{"id":41476,"date":"2020-10-26T13:45:00","date_gmt":"2020-10-26T13:45:00","guid":{"rendered":"http:\/\/icloud.pe\/blog\/?guid=3e193c7e46788a706163826875b18e21"},"modified":"2020-10-26T13:45:00","modified_gmt":"2020-10-26T13:45:00","slug":"sap-goes-all-in-on-cloud-as-it-abandons-mid-term-targets","status":"publish","type":"post","link":"https:\/\/icloud.pe\/blog\/sap-goes-all-in-on-cloud-as-it-abandons-mid-term-targets\/","title":{"rendered":"SAP goes “all-in” on cloud as it abandons mid-term targets"},"content":{"rendered":"


\n Bobby Hellard<\/a><\/span>
\n <\/span><\/p>\n

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26 Oct, 2020<\/span><\/div>\n<\/p><\/div>\n<\/div>\n

\n<\/a><\/p>\n

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Software giant\u00a0SAP<\/a>\u00a0saw its\u00a0market valuation drop by \u20ac25 billion (\u00a327.8bn) after it announced plans to go “all-in” on cloud computing during its third-quarter earnings call.\u00a0<\/p>\n

The German firm is on track for its worst trading day in 12 years, according to\u00a0CNBC<\/em><\/a>, after slashing its revenue forecast for 2020.<\/p>\n

Fearing that lockdown restrictions would affect demand for its business relations and customer management software into 2021, the tech giant has announced plans to go “all-in” on\u00a0cloud computing<\/a>. The announcement\u00a0means that SAP is abandoning medium-term profitability targets which could take longer than expected to recover from the coronavirus pandemic.<\/p>\n

<\/p>\n

\n“As the CEO of SAP, I have to be focused on the long-term value creation of this company,” SAP CEO Christian Klein told\u00a0CNBC<\/em>‘s “Squawk Box Europe” on Monday.\u00a0“So I cannot trade the success of our customers and the significant revenue potential of SAP against short-term margin optimisation.”<\/p>\n

Investors reacted badly to the announcement, dumping shares and wiping \u20ac25 million off SAP’s market value.\u00a0However, some will point to a year of turmoil following the exit of long-term CEO Bill McDermott and the less than successful\u00a0‘tandem’ leadership<\/a>\u00a0that ended in April when Klein became the company’s sole CEO.\u00a0<\/p>\n

At that point, with the coronavirus pandemic starting to hit global operations, SAP had focused on medium-term “ambition” which was favoured by McDermott on the estimates that it would lead to profit margins growing by at least a percentage point up to 2023.\u00a0<\/p>\n

The change, however, effectively means that profit margins will stagnate over the next three years. But cloud revenue, from subscription-based services, is now expected to triple to \u20ac22 billion by 2025. As such, total adjusted revenue is being forecast at \u20ac36 billion with an operating profit of \u20ac11.5 billion. <\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

Bobby Hellard<\/p>\n

26 Oct, 2020 <\/p>\n

Software giant\u00a0SAP\u00a0saw its\u00a0market valuation drop by \u20ac25 billion (\u00a327.8bn) after it announced plans to go “all-in” on cloud computing during its third-quarter earnings call.\u00a0
\nThe German firm is …<\/p>\n","protected":false},"author":403,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-41476","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/posts\/41476","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/users\/403"}],"replies":[{"embeddable":true,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/comments?post=41476"}],"version-history":[{"count":1,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/posts\/41476\/revisions"}],"predecessor-version":[{"id":41477,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/posts\/41476\/revisions\/41477"}],"wp:attachment":[{"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/media?parent=41476"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/categories?post=41476"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/tags?post=41476"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}