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In today’s Cloud Wars Minute, I discuss SAP’s impressive Q2 performance, covering its significant growth in cloud ERP and overall cloud revenue.
Highlights
00:28 — SAP’s Q2 numbers came out earlier this week. I think we could call this an SAP Q2 boom. Cloud ERP Suite revenue, up 33%; overall cloud revenue, up 25%; current cloud backlog, up 28%. This is against a backdrop where some other big enterprise application vendors are saying they’re seeing a significant slowdown.
01:17 —So as it’s getting bigger, its growth rate is accelerating: $3.72 billion for Cloud ERP Suite, putting it on a $15 billion annualized run rate; current cloud backlog of 28%, now reaching more than $16 billion.
02:09 — CEO Christian Klein said its Business AI services have been at the center of a lot of this growth. The RISE and GROW programs help customers optimize; also, 20,000 on-prem SAP customers are beginning more and more to cut over to the cloud, all of which is feeding into these big numbers.
03:02 — There are number of factors that are playing into this. The Cloud ERP Suite. But it’s not the old suite: this is modular, works together. The Business Technology Platform that harmonizes all those applications. What’s happening with its partners ecosystem is important and innovative. The Datasphere business data fabric architecture is pulling all customers’ data together.
Ask Cloud Wars AI Agent about this analysis
04:15 — Now, I want to offer a brief history lesson here. It was not that long ago, four years ago, that many so-called experts were screaming for Christian Klein’s head. He had just taken over as the CEO of SAP, and on his first earnings call, the real breakout of COVID-19 hit. Again, some of these supposed know-it-alls were calling for Klein’s head. I think, quite contrary to those silly ideas, he has done a fantastic job.
05:09— It’s by far the fastest-growing cloud applications provider. So hats off to SAP for a terrific Q2. We’ll have some more thoughts on this and what it means for the market overall coming up later this week, along with a detailed article today.
