SAP can be at core of digital transformation, cloud, IoT, says CEO McDermott

The company is upbeat about its prospects for 2016 and beyond and argues that its applications will be the core enabler for enterprises to transform businesses.

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SAP CEO Bill McDermott told analysts he would forward an internal document to illustrate what S4 HANA can do as he outlined a vision that makes his company's applications an enabler for enterprise transformation.

McDermott, speaking at SAP's Capital Markets Day in New York, was pitching analysts on the company's transparency, ability to navigate emerging trends and keep its core licensing and support business on track.

As a brand, SAP's plan is clear. Co-market innovation along with customers like Under Armour to raise the profile of the company.

Here's SAP's technology and business view of the world.

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In a nutshell, McDermott, along with CFO Luka Mucic, outlined an SAP that can be a cloud winner as well as one that's in the middle of the Internet of things. Along the way, McDermott mocked specialty cloud players such as Workday, but did acknowledge that SAP's run simple and live messaging has taken time to digest. The SAP CEO also knocked hardware happy rivals (think Oracle).

Also: SAP boosted by strong demand for cloud | 'Consumers got spoiled by Google': The UX revolution underway at SAP | SAP CEO McDermott will remain CEO after losing eye in accident

"We don't have any bad businesses. We're not in the hardware business. We talk about obliterating hardware spends," said McDermott. The implication is that SAP could win by focusing on verticals as well as being open.

McDermott's grand vision was followed up by Mucic's business model talk. Mucic's pitch to analysts is that it can garner nearly 30 percent of its 2020 revenue from the cloud, expand predictable revenue and preserve its core business.

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Mucic noted that each business SAP runs will have a different margin profile, but they won't be pitted against each other. For instance, SAP's private cloud unit will have lower margins, but remain critical. Services will also be critical, he said.

"We need to optimize services for outcomes for our customers," said Mucic. "SAP is truly unique. We're growing faster than most of the pure play cloud vendors and we have a growing core. We have tremendous confidence for 2016 and beyond."

Here's a look at what Mucic outlined.

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