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SAP Q3 2017 results show steady growth in cloud revenue to €937m

SAP’s third quarter 2017 results show steady growth in cloud revenue, S/4 Hana adoption, and some uptake for its “digital transformation” spearhead SAP Leonardo

SAP has reported third quarter 2017 revenue of €5.59bn, of which €937m was cloud, around 17% of the total. Total revenue was up 4% from the same quarter a year ago.

Its flagship enterprise resouce programming (ERP) system S/4Hana now has 6,900 customers, the supplier stated.

New cloud bookings grew by 14% in the third quarter, totaling €302m. Total cloud revenue was up 3% as a share of total revenue on the same quarter last year, when it was 14%.

S/4 Hana adoption was said to stand at more than 6,900 customers, up by 70% comparing this quarter with the same quarter in 2016.

The company said it added some 600 additional customers, of which 40% were new to SAP. In the same quarter last year, it reported 400 new customers for the ERP that runs on the Hana in-memory, columnar database. Shell and China International Marine Containers were cited as new customers for it in the third quarter of 2017.

SAP Leonardo has been the moniker the supplier has been using for its artificial intelligence (AI), machine learning, internet of things (IoT), and blockchain product suite, as announced at this year’s Sapphire customer conference.

The supplier used the conference in May 2017 to advance Leonardo as a concept, made up of a “toolbox” of its internet of things (IoT), artificial intelligence (AI) and blockchain technologies. Its purpose is to realise digital transformation for its customers.

South Korea-based Hanon Systems and US-based Citco Technology Management were among those that have adopted Leonardo systems in the third quarter.

The centrepiece of the supplier’s human resources (HR) offer, the cloud-based SuccessFactors Employee Central had more than 2,000 customers at the end of the third quarter. La Liga, in Spain, and Bancolombia, a Columbian commercial bank, chose SAP’s workforce management systems in the third quarter.

Read more about enterprise software results

  • Same year-ago quarter: SAP’s third quarter 2016 financial results show 28% growth in cloud revenue, and the addition of 400 customers for its flagship S/4 Hana product.
  • Oracle’s first-quarter fiscal 2017 revenue increased by 2% year-on-year, with cloud revenue for the quarter reaching $969m.
  • SAP’s most recent second-quarter 2017 revenue of €5.78bn included €932m for cloud subscription and support – 16% of the total – while new S/4 Hana customers included Centrica and Google.
  • Analyst tips Microsoft Azure to overtake AWS as cloud revenue market leader in 2017.

SAP CEO Bill McDermott said in a statement: “SAP has evolved from the world’s system of records to the platform for the digital revolution. Led by S/4 Hana, we are delivering intelligent business applications built on the most data rich architecture ever created.”

CFO Luka Mukic added: “Our performance, portfolio and pipeline make me truly confident that we will deliver on our mid-term ambitions.”

The supplier said it had experienced “an especially strong quarter in Germany and Spain”. In the Europe, Middle East and Africa (Emea) region as a whole, cloud and software revenue increased by 8%.

Emea was, as ever, the strongest region for the Germany-headquartered supplier, with €2.5bn (rounded). The Americas reported €2.2bn (also rounded), and Asia-Pacific and Japan €849m.

The Americas led on cloud subscriptions and support, with €576m in revenue. Emea had cloud revenue of €259m, and APJ €102m.

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