NewsDeals&Wins
SAP reports record cloud revenue
S
AP ’s turnaround is in full swing having reported record cloud revenues in its Q4 and full year 2021 results with continued cloud acceleration across the board. After a shaky two years that saw Bill McDermott leave as CEO, the joint CEO role between Christian Klein and Jennifer Morgan failed to work out, and slower than anticipated uptake for S/4HANA - it seems as though RISE with SAP and positive market conditions have breathed new life into the German vendor. For the fourth quarter, SAP saw rapid expansion of current cloud backlog to €9.45bn, up 32 percent. Driven by strong adoption of RISE with SAP, S/4HANA current cloud backlog is up 84 percent to €1.71bn, while cloud revenue increased by 28 percent to €2.61bn. SAP’s full year results surpassed the high end of its revised 2021 out-
look for cloud and software revenue and operating profit, with IFRS cloud revenue up 17 percent and cloud and software revenue up by 4 percent. Most encouraging of all is the rate at which SAP is selling S/4 licences. Whilst the RISE proposition is not necessarily an accelerator for S/4HANA, the new commercial package that effectively delivers ‘Transformation-as-a-Service' is clearly gaining momentum. The good news is tempered slightly by the fact that overall revenues limped to just a two percent rise on last year’s total. After raising its 2022 outlook, and being mindful that it is SAP’s 50th anniversary in June, we expect to see SAP’s performance continue its upwards trajectory and reach a crescendo by early summer. However, there are a number of things happening in the background with SAP at the moment that may impact its sales
and conversions: there’s a big change to discounts for anything other than RISE with SAP and a new deal for PMCs (partner managed clouds) that effectively allows the intermediary to sign up to RISE terms rather than the consumer. Both of these tactics are likely to push more people towards RISE, even if some end up there a little reluctantly. Christian Klein, CEO at SAP, said: “The magnitude of our cloud strength is evident. More and more companies are choosing SAP to help them transform their businesses, build resilient supply chains and become sustainable enterprises as they move to the cloud. This momentum is reflected in the tremendous success of ‘RISE with SAP’, our signature cloud offering, as well as excellent growth across our entire portfolio. Our growth acceleration points to even greater potential ahead.”
visit us
013_NEWS_SECTION.indd 13
E R P. T O D AY
13
04/02/2022 19:07
