Cloudy And HANA In-Memory Apps Lift SAP In Q1

April 23, 2013 Timothy Prickett Morgan

German software giant SAP is feeling pretty good about its growth in the first quarter selling software and the fact that it was able to push up profits nearly two and a half times faster than revenue growth in the period that ended in March.

Specifically, SAP said that in the first quarter, its revenues rose by 7 percent to €3.6 billion, with profits after taxes using generally accepted international accounting standards up 17 percent to €520 million. And that was during a time when SAP added nearly 5,200 employees, to a workforce of 64,598.

In the March quarter, SAP sold €657 million in software licenses for its various application and analytics suites, an increase of 3 percent compared to the year-ago quarter. Cloud subscriptions and their support contracts was up by a whopping 373 percent to €137 million. Support contracts for licensed software brought in another €2.9 billion, rising 11 percent.

SAP was quite ebullient about the fact that if you don’t use IFRS accounting standards and measure everything in constant currency instead of translating it back into euros, then its combined software license and cloud app subscription revenues rose by 25 percent in the March quarter, hitting €824 million.

“Our industry is at a fundamental transformation point, driven by the convergence of mobile, cloud and big data. SAP’s 25 percent growth shows that we are not only leading this change but also gaining significant worldwide market share,” said SAP co-CEOs Bill McDermott and Jim Hagemann Snabe in a statement. (Do they both chant the words at the same time, or do they each do every other word?) “Customers continue to choose our innovations to help them run better, and SAP HANA is the next-generation platform for all companies to innovate their business, drive speed across the entire enterprise and reduce costs. SAP’s pipeline is strong, and we are confident that we will achieve our full-year outlook.”

The company said that cloudy app and HANA appliance sales were both stronger than expected in Q1. HANA drove €86 million in sales in the first quarter, which is triple from a year ago, and the company said it could bring in between €650 million and €700 million in HANA-related revenues in 2013.

Sales in the Americas region was better than expected, growth in Europe was subdued but at least trending up, but sales in Asia/Pacific were lower than expected. Like IBM, SAP said the new government coming into power in January slowed things down more than anyone thought it would. Perhaps more significant than anything else, 38 percent of SAP’s sales came from partners, which is getting closer to its goal of having 40 percent of its revenues derived from its channel.