SAP doubles S/4HANA adoption, ups revenue targets for 2020

Enterprise software giant now has 5,400 S/4HANA customers, while its move to generate more cloud revenues continues to gain momentum.

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Europe's biggest software maker said it signed up 1,300 S/4HANA customers in the fourth quarter.

Image: SAP

SAP said S/4HANA adoption doubled year over year to more than 5,400 customers as it published its full-year financial results.

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Europe's biggest software maker said it also signed up 1,300 S/4HANA customers in the fourth quarter, including Nike and Ameco Beijing. SAP added that 30 percent of those firms signing up are new customers.

SAP said it had 1,580 customers for its SuccessFactors Employee Central at the end of the fourth quarter, adding clients including Mercedes-AMG and Valentino. It also said Brooks Brothers signed up for its customer engagement and commerce system in the quarter.

According to the company, cloud subscriptions and support revenue in the SAP Business Network segment were up 19 percent at constant currencies in the full year 2016, while 2.5 million connected companies have traded over $885bn of commerce on the SAP Ariba network in the past 12 months, growing its commerce volume close to 20 percent, year over year.

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SAP's results highlights.

Image: SAP

Looking at the overall results, the company said in 2016 cloud and software revenue grew by seven percent, and cloud subscriptions and support revenue stood at €2.99bn.

New cloud bookings, which SAP points to as its key measure cloud sales success, increased 31 percent in the full year to €1.15bn. Its cloud subscriptions and support backlog, consisting of expected future cloud subscriptions and support revenue, reached €5.4bn at year-end. Operating profit for 2016 was €5.12bn.

SAP said its expanding cloud business plus growth in support revenue is increasing the share of "more predictable" revenue: cloud subscriptions and support revenue along with software support revenue accounted for 61 percent of SAP's total revenue for the full year 2016, up two percentage points.

For the fourth quarter, cloud and software revenue grew seven percent, and cloud subscriptions and support revenue grew 31 percent year over year to €827m. New cloud bookings were up 40 percent in the fourth quarter and reached €483m.

For its 2017 financial year, SAP said cloud subscriptions and support revenue are in a range between €3.8bn and €4bn, and cloud and software revenue to increase by six to eight percent.

SAP said it was raising its 2020 targets "to reflect the company's consistent fast growth in the cloud", aiming for between €8bn and €8.5bn in cloud subscriptions and support revenue. The previous target was between €7.5bn and €8bn.

Its target for total revenue is between €28bn and €29bn, against the previous figures of €26bn to €28bn. It said the share of revenue coming from cloud subscriptions and support revenue and software support revenue would reach between 70 and 75 percent in 2020.

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