SAP raises future revenue outlook on cloud business success
SAP seems to be adapting to the cloud better than expected, revising Friday its 2017 revenue expectations on the back of its cloud business.
The enterprise tech giant sees a bright future for itself in the cloud, and the numbers it shared in its press release seem to indicate as much. New cloud bookings year-over-year rose from 197 in 2014 to 344 in 2015, and cloud subscriptions and support rose from 349 in 2014 to 632 in 2015.
The company further announced that its cloud subscriptions and support backlog, what it calls "a lead indicator for continued strong cloud growth," had risen 45 percent.
SAP faced troubles initially with the move for enterprises to the cloud, and it has not had a painless adjustment. It announced that its profit after tax was down 2 percent for the quarter year-over-year, from €1.31 ($1.41 billion) billion in 2014 to €1.29 billion ($1.39 billion) in 2015.
However, it seems a shift of focus and some strategic cloud acquisitions like its 2014 Concur buy have revamped the business.
"We have transformed our company and made it leaner by shifting investments from noncore activities to strategic growth areas enabling us to capture the tremendous growth opportunities in the market," said Luka Mucic, SAP chief financial officer. "This puts us on a strong path for the future reflected in an increase of our 2017 ambition."
As cloud subscriptions and other long-term, cloud-based revenue generators come online, the company is anticipating positive results. Those cloud offerings include human resources suite SAP SuccessFactors Employee Central, which the company said had hit 1,000 global customers.
Correction: The last paragraph has been updated to clarify that SAP SuccessFactors Employee Central has 1,000 customers. SAP SuccessFactors has 4,800 customers.
Correction 2: Based on incorrect information from the company, the correction box incorrectly stated the number of customers using SuccessFactors. The number has been corrected.
- read the press release from SAP
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