SAP says cloud computing to continue to boost sales

January 21, 2014
The logo of German software giant SAP is seen in front of the company's headquarters in Walldorf, southern Germany, on October 22, 2013

German software giant SAP said on Tuesday it expects its cloud computing business to continue to boost sales in the coming years, but profit growth will slow this year.

SAP said in a statement that group sales, which totalled 16.9 billion euros ($22.9 billion) last year, would rise to "at least 20 billion euros" in 2015 and subsequently to "at least 22 billion euros" in 2017.

"We expect the combination of a stable, highly-profitable core and fast-growing cloud to deliver continued growth and margin expansion," it said.

Last year, cloud revenues beat expectations by rising to 787 million euros and were projected to rise to 0.95-1.0 billion euros this year, "around 2.0 billion euros" in 2015 and then to 3.0-3.5 billion euros in 2017.

"Based on our strong global momentum from 2013 we will accelerate the transition to the cloud," said joint chief executives Jim Hagemann and Bill McDermott.

However, the investment would put the brakes on growth in operating profit, which was projected to rise by 6.0-9.0 percent to 5.8-6.0 billion euros in 2014.

And that meant that SAP would defer its longer-term targets for .

"We are sticking to our operating margin goal of 35 percent," it said.

But "in order to capture the growth opportunities in the cloud, SAP now expects this target to be reached by 2017 rather than in 2015 as previously stated," SAP said.

"We anticipate the fast-growing cloud business along with growth in support revenue will drive a higher proportion of more predictable, recurring revenue in the future," SAP said.

Explore further: Cloud-computing boosts German software giant SAP

Related Stories

SAP reports sales records in 2012

January 15, 2013

German software giant SAP said on Tuesday it achieved record sales last year, beating its full-year forecasts, even though acquisition costs hit earnings.

SAP profits up 23 percent as cloud computing grows

October 21, 2013

Business management software company SAP AG says net profit rose 23 percent in the third quarter as its cloud computing business grew rapidly and the company kept down costs by holding down hiring of new employees.

Recommended for you

Microsoft aims at Apple with high-end PCs, 3D software

October 26, 2016

Microsoft launched a new consumer offensive Wednesday, unveiling a high-end computer that challenges the Apple iMac along with an updated Windows operating system that showcases three-dimensional content and "mixed reality."

Making it easier to collaborate on code

October 26, 2016

Git is an open-source system with a polarizing reputation among programmers. It's a powerful tool to help developers track changes to code, but many view it as prohibitively difficult to use.

Dutch unveil giant vacuum to clean outside air

October 25, 2016

Dutch inventors Tuesday unveiled what they called the world's first giant outside air vacuum cleaner—a large purifying system intended to filter out toxic tiny particles from the atmosphere surrounding the machine.


Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.