Executive Briefings

SAP Takes on More Cloud Customers As It Seeks Smaller Deals

SAP SE raised its targets for 2020 as customers bought its latest suite of applications at a faster pace, and Chief Executive Officer Bill McDermott - a fan of Donald Trump's "The Art of the Deal," - said he wouldn't "lay off the accelerator" on acquisitions, engineering investment or a potential share buyback.

The updated outlook, on top of fourth-quarter sales that were in line with estimates, show how SAP, which supplies software for running factories, supply chains and financial accounts, is managing a transition from software installed on customers' computers to online cloud-computing tools.

SAP's on-site software license business is barely growing, but its overall growth is still outpacing that of competitors Oracle Corp. and a key software division at IBM Corp. Now the company is looking to deploy more of its €3.7bn ($4bn) in cash to fuel more growth.

SAP could buy software companies whose capabilities cut across industries, or in specific areas like networking factories and industrial equipment, the CEO said.

McDermott is moving SAP’s tens of thousands of businesses that run the company’s older software onto a new set of applications called S/4 Hana. SAP said it now has 5,400 businesses running the new suite, up from 4,100 at the end of October.

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The updated outlook, on top of fourth-quarter sales that were in line with estimates, show how SAP, which supplies software for running factories, supply chains and financial accounts, is managing a transition from software installed on customers' computers to online cloud-computing tools.

SAP's on-site software license business is barely growing, but its overall growth is still outpacing that of competitors Oracle Corp. and a key software division at IBM Corp. Now the company is looking to deploy more of its €3.7bn ($4bn) in cash to fuel more growth.

SAP could buy software companies whose capabilities cut across industries, or in specific areas like networking factories and industrial equipment, the CEO said.

McDermott is moving SAP’s tens of thousands of businesses that run the company’s older software onto a new set of applications called S/4 Hana. SAP said it now has 5,400 businesses running the new suite, up from 4,100 at the end of October.

Read Full Article