SAP 2016 results: cloud revenue almost €3bn, 5,400 S/4 customers

posted in: Misc. ERP/CRM | 0

By:  Brian McKenna

SAP has announced 2016 cloud revenues of €2.99bn, 14% of its overall revenue of €22.06bn. This is 3% more cloud revenue, as an overall proportion, than in 2015.

Simultaneously, the supplier announced its fourth-quarter 2016 results, which showed a 40% increase in new cloud bookings.

The company also confirmed such bookings for the full year to be €1.15bn, an increase of 31% and a “key measure” for the supplier, it said.

Operating profit for the year was up 20% to €5.12bn, and profit after tax was €3.6bn, up 18% on 2015.

Bill McDermott, SAP CEO, said: “This is the latest in our seven-year run of profitable growth. We expanded our addressable market, acquired best-in-class assets and innovated a new generation of ERP [enterprise resource planning] with SAP S/4Hana… Our innovation agenda is accelerating in machine learning, the internet of things and blockchain.”

Luka Mucic, CFO, said in the same statement: “SAP… achieved all raised guidance metrics for the full year. Furthermore, operating cashflow was strong, with a 27% increase in 2016. New cloud bookings growth of 40% for the fourth quarter was exceptional.”

Both referred to an ambition to reach €29bn in revenue by 2020, with a 2.6 times increase in cloud sales.

The supplier’s in-memory, columnar database platform Hana has been the lynchpin of its strategy since 2010, when the first database was sold. And S/4Hana, the supplier’s full system for planning enterprise resources, has been its flagship product since February 2015.

The company said S/4Hana adoption had doubled year-on-year to more than 5,400 customers, 1.6% of its customer base of 345,000. This time last year, it claimed 2,700 customers for S/4. In the fourth quarter, some 1,300 additional customers signed up, of whom about 30% are new to SAP. Nike and Ameco Beijing selected S/4 in the fourth quarter, said SAP.

Other customers cited in the statement included Burger King Brazil, which selected SAP Cloud Platform to analyse sales in real time, and Mercedes-AMG, which bought SAP’s workforce management system in the fourth quarter. Also, Brooks Brothers selected SAP’s customer engagement and commerce product.

As regards SAP’s acquired cloud businesses Ariba, for procurement, Concur, for expenses management, and Fieldglass, for managing casual labour, the supplier reported that about 2.5 million companies traded more than $885bn on the Ariba network; more than 45 million users processed travel and expenses with Concur; and more than 3.1 million flexible workers in 135 countries were managed with Fieldglass.

In EMEA, SAP reported double-digit growth in software licences revenue in Germany and the UK. In the Latin America region, it reported strong double-digit growth in software licences revenue in Mexico, while in Asia-Pacific and Japan it reported double-digit growth in software licences revenue in China, India and Japan.