While many traditional tech giants have been struggling to come to terms with the connected economy, SAP’s latest earnings indicate it is adapting well to the world of cloud computing, writes Telecoms.com (Banking Technology‘s sister publication).
Admittedly progress is being made elsewhere, though when you look at companies like IBM or Intel or Oracle, these are all monsters of the 90s got beaten to the punch by the cloud native brands. Companies like Salesforce or Google fit perfectly in the cloud defined age, and it looks like SAP has successfully managed the transition without causing too much damage in the process.
The total of cloud subscriptions and support revenue and software support revenue exceeded 61% of total predictable revenue across 2016. The success of the cloud over the last 12 months has also prompted the team to increase revenue and profitability forecasts through to 2020, with the cloud business driving the majority of the growth.
Profits over 2016 increased to €3.6 billion, on total revenues of €22 billion, and the team now forecast between €28 billion to €29 billion total revenues in 2020, with profits between €8.5 and €9.0 billion. The cloud share of predictable revenues is also forecast to increase to between 70-75%.
Alongside revenues shooting upwards, share price has also seen a 14% lift across the 2016, and total number of employees has increased from 76,986 to 84,183 in 12 months. If there are still companies out there who need any help on how to transform for the connected economy, SAP looks like it can provide a couple of good case studies.