SAP Reports Strong Cloud, HANA Revenue Growth In Q1

Riding growing sales of its cloud services and HANA in-memory computing platform, software giant SAP reported moderate revenue growth in its fiscal first quarter.

And SAP's channel partners are generating an increasing volume of those sales, CEO Bill McDermott said in a conference call Thursday. "Another way we're driving pervasive adoption of HANA and the cloud is through our vibrant [partner] ecosystem," he said on the call.

SAP now has more than 900 VAR and OEM partners working with its cloud software, McDermott said, and more than 1,200 ISVs -- many of them startups -- building applications on HANA. The CEO touted a new relationship with systems integrator Accenture, with which SAP is developing industry-specific solutions built on HANA and delivered through the cloud.

For the quarter ended March 31, SAP reported revenue of 3.70 billion Euros (US$5.12 billion), up 3 percent from 3.60 billion Euros ((US$4.99 billion) in the first quarter of 2013. After-tax profit was 534 million Euros (US$740.0 million), up 3 percent from 520 million Euros (US$720.7 million) one year earlier.

Software revenue was down 5 percent to 623 million Euros (US$863.3 million). But software and software-related service revenue increased 5 percent to 3.06 billion Euros (US$4.23 billion).

Cloud subscriptions and support revenue grew 60 percent to 219 million Euros (US$303.5 million). McDermott said SAP's cloud subscription revenue grew 38 percent in the quarter and the annual run rate for cloud revenue is approaching 1.1 billion Euros (approximately US$1.5 billion). SAP's customers now have some 36 million users on the company's cloud services.

"We are the only large, enterprise software company that is innovating in the core while transitioning to the cloud -- and doing both profitably," McDermott said.

SAP now has 3,200 customers using HANA, the in-memory, real-time computing platform that is at the core of the company's development efforts. That includes 1,000 businesses and organizations now running SAP's flagship Business Suite applications on HANA. SAP Business Suite powered by SAP HANA was launched one year ago.

PUBLISHED APRIL 17, 2014