The German company SAP said its cloud service revenues grew by 41% in the third quarter after its business transformation has picked up, allowing the management to raise its annual earnings and profit forecast. SAP, the world’s most respected technology company, says it expects revenue to grow between between 7.5% and 8.5% in 2018. It predicts also growth between 9.5% and 11% of operating profit. The reason for the company’s confidence is the strong orders made for the final quarter.
“The future has never been brighter for SAP”, said the CEO of SAP, Bill McDermott, stating that the company is the world’s largest provider of cloud software by number of users.
SAP increases the sales and installations of its cloud-based business suite S/4 HANA, which replaces the licensed and server-based business software Business Suite.
The new cloud reserves rose by 37% in the third quarter at constant exchange rates. This highlights SAP’s optimistic vision and its forecast for 2018. It expects revenue from cloud services to grow 36-39% after the earlier forecast was 34-38%.
SAP is well known for managing the company’s internal processes – finance, affiliation, logistics, but it is making efforts in new areas such as marketing with the S/4 HANA package announced in June.
McDermott said the marketing package boasts a 200% growth.
SAP’s third-quarter earnings rose by 10% in fixed currency exchange rates, outpacing analysts’ expectations. The operating profit rose by 11%, but it was below forecasts.