The group just got the curve with the cloud

SAP headquarters

The group has been putting all its resources in the cloud for a year.

(Photo: dpa)

The preliminary quarterly figures from SAP are a positive surprise, the company is convincing in all areas. But one item stands out: the S / 4 Hana Cloud program package is growing in a way that is rarely seen with software manufacturers of this size. There were 276 million sales from the beginning of July to the end of September, an increase of almost 50 percent.

The sum is still manageable, but the dynamism is high. This is precisely what is of paramount importance: The product category that the software manufacturer from Walldorf once invented is getting an update for the cloud age. The competition seemed to be more advanced so far. The demand for the new SAP product is an indication that the Dax group is reacting just in time.

S / 4 Hana is a system for managing business-critical processes such as procurement, controlling or finance, called Enterprise Resource Planning (ERP) in industry jargon. The five founders of SAP developed this principle back in the 1970s. Here the group has remained the market leader through all the technical upheavals.

The switch from classic licensed software to cloud computing, which is currently taking place in the entire IT industry, has opened up a new opportunity for competitors to shake things up – similar to the introduction of electromobility in the automotive industry. It takes a different technology, a different business model, a different culture.

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After several acquisitions, SAP was able to impress the capital market with a considerable cloud business. In the core business of ERP, however, it took him far too long to develop a competitive new product.

In a rating by the influential market researcher Gartner, Oracle, Microsoft and Infor are leading, SAP is still on a par with niche providers such as QAD and Epicor. An embarrassing result.

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As long as customers prefer to process sensitive data within their own organizations, SAP was able to hide the situation. However, with the pandemic, the cloud has become the standard. There is a risk that the competition will do the business. It was therefore inevitable that Christian Klein’s board of directors put all its resources into it a year ago.

The numbers show that SAP Cloud can. However, it will only be clear later whether the reaction was timely: The good quarter must be followed by many more.

More: SAP raises forecast for the third time this year – share rises sharply

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