After an outstanding 2022, SAP has jumped out to a strong start this year with S/4HANA Cloud revenue up 77%, Business Technology Platform revenue up 47%, and overall cloud business up 24%.
Those numbers reflect strong momentum across all parts of the SAP cloud business. And while Q1 cloud growth did not top 30% as it did for much of last year, the 24% boost for its overall cloud business is exactly on line with the guidance offered by CEO Christian Klein three months ago.
That performance in 2022 made SAP the world’s second-fastest-growing major cloud provider, behind only Oracle and just ahead of #3 Google Cloud.
“We have entered a powerful new phase in our strategic transformation, with topline and bottom line results clearly demonstrating the tipping point we passed in the fourth quarter of 2022,” Klein said in the earnings release.
I’ll have some deeper insights tomorrow on SAP’s outlook, but here are some highlights from Q1:
- Total revenue of $8.19 billion, up 10%
- Cloud revenue of $3.5 billion, up 24%
- Current cloud backlog of $12.26 billion, up 25%
- S/4HANA Cloud revenue of $788 million, up 77%
- S/4HANA Cloud backlog of $3.76 billion, up 78%
- PaaS revenue (Business Technology Platform plus SAP Signavio) of $530 million, up 47%
Also, SAP reported that when the sale of Qualtrics to a private-equity firm is complete, SAP will receive $7.7 billion for its ownership stake in the experience-management vendor.
To me, the numbers that really jump out are the very strong backlog results for both S/4HANA Cloud (78%) and the overall cloud business (25%) and the ongoing high demand for SAP’s Business Technology Platform (up 47%).
Plus, in a wickedly competitive business like the enterprise cloud, it never hurts to get an infusion for $7.7 billion as SAP will soon receive for its Qualtrics stake, and no doubt Klein and team will put that money to good use as the company looks to sustain that 22% to 25% growth rate throughout the year.
To hear practitioner and platform insights on how solutions such as ChatGPT will impact the future of work, customer experience, data strategy, and cybersecurity, make sure to register for your on-demand pass to Acceleration Economy’s Generative AI Digital Summit.