SAP acquires Dremio, Prior Labs as it builds out its data platform plan

SAP said it will acquire Dremio, an open data lakehouse player, in a move that aims to use SAP Business Data Cloud combine SAP data with non-SAP data. For good measure, SAP also acquired Prior Labs in a bid to create a flagship European frontier AI lab.

For enterprise buyers, SAP's purchase of Dremio represents the next evolution of SAP Business Data Cloud and an expansion beyond SAP-centric data. SAP CEO Christian Klein said on the company's first quarter earnings call that it is clear that AI agents need to leverage multiple data types.

Dremio's platform is based on Iceberg, an open format that has broken down data silos. Google Cloud recently launched its Agentic Data Cloud to tie together clouds and data stored on multiple platforms. Databricks and Snowflake as well as a host of other large enterprise vendors have rallied around Iceberg.

SAP Sapphire 2026 themes: AI agent accuracy, embedded domain knowledge and processes | SAP acquires Reltio to build out SAP Business Data Cloud

For SAP, the big question is whether Dremio enables the ERP giant to manage non-SAP data too. SAP said the Dremio deal complements its SAP Business Data Cloud and SAP HANA Cloud offerings. Dremio will turn SAP Business Data Cloud into an Iceberg-native lakehouse that can combine SAP and non-SAP data for AI agents.

"Combined with SAP Business Data Cloud, we can now take customers from raw, fragmented data to governed, AI-ready intelligence on a single open platform," said Philipp Herzig, CTO of SAP.

SAP made the following points:

• Dremio's serverless and elastic approach enables it to scale.
• With Dremio, SAP will deliver an open catalog built on Apache Polaris and Apache Iceberg REST Catalog API.
• SAP Business Data Cloud will give every connected engine a single point of access to unified business context.
• The Dremio-powered catalog will be the foundation of SAP Knowledge Graph.
• SAP said it will continue to support Apache Iceberg, Apache Polaris and Apache Arrow.
• Terms of the deal weren't disclosed.

Sendur Sellakumar, CEO of Dremio, and Tomer Shiran, founder of Dremio, said in a blog post that the SAP acquisition "will give us the scale and backing to accelerate our agentic vision, while also incorporating innovative SAP technologies."

The Dremio executives also said that SAP will be able to enable enterprise AI agents that can leverage the entire data estate. "Dremio isn’t going anywhere; we are doubling down on our agentic vision. Together with SAP, we will, once the transaction has closed, create a leading data platform and the foundation for an enterprise’s agentic future. Dremio customers will benefit from our increased scale and use of SAP’s innovative technologies," said Sellakumar and Shiran.

As for the Prior Labs purchase, SAP is doubling down on tabular foundation models. Prior Labs was an early mover on Tabular Foundation Models (TFMs). SAP has created a TFM with its SAP-RPT-1 model and Prior Labs will accelerate those efforts.

According to SAP, Prior Labs will continue to operate independently. SAP will invest €1 billion over the next four years in Prior Labs. The goal? Enable large language models to get the most use of structured data and make accurate predictions. To do that, LLMs need to understand tables, numbers and statistics. TFMs are designed for tabular data.

Herzig said SAP-RPT-1 was designed to leverage enterprise data and Prior Labs will take enterprise data to the next level. “Early on, SAP recognized that the greatest untapped opportunity in enterprise AI wasn’t large language models; it was AI built for the structured data that runs the world’s businesses," said Herzig.

Constellation Research's take

Holger Mueller, an analyst at Constellation Research, handicapped the deal.

"SAP's acquisitions of Dremio and Prior Labs highlight how the data landscape for SAP AI is quickly evolving," said Mueller.

Here's Mueller’s take on the SAP deals.

Positives

• It's good to see SAP working on the data foundation that powers Agentic AI.
• Tabular data is essential for enterprise vendors who operate transactional, Prior Labs make sense.
• The race for out-of-the-box context agents is in. Reltio falls in the same category (earlier acquisition).

Neutral

• The gamble is on data federation / aka zero data copy. Popular with CIO / CISO for no need to move data (permanently) - but so far has not scaled for really successful agents (even back in 2024)/
• The vendors SAP acquires (Reltio, Dremio - to some extent also Prior Labs) are commercially struggling compared to a glorious past. This doesn't mean that software assets aren't worth it, and doesn't mean an acquihire isn't possible.
• SAP hasn't figured out the automation for its AI data layer. it's not too late to figure it out.

Negatives

• SAP makes news for AI announcements, partnerships and now acquisitions. It's an escalation and may not be panic mode, but SAP has realized it is behind. Do customers realize SAP is behind.
• SAP customers could have built it all with Databricks, the partner of choice for Business Data Cloud (BDC). Now there's just more confusion. It took SAP about a year to provide the self-service Data Studio (if it ships at Sapphire). Customers want out-of-the-box from the ERP vendors' transactional data and third-party data in their foundational data lakehouse.
• Agentic Data Platform Confusion (ADPC) is real. Enterprises don't have time to replatform agents to a new data platform.

In a LinkedIn post, Constellation Research analyst Mike Ni said:

• "Dremio extends SAP Business Data Cloud toward a more open foundation for SAP and non-SAP data. That helps SAP address a hard reality: enterprise decisions do not live inside one system."
• "The strategic question for customers is whether SAP can make this open enough for heterogeneous enterprises, while still leveraging the process depth that makes SAP uniquely valuable."
• "The next platform battle will not be won by whoever stores the most data. It will be won by whoever helps AI understand the business context needed to understand not just what something means, but what matters right now and what actions are allowed, so AI can recommend, decide, act, and learn safely at scale."