By Freya Purnell
With cloud subscriptions and support revenue increasing 39 per cent in the second quarter of 2014, the results are proof that SAP is successfully executing its shift to the cloud and its ‘Run Simple’ strategy is hitting the market with customers, according to SAP CEO Bill McDermott.
This rate of growth makes SAP the fastest growing enterprise cloud company at scale (defined as enterprise application companies with an annual cloud revenue run rate above €1 billion).
Across the company, non-IFRS software and software-related service revenue increased 8 per cent.
SAP’s annual cloud revenue run rate is now approaching €1.2 billion, with total subscribers now exceeding 38 million.
HANA’s momentum has continued with more than 3600 customer now on the in-memory platform, and more than 1200 customers on SAP Business Suite on HANA.
SAP also showed strong performance in the Asia-Pacific Japan region, with software and software-related service revenue growing by 12 per cent, and cloud subscriptions and support revenue grew by 48 per cent. Australia and Malaysia were highlights in the region, with strong triple-digit software revenue growth.
SAP has upgraded its outlook for the full year 2014 – with cloud subscription and support revenue expected to be €1000 – €1050 million, up from €757 million, and software and software related service revenue expected to increase by 6-8 per cent from the 2013 result of €14.03 billion.
SAP also announced the launch of a new division focused on the specific needs of small and medium businesses, which represents nearly half of the world’s GDP.
The SMB Solutions Group will become the main entry point for SAP customers and partners globally, and will be headed by Dean Mansfield.
Mansfield will execute on a board strategy to redefine the SMB business solutions market by creating the next generation of simplified, integrated business applications powered by SAP HANA delivered via the cloud, to solve SMB business challenges.
In addition, Mansfield will lead the current SAP Business One application portfolio, which will continue to operate through the Global Partner Operations organisations, and plans to accelerate the adoption of SAP Business One version for SAP HANA, as well as the SAP Business One Cloud solution version for SAP HANA.
Mansfield comes to SAP with considerable leadership experience in the software-as-service industry, including six years at NetSuite, where he managed global sales and operations.
