BAT signs £132m deal for cloud-based SAP

British American Tobacco (BAT) has signed a seven-year 160 million (£132 million) cloud-based SAP business software deal with Deutsche Telekom's IT subsidiary T-Systems.

The cloud contract will help BAT support its 200-plus brand portfolio, including Dunhill, Kent, Pall Mall and Lucky Strike.

BAT uses SAP systems to operate its businesses around the world and is investing in a consolidation programme that will culminate in a single instance of SAP operating in 65 global markets by 2016.

Over a two-year period BAT and T-Systems will move the business software into the cloud "so that SAP services will exactly mirror BAT's cyclical demands and will couple cost to real usage", said BAT.

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Phil Colman, BAT CIO, said: "Our IT strategy focuses on a single portfolio of connected applications running on standardised technology to drive competitive advantage across the business. The T-Systems deal will help us to deliver that strategy."

As part of the contract T-Systems will consolidate currently ten international BAT data centres into three global data centres in Europe, Asia and South America.

SAP recently launched a multi-tenant version of its Business One ERP suite, which will be sold exclusively through partners as Business One OnDemand. Multi-tenancy is a software architecture commonly used by SaaS vendors, where multiple customers share the same instance of an application but with their corporate data locked away from each other.