Feeds

SAP's on-site apps fumble for the gearstick as cloud stamps pedal

This bandwagon is up and away, even if it's not carrying that much cash right now

  • alert
  • submit to reddit

Protecting against web application threats using SSL

The decline in SAP’s software sales has accelerated while the company’s smaller cloud operation has continued to expand.

For the tech giant's first quarter of 2014, revenue from sales of on-premises business applications fell five per cent, year on year, to €623m ($860m), under IFRS rules, according to its latest financial report [PDF].

SAP is still milking the maintenance contracts associated with its flagging on-premises software: cash from support for installations in Q1 2014 grew five per cent, year on year, to €2.2bn ($3.03bn).

Over at SAP’s cloud subscriptions and support business, sales in the first quarter of this year grew 60 per cent, year on year, to €219m ($302m) – or about a third of on-site software sold.

Combined "software and support" revenue from on-premises applications was up three per cent to €2.8bn ($3.8bn). Include the cloud division, and "software and software-related service" revenue was up five per cent, year on year, to €3bn ($4.1bn).

Overall, for Q1 2014, SAP's total revenue (IFRS) grew by three per cent to €3.6bn ($4.9bn) with IFRS EPS also up three per cent to €0.45 per share. Total pre-tax profit for the three-month period was €723m ($998m), up 12 per cent year on year.

The numbers showed a reasonable consistency in the SAP business: in Q4 2013, cloud subs and support sales grew 66 per cent while on-premises revenue fell two per cent, year on year, to €1.90bn ($2.6bn).

The financial figures were published as SAP announced it is introducing subscription-based pricing for its entire business suite hosted in its data centers. Actual prices have not yet been revealed.

SAP’s new subscription push combined with the above numbers give the distinct impression the tech giant has committed to cloud computing at the expense of its on-premises license business.

But the company's bosses reckon they won't hit next year's cloud revenue target, and pushed that goal back to 2017. They instead concentrated on the positives of the first quarter of this year, and talked of fast growth in the cloud and broad adoption of its HANA in-memory database.

SAP claimed it has more than 3,200 SAP HANA customers since launching the software in June 2011, and nearly 1,000 customers on its SAP Business Suite running on HANA, launched a year ago. ®

Choosing a cloud hosting partner with confidence

More from The Register

next story
Wanna keep your data for 1,000 YEARS? No? Hard luck, HDS wants you to anyway
Combine Blu-ray and M-DISC and you get this monster
US boffins demo 'twisted radio' mux
OAM takes wireless signals to 32 Gbps
Google+ GOING, GOING ... ? Newbie Gmailers no longer forced into mandatory ID slurp
Mountain View distances itself from lame 'network thingy'
Apple flops out 2FA for iCloud in bid to stop future nude selfie leaks
Millions of 4chan users howl with laughter as Cupertino slams stable door
Students playing with impressive racks? Yes, it's cluster comp time
The most comprehensive coverage the world has ever seen. Ever
Run little spreadsheet, run! IBM's Watson is coming to gobble you up
Big Blue's big super's big appetite for big data in big clouds for big analytics
Seagate's triple-headed Cerberus could SAVE the DISK WORLD
... and possibly bring us even more HAMR time. Yay!
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.