cloud Business Group. She left the company on April 30. Klein has been with SAP for 20 years, and most recently served as its COO, where he oversaw the company’s flagship S/4HANA product.

Klein's ascension also comes in the wake of SAP revamping its organizational structure, which itself followed recent changes at the top of that structure. The organizational revamp included the reassignment of operational divisions to its executive team and the trimming of its board.