Cloud growth continues to drive SAP sales but has not yet completely offset the decline in traditional on-premise license revenue. This was among the key story lines from this past week’s Q2 Earnings Call with SAP executives.
SAP’s announcement was full of updates on key solutions such as SAP S/4HANA and its overall cloud portfolio. SAP’s cloud backlog increased 20% year over year to 7.8 billion euros. General Software-as-a-Service (SaaS) revenue jumped 25% year over year, excluding intelligent spend. This growth was not enough to offset SAP’s traditional on-premise software business, as overall software license and support revenue declined 5% for the quarter.
The newly released RISE with SAP offering is starting to become a key driver for both SAP S/4HANA and overall cloud sales, reported SAP executives. SAP S/4HANA has also reached a new customer milestone and an annual run rate exceeding one billion euros.
There are several implications for business and IT leaders that run SAP particularly as they look to adopt new cloud and SAP add-on solutions. Watch these critical guideposts from this announcement as you evolve your SAP strategy and investments in the coming year.