SAP comes out with excellent revenue performance in 2016

SAP revenue in 2016Business software major SAP today announced excellent financial performance in 2016 – driven by revenue growth in cloud and software business.

SAP’s 2016 revenue rose 6 percent to €22,062 million, while Q4 revenue grew 6 percent to €6,742 million. SAP’s employee base increased 9 percent to 84,183.

Cloud and software revenue grew 7 percent in 2016. Cloud subscriptions and support revenue was €2.99 billion. New cloud bookings, the key measure for SAP’s sales success in the cloud, increased 31 percent to €1.15 billion.

Cloud subscriptions and support backlog increased 47 percent, reaching €5.4 billion. New cloud bookings and cloud backlog are SAP’s lead indicators for continued strong cloud growth.

Total of cloud subscriptions, support revenue and software support revenue exceeded 61 percent of total revenue in 2016.

“Taking a multideployment model approach to ERP has paid off as SAP Business Suite 4 SAP HANA (S/4HANA) momentum is largely responsible for single-digit on-premises growth, while 31 percent year-to-year cloud continues to be driven by a combination of S/4HANA, workforce management and business network offerings,” said Kelsey Mason, analyst at Technology Business Research.

Technology Business Research said SAP will create new revenue streams by continuing its push down market, leveraging the pending release of S/4HANA Public Cloud, updates to Business ByDesign and an ecosystem of partners. SAP’s investments in its SMB-tailored portfolio help the vendor move down market and strengthen its ability to address customers’ two-tier ERP needs.

Oracle’s recent acquisition of NetSuite enables Oracle to take a similar approach to two-tier ERP, and will challenge SAP as it formalizes clear messaging and a succinct portfolio strategy in the space, according to Kelsey Mason.

SAP’s cloud and software revenue grew 7 percent in Q4 2016 – outpacing its main competitor in cloud and software revenue growth. Cloud subscriptions and support revenue grew 31 percent to €827 million. New cloud bookings were up 40 percent in the fourth quarter and reached €483 million in Q4.

S/4HANA adoption doubled to more than 5,400 customers. SAP added 1,300 additional customers including 30 percent new SAP customers to the S/4HANA platform. Nike and Ameco Beijing selected S/4HANA in the fourth quarter.

Burger King Brazil selected SAP Cloud Platform to analyze sales in real time to improve marketing strategies, manage store performance, and improve the customer experience through the Internet of Things, Gamification, and mobility.

The customer count for SAP SuccessFactors Employee Central, which is the core of our Human Capital Management offerings, exceeded 1,580 at the end of the fourth quarter. Companies like Mercedes-AMG and Valentino purchased SAP’s workforce management solutions in the fourth quarter.

SAP said its Customer Engagement and Commerce achieved double-digit new cloud bookings and cloud subscriptions and support revenue growth in the fourth quarter. Brooks Brothers selected SAP’s customer engagement and commerce solutions in the fourth quarter.

Cloud subscriptions and support revenue in the SAP Business Network segment was up 19 percent in 2016.

SAP revenue from cloud and software rose 9 percent in EMEA region. Cloud subscriptions and support revenue grew 35 percent. SAP had double-digit software licenses revenue growth in Germany and the UK.

SAP grew cloud and software revenue by 5 percent and cloud subscriptions and support revenue by 27 percent in the Americas region. In Latin America, SAP had strong double-digit growth in software licenses revenue in Mexico.

SAP’s cloud and software revenue rose 9 percent with cloud subscriptions and support revenue growing 54 percent in the APJ region. SAP had double-digit software licenses revenue growth in China, India and Japan.

Baburajan K
[email protected]

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