SAP 2017 results: Cloud revenue nears €3.8bn, 7,900 S/4 Hana customers

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SAP has announced 2017 cloud revenues of €3.769bn, 16% of its overall revenue of $23.461bn. This is a 2% increase in cloud, as a proportion of overall, revenue over 2016.

SAP has also announced 7,900 customers for its flagship enterprise resource planning (ERP) system, S/4 Hana, based on its in-memory, columnar database, Hana. In 2016, it announced 5,400, and this development represents a 46% increase in S/4 adoption from 2016 to 2017.

It also announced the $2.4bn acquisition of Callidus Software, a US company offering a cloud-based “lead to money” service, which includes sales performance management (SPM) and configure-price-quote (CPQ). 

Simultaneously, SAP announced its fourth quarter results. It said new cloud bookings amounted to €591m, a 22% increase on new cloud bookings in the same quarter in 2016.

Operating profit for the year was down 5%, compared with 2016, to €4.877bn, while profit after tax was €4.056bn, 12% up on 2016.

Bill McDermott, CEO of SAP, said: “We promised fast cloud growth – we delivered. Only SAP continues this growth trifecta at scale with cloud, software and operating income. The record setting adoption of S/4 Hana has ignited the entire SAP cloud.”

Luka Mucic, CFO of SAP, said: “We ended the year strongly with new cloud bookings surging 31% on top of a stellar prior Q4. As promised, we initiated the margin turnaround with a Q4 Non-IFRS operating margin of 35.2% at constant currencies.”

The supplier’s in-memory, columnar data base platform Hana has been at the centre of its strategy since 2010, when the first database was sold. S/4Hana, the supplier’s full system for planning enterprise resources, has been its flagship since February 2015.

The company said S/4 adoption grew to more than 7,900 customers, up around 46% year over year. In the fourth quarter, approximately 1,000 additional customers signed up, of which more than 40% are new to SAP. The supplier cited Standard Chartered, Puma, Emirates Group, Unilever and Philips66 as S/4 customers for the quarter.

Since mid-2016, SAP has been bringing together its artificial intelligence (AI) and machine learning activities – mostly focused on the internet of things (IoT), but also blockchain – under the banner Leonardo. The supplier said the San Francisco 49ers, an American Football team, is among the customers for Leonardo.

In relation to SAP’s acquired cloud businesses, approximately 3.1 million companies traded more than $1tn on the Ariba network (for procurement), more than 50 million users processed travel and expenses with Concur (for expenses management), and more than 4.3 million flexible workers in 180 countries were managed with Fieldglass (for managing casual labour).

SuccessFactors Employee Central, which is the core of SAP’s human capital management (HCM) offering, ended the year with more than 2,300 customers and signed up Foxconn, Akzo Nobel and Beiersdorf.

In Europe, the Middle East and Africa (Emea), SAP reported €10.415bn revenue, along with €9.347bn in the Americas, and €3.699bn in Asia-Pacific-Japan. The Americas led on cloud revenue, with €2.321bn, with Emea in second place with €1.029bn.

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