Covid-19: SAP bends but does not break, thanks to the cloud

SAP cloud revenues jumped in the 1st quarter, software license revenues fell. The global health crisis is amplifying the trend.

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In the midst of a Covid-19 coronavirus pandemic, can SAP reassure its ecosystem?

In any case, this is the year the company engaged in a publication regarding its preliminary results for the first quarter.

The German group said on Wednesday that after two dynamic months “the impact of the Covid-19 crisis rapidly intensified towards the end of the quarter, a significant number of new cases were reported. This is reflected, in particular, in the significant year-over-year decline in software license revenues. ”

These would have dropped by 31% to € 0.45 billion in the first quarter ended March 31, 2020.

Cloud all!
Nevertheless, compared to the same period last year, the group’s turnover is expected to increase by 7% to 6.52 billion euros (IFRS standards).

The success of the cloud explains the trend. Revenue from the cloud has increased 29% to 2.01 billion euros (IFRS).

“SAP reacted quickly to the new environment by adopting a virtual sales and remote deployment strategy. To protect profitability, SAP is slowing down recruitments and reducing discretionary spending in addition to “natural” savings, such as fewer trips and more virtualized events, “said the firm.

For 2020 as a whole, the publisher of the SAP S / 4HANA integrated management suite maintains “its long-term strategy and prospects and continues to invest in innovation. The group co-led by Jennifer Morgan and Christian Klein even plans to “emerge from the Covid-19 crisis in an even stronger competitive position than before.”

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