UK spearheads Emea cloud revenue growth in SAP's Q1 2015 results

SAP’s results for the first quarter of 2015 indicate European cloud subscription and support revenue grew by 114%

SAP’s results for the first quarter of 2015 indicate European cloud subscription and support revenue grew by 114%, “driven by a very strong performance in the UK”, according to the supplier.

Overall non-IFRS revenue for the quarter was €4.502bn, of which 11.3% – €509m – derived from the cloud.

In 2014, SAP stated that full-year, non-IFRS cloud subscriptions and support revenue increased by 45%, reaching €1.1bn. This represented 45% growth in cloud revenue for the year, and 72% in the fourth quarter. It was around 6% of SAP's overall revenue of €17.58bn.

Non-IFRS operating profit for the first quarter of 2015 increased by 15% to €1.06bn.

The supplier had a busy first quarter, with the launch of S/4 Hana, trumpeted by CEO Bill McDermott as a revolutionary development of its core enterprise resource planning (ERP) suite. It is built on the supplier’s in-memory database platform, Hana, and designed on the principles embodied in its Fiori suite of apps.

The supplier stated it has been a “fast start for SAP S/4Hana, with over 370 customers signed up globally”.

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The number of Hana customers has exceeded 6,400, almost doubling from 2014.

SAP's northern Europe genereal manager, Darren Roos (pictured), said the growth in cloud revenue had surpassed expectations. He also reported 42 new customer deals in the first quarter for northern Europe.

“The UK business should lead the way, but we had a phenomenal quarter in the Nordics and Benelux. And we have done well across all the lines of business applications – human capital management, procurement, and CRM [customer relationship management]," he said. "We are now winning multimillion-euro CRM deals in a way we haven’t before."

“From an HR [human resources] cloud perspective, we are the market leader with SuccessFactors. Admittedly, in these line of business cloud applications, like HR and procurement, the numbers are still relatively small, but there is massive latent demand.

“I was with two customers in Belgium today who have disparate IT landscapes and multiple ERP systems that they need to consolidate and rationalise on a single platorm, and our ‘run simple’ message is resonating.”

In relation to the cloud, Roos said: “We are increasingly seeing a greater understanding. The artificial hype of a few years back is going. We are now seeing more conservative customers moving in this direction as well.”

The SAP business network, which comprises cloud properties Ariba, Concur and Fieldglass, is stated to have reached revenue of €368m in the first quarter, a year-on-year increase of 207%.

In the Americas region, non-IFRS cloud subscriptions and support revenue grew by 136%. And in the Asia-Pacific and Japan region, non-IFRS cloud subscriptions and support revenue grew by 137%.

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