Welcome to the Cloud Wars Minute — your daily cloud news and commentary show. Each episode provides insights and perspectives around the “reimagination machine” that is the cloud.
In today’s Cloud Wars Minute, I discuss SAP’s impressive Q4 performance, with strong growth in its Cloud ERP suite and a promising outlook for 2025, positioning the company as a cloud leader.
Highlights
00:24 — SAP released its numbers yesterday for Q4 and the full year. SAP crushed those numbers. The Cloud ERP Suite for Q4 was up 35% to more than $4 billion. This is three straight years, 12 straight quarters, where the Cloud ERP suite has grown at 30% or more and a remarkable achievement on the other side.
01:12 — Longer term, the total cloud backlog for SAP was up 43% to almost $66 billion. So not only is SAP performing well in the short term for Q4 throughout the year, with strong guidance for 2025, but tied up within that guidance, and perhaps beyond that, is this backlog, which is extraordinary.
01:57 — Total cloud revenue for Q4 was up 27% to $4.9 billion. For the full year, it was up 25% to $17.8 billion. So this number right here, $17.8 billion, shows the total of all of SAP’s cloud business, which includes a little bit of platform and a very, very tiny bit of infrastructure that it uses for some private cloud applications.
02:41 — Now, for looking ahead to the full year 2025, SAP said its cloud revenue will grow somewhere between 26% to 28% in 2025, coming out somewhere between $22.5 billion and $22.8 billion for the full year 2025. And no doubt, with the aggressive growth in the cloud that SAP is projecting for 2025, it could be that the cloud revenue in 2025 is more like 55% to 60% of their total revenue.
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03:37 — So any lingering impressions that SAP is an on-prem company with a fast-growing cloud business, those are gone. The other point I want to mention here, it’s that SAP’s performance, and broadly we’ll call it the enterprise application spaces—SAP is growing much, much more rapidly than anybody else.
04:48 — SAP is bullish about the future. It had a great Q4, a great full year. It’s coming into 2025 with a lot of ambition for what’s coming up ahead and a lot of big product evolutions that tie agents in, led by Joule. It will have agents at a high level, orchestrating things, agents running particular tasks. It should be a fun year for SAP and for its customers.
