Microsoft and SAP have agreed to expand the use of each other's cloud-based products and services delivered via the internet, they said on Tuesday.

Microsoft will use SAP's S/4 HANA database to help run its core internal financial planning functions - replacing older SAP software, while SAP will run its critical internal financial systems on Microsoft's Azure cloud service.

The long-time partners said the latest integration of their products was designed to encourage more of their joint customers to run SAP software on Microsoft Azure cloud services.

SAP encourages its customers to run its products not only on Microsoft Azure but also on rival cloud platforms from Amazon, Google, IBM and SAP's own in-house cloud services.