SAP financial results benefit from cloud computing

The 2015 Q2 results for SAP have been published and show that cloud computing is one of its areas of growth.

Overall profits for the business software producer were disappointing, however, despite the growth in its cloud services. For the second quarter of 2015 the report shows that cloud subscriptions reached €552m (£386m), which is more than 100% up on the previous year. There was just a 13% change for other software support and licences, however, and despite a total revenue of €4.97bn, the operating profit was up just 1% to €701m. After tax there was a year-on-year drop in profit of 16%.

Despite this disappointment, the company is expecting this year to see an overall growth for the cloud and other software, with an operating profit of up to €5.9bn. SAP is currently migrating software over to the cloud, and others are doing the same; however, there is evidence that SAP and rivals Oracle and IBM are suffering at the moment.

It is widely considered that SAP has the right modus operandi, even though things are not progressing as expected. At the start of 2015 the company altered its long-term vision and is expecting an operating profit of up to €7bn in 2017, down from its previous prediction of €7.7bn.

One of the problems SAP and its rivals are facing is the CCL (Campaign for Clear Licensing), which is campaigning against obfuscatory software practices. The CEO of SAP, Bill McDermott, said the company has “the most complete vision” for its transition plans.