SAP's revenue mix is slowly shifting to cloud, preliminary figures show

SAP expects to report a 2 percent rise in Q4 revenue, with the propoertion from cloud subscriptions and support up 66 percent

SAP's business is gradually shifting to the SaaS (software as a service) model while sales of its Hana in-memory database platform continue to grow quickly, according to preliminary fourth-quarter and year-end results the company released Friday.

Software revenue for the quarter ended Dec. 31 fell 2 percent on an IFRS (international financial reporting standards) basis to €1.9 billion (US$2.58 billion), while cloud subscriptions and support jumped 66 percent to €209 million ($284 million), SAP said.

Software and related services revenue, which includes the lucrative annual maintenance payments on-premises software customers make to SAP, rose 3 percent to €4.37 billion ($5.94 billion).

Total revenue for the quarter was up 2 percent to €5.1 billion ($6.9 billion), while operating profit grew 13 percent to €1.8 billion ($2.4 billion).

For the full year, revenue grew 4 percent to €16.81 billion ($22.86 billion), while operating profit rose 10 percent to €4.47 billion ($6.07 billion), SAP said.

SAP's co-CEOs hailed the results in a prepared statement.

"We are one of the few global tech companies that has successfully managed the transition to the cloud while growing our core business and improving our profitability at the same time," said Bill McDermott and Jim Hagemann Snabe . The latter will be stepping down this year.

Hana revenues served as "a major growth engine" in SAP's fiscal 2013, rising 69 percent to €664 million ($903 million), the company said. Customers are "showing strong interest" in running their SAP Business Suite implementations on Hana, as well as on SAP's Hana-powered hosting service, according to the company.

SAP is hoping to convince customers that have long used Oracle's database underneath Business Suite to switch over to Hana, but must contend with a looming Oracle database upgrade cycle as well as an upcoming in-memory option for the rival product.

Databases serve as an anchor for applications vendors, given they can not only support the company's packaged products but also bespoke applications customers might build to fit a specialized business need, making the task of shifting to an alternative that much more difficult.

Friday's preliminary earnings announcement didn't mention any notable wins for Hana over Oracle's database, but more details could come with the finalized fourth-quarter and year-end results on Jan. 21.

Join the Good Gear Guide newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags business issuesSAPfinancial results

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Peter Sayer

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Armand Abogado

HP OfficeJet 250 Mobile Printer

Wireless printing from my iPhone was also a handy feature, the whole experience was quick and seamless with no setup requirements - accessed through the default iOS printing menu options.

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?