Jan 23, 2013 (07:01 AM EST)
SAP Outpaces Oracle, Predicts Double-Digit 2013 Gains
Read the Original Article at InformationWeek
SAP set new company records of 16.3 billion euro ($21.6 billion) in total revenue for the year and 17% growth in new software and cloud subscription revenue to 5 billion euro ($6.6 billion). A defiant McDermott chided the press for misreading its fourth-quarter and end-of-year financial results released last week.
"We had a solid Q4 in the Americas despite speculation that that might not be the case," he said, noting that software and cloud subscription revenue was 770 million euro ($1.02 billion). "This is the first time we ever broke through $1 billion for software and cloud in the Americas."
[ Want more on SAP's Hana strategy? Read SAP Sweetens Hana Deal With Free Sybase Database. ]
McDermott saved most of his arrows for competitor Oracle, unleashing a salvo of unfavorable comparisons. Looking back on 2012, McDermott said SAP is growing its software and cloud subscription revenues two-and-a-half times faster than Oracle. And looking ahead, he noted that SAP is projecting new-software and cloud-subscription sales growth of 11% to 13% in 2013 for a revenue contribution of 14% to 20%.
"Oracle's guidance was 4% to 14% in software and cloud, so we start where they stop," he said.
SAP's cloud revenue totaled 342 million euro ($454 million) in 2012, but the Ariba acquisition was finalized late in the year and executives said the company is not on a $1 billion annual run rate in the cloud. Co-CEO Jim Hagemann Snabe reported that adoption of SuccessFactors HR-management applications by longstanding SAP customers accelerated in the third and fourth quarters, with 250 such customers adding the cloud-based apps in the fourth quarter alone.
"The win rate of SuccessFactors as part of SAP is three times higher [than before the acquisition], which shows that SAP customers prefer cloud from SAP," Hagemann Snabe said. Pepsico was cited as an example of an SAP customer that has added SuccessFactors enterprisewide.
SAP's Hana in-memory platform came up throughout the call as the company's touchstone of innovation. Hana sales grew at a triple-digit rate -- from a small base -- reaching 392 million euro ($521 million) in revenue in 2012. More than 1,000 customers are said to be signed on for the database with some 500 projects underway and at least 200 in production.
SAP announced the availability of its transactional Business Suite applications on Hana two weeks ago, and CTO Vishal Sikka predicted that SAP see will see a "triple digit" customer count running the combination, which is called Business Suite Powered by Hana, by the end of 2013. Getting customers to move applications onto Hana is SAP's boldest innovation gamble, as no other company is running major transactional applications like ERP on in-memory technology. The promise is not only faster performance and "never-before possible applications," but also "dramatic simplification" of IT landscapes in which separate OLTP and data warehousing infrastructure is eliminated.
That's a tall order, so all eyes will be on the leading-edge customer examples.
Attend Interop Las Vegas May 6-10, and attend the most thorough training on Apple deployment at the NEW Mac & iOS IT Conference. Use Priority Code DIPR02 by Jan. 26 to save up to $500 off the price of Conference Passes. Join us in Las Vegas for access to 125+ workshops and conference classes, 350+ exhibiting companies, and the latest technology Register for Interop today!