For a long time, Germany’s largest technology group, SAP, had to be accused of oversleeping the trend towards data storage via the Internet. Now the DAX company is strongly expanding its business with cloud products.
The leading German software company SAP has significantly increased the pace of relocating its core business to the cloud. The revenues for the flagship product S / 4Hana Cloud rose in the first quarter by 36 percent to 227 million euros, as the Walldorf-based DAX group announced. This was the first time he published figures on this development. S4 / Hana Cloud is a digital development and integration platform from SAP for software applications. It is intended to enable companies to access data in real time via the cloud.
More customers should switch
The 227 million euros in sales with the S / 4 Hana Cloud make up only a fraction of the total cloud revenues, which were 2.15 billion euros from January to March – an increase of seven percent. SAP was able to increase the cloud revenues contractually guaranteed for the next twelve months by 19 percent to 7.6 billion euros. In the case of the S4 / Hana Cloud, this increase was 43 percent. The Walldorf-based company is now taking its customers by the hand more closely with the long reluctance to switch to the cloud. To this end, SAP boss Christian Klein introduced the “Rise with SAP” bundle offer in January, which is intended to enable customers to switch to the cloud versions of the SAP standard software more quickly. It now seems to be starting to take effect.
Strongest cloud growth in five years
“The first quarter of 2021 was unique in many ways. We had the highest growth in orders for the cloud business and software licenses in five years, and our operating income and operating margin rose the strongest in ten years,” said SAP CFO Luka Mucic . In the medium term, the accelerated conversion of SAP to the cloud business will accelerate sales growth and give the company significantly more resilience and planning security.
Profit increase of 70 percent
Because of the investments in the “Rise with SAP” program this year and next, SAP is also accepting lower earnings. In the first quarter, the DAX group was nevertheless able to increase its net profit 70 percent to 1.72 billion euros. The fresh figures are well received on the stock market. In an initial reaction, the SAP share rises up to 1.9 percent to 119 euros. That is the highest level in five months.
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