Continuing to dramatically outperform all other applications providers, SAP reported Q4 Cloud ERP Suite revenue was up a whopping 35% to $4.1 billion while total cloud backlog spiked 43% to $65.8 billion.
SAP’s overall Q4 cloud revenue was up a very strong 27% to $4.9 billion, with CEO Christian Klein noting that 50% of new contracts included AI services and technologies.
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In a moment, I’ll share SAP’s key Q4 and full-year numbers, but before doing so I want to focus on three numbers that, in my opinion, provide the strongest possible evidence for my contention that SAP is not just growing more rapidly than any other major enterprise-apps provider, but is also building an enormous pipeline for continued robust growth well into the future. Let’s take a look at those two figures:
1. Cloud ERP Suite growth for Q4 (35%) and full year (33%)
After SAP, the second fastest-growing apps vendor is Microsoft with Dynamics 365, which has been in the range of 22%, meaning that customer demand for SAP’s enterprise apps has been so strong that it is outpacing its nearest rival by more than 50%. Workday’s at about 17%, Oracle at 10%, and Salesforce 8%. By any measure, that’s a blowout.
2. Total cloud backlog up 43% to $65.8 billion
That backlog number represents contracted business that’s not yet been recognized as revenue, and it clearly shows that SAP’s growth surge will extend throughout 2025 and into 2026. And those two numbers that SAP reported are remarkable: 43% growth on a rapidly rising base, and total backlog of almost $66 billion. This is a big market, and there’s lots of room for everybody, but those numbers show that customers are turning more and more to SAP.
3. Cloud revenue now accounts for 50% of SAP’s total revenue
Total revenue for 2024 was about $35.6 billion, while cloud revenue for the year was $17.8 billion. Yes, this milestone has been something of a given for some time, but this achievement should dispel any delusions about SAP’s extreme transformation from on-prem to the cloud.
A few other key numbers:
- Current cloud backlog up 32% to $18.8 billion;
- Full-year cloud revenue up 25% to $17.8 billion;
- Full-year Cloud ERP Suite up 33% to $14.7 billion;
- Projected cloud-revenue range for 2025: up 26%to 28% or $22.5 billion to $22.8 billion.
Final Thought
With the rise of agents and other AI breakthroughs, the enterprise-apps space is undergoing enormous change. I’ll be following up on these top-line analyses over the next few days about where SAP is headed in the very exciting year to come.
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