The company’s financial results from late last year show their Cloud strategy is succeeding.
SAP has announced its preliminary financial results for the fourth quarter and full year ended December 31, 2020. The results show that while the company’s revenues slowed overall, their push to center their Cloud business grew.
“SAP’s business performance sequentially improved in the fourth quarter even as the COVID-19 crisis persisted and lockdowns were reintroduced in many regions”, the company said.
“Cloud revenue in the fourth quarter continued to be impacted by lower pay-as-you-go transactional revenue, mainly Concur business travel related,” they explained.
“However, continued high demand for e-commerce, Business Technology Platform, and Qualtrics solutions along with several competitive wins…produced a strong finish to the year for SAP’s cloud business.”
2020 performance “better than expected”
The company also saw strong early take up of its new holistic business transformation offering among pilot customers. This trend contributed to the positive cloud performance in the quarter.
“Both North America and Europe experienced a better-than-expected performance in cloud order entry,” they claimed. And increase in software licenses revenue reflected strong demand for SAP’s digital supply chain solutions in particular, according to SAP. In addition, the company boasted “significant competitive wins” in ERP.
“Throughout the COVID-19 crisis, SAP continues to serve its customers effectively with an embedded virtual sales and remote implementation strategy,” the company says.
Maintaining a “disciplined approach” to spending
SAP claim to have retained a disciplined approach to hiring and discretionary spend while capturing natural savings e.g. from lower travel, facility-related costs and virtual events.
“In combination with the strong topline performance, these actions drove higher operating profit (IFRS and non-IFRS at constant currencies) and operating margin despite the challenging macro environment,” they say.
Christian Klein, SAP’s CEO, crowed about his company’s 2020 performance. “The world’s leading companies are turning to SAP to become intelligent enterprises,” he said.
“We are reinventing how businesses run by accelerating our customers’ transformation in the cloud. Our strong finish to the year and the upcoming launch of our new holistic business transformation offering position us well to meet our new outlook targets.”