SAP claims earnings doubled expectations, announces plans to unify brands

SAP1As SAP’s year-end figures were published the cloud giant has unveiled plans to clarify the positioning of all its cloud offerings in an open letter to customers.

SAP said the preliminary figures for its financial year ending on December 31st outpaced the growth of the rest of the cloud industry and exceeded its own expectations.

SAP’s non-IFRS cloud and software revenue grew by 20%, double the original outlook of 8 to 10% growth. The ‘exceptional momentum’ claimed by SAP will be even great next year, it claimed, as cloud sales bookings increased by 103% in the full year to $0.97bn (€0.89 billion) and 75% in the fourth quarter to $0.35bn (€0.35 billion). Cloud subscriptions and support revenue was $2.49 bn (€2.30 billion) for the full year and Operating profit was $6.89 bn (€6.35 billion).

Use of the in memory platform SAP S/4HANA doubled each quarter, claims SAP, which has 2,700 customers by the end of 2015. “We decisively beat our full year guidance for cloud and software revenue,” said Bill McDermott, CEO of SAP.

Based on these figures, the outlook for next year should see faster growth, predicted SAP. Cloud subscriptions and support revenue are projected to be up to $3.31bn (€3.05 billion), which would represents a growth rate of 33%. Meanwhile, non-IFRS cloud and software revenue will increase by up to 8% on the 2015 total of $18.69 (€17.23 billion). Operating profit, it said, will be around the same as 2015’s total, with maximum expectations being $7.27Bn (€6.7 billion).

A key to managing operating profit will be a simplification of SAP’s software portfolio, explained Chief Marketing Officer Maggie Chan Jones on the SAP web site.

“Our portfolio for digital business has also expanded through acquisition and we are stronger for customers, partners and ourselves,” said Jones. That growth needs to be managed, Jones warned.

In 2016 SAP will bring its acquired companies closer together under a unified SAP brand that includes Ariba, Fieldglass, Hybris and SuccessFactors. The acquisitions will now be known as SAP Ariba, SAP Fieldglass, SAP Hybris, and SAP SuccessFactors respectively.

Jones claimed this will bring clarity to customers and ecosystem partners across all ‘touch points’. “Our goal is to deliver a simpler, superior customer experience, with all the SAP brands going to market with a consistent, unified look and feel,” said Jones.