Quarterly figures: Weak euro strengthens SAP’s back – Business Week

The strong dollar and the acquisitions of other software vendors provide SAP in the first quarter tailwind. But the growth has its price: The switch to subscription models, the so-called cloud computing, costs a lot of money.

The strong dollar has fueled the growth of the software company SAP in the first quarter. Although the profit level decreased significantly because investments in new business with subscription models, the so-called cloud business cost. But SAP CEO Bill McDermott promised that the cost would be offset more and more with a stronger sales growth. “We have no interest to declare negative growth, but a good cost management,” McDermott said on Tuesday. On the stock market you believe the SAP CEO: The shares rose for the start of trading on strong

The development of SAP.

• 1972: The Big Bang

  Founded as SAP system analysis and program development in Weinheim; 1976 renamed Systems, Applications and Products in Data Processing; . 1977 moved to Walldorf

• 1973: The launch

  Completion of the first financial accounting software called System RF -. groundwork for the later complete package R / 1 as a comprehensive standard business software

• 1988 Expansion

  The first time in 1979 offered software R / 2 is booming: By the end of SAP sets by 245 million marks. . In October, the company expects for the equivalent of 380 euros per share on the stock exchange

• 1991: The bestseller

  At the CeBIT computer fair SAP is the first time the software R / 3, where the developers worked since 1987. For the middle class designed to R / 3 proves bestseller for corporations

• .

  1998: The Globalization

  To support international expansion and conquest of the US market in August SAP listed on the New York Stock Exchange. Turnover of 4.3 billion euros

• 2007:. The acceleration

  SAP buys for 4.8 billion euros the French software company Business Objects. 2010 following the acquisition of US-based software company Sybase for 4.6 billion euros. The basis for new growth is created

• 2010:. The new beginning

• 2011: The attack

  The Chefduo Snabe and McDermott succeed the best year in the company’s history. The end of 2011 they announce the acquisition of US provider SuccessFactors. . Thus, they switch to new products in the promising mobile and cloud computing business

• 2012: The Go-

  The billion acquisition of US provider Ariba co-chiefs Snabe and McDermott reinforce their new cloud business on. At the same time SAP receives a huge Internet-based procurement network for business customers.

• 2013: Conversion

  In the spring of SAP announces that it will be converted into a European Company SE. . In the workforce arouses fears that the Group could in the medium term headquartered away relocate from Walldorf

• 2014: The autocrat

  At the AGM in May McDermott is the sole SAP CEO. His previous partner Snabe comes to the Supervisory Board. McDermott wants to SAP make leaner and more flexible and trim the company entirely to the cloud.

The strong dollars and the recent acquisitions of travel expenses specialists Concur and staffing agency Field Glass have SAP awarded for the start of the year in the first quarter a major boost. Sales increased by 22 percent to 4.5 billion euros. SAP, thanks to the acquisitions now 32.5 percent of its sales in the United States. All regions but had contributed to the strong growth, McDermott said. Thanks to the acquisitions SAP was also its sales in the new cloud business more than doubled. The downside: The strong structure of the subscription business squeezed the profit. After taxes SAP earned by 413 million euros 23 percent less than the same period last year.

Top 10 software companies by turnover in 2013

• Salesforce.com

  Sales: $ 3.8 billion

  Growth: 33.3 percent (compared to the previous year)

  Source: Gartner, March 2014

• CA Technologies

  Sales: $ 4.2 billion

  growth: -2.6 percent

• VMware

  Sales: $ 4.8 billion

  Growth: 14.1 percent

• HP

  Sales: $ 4.9 billion

  Growth: -2.7 percent

• EMC

  Sales: 5, $ 6,000,000,000

  Growth: 4.9 percent

• Symantec

  “8″

  Sales: $ 6.4 billion

  growth: -0.8 percent

• SAP

  Sales: $ 18.5 billion

  Growth: 9.5 percent

• IBM

  Sales: $ 29.1 billion

  Growth: 1.4 percent

• Oracle

  Sales: 29.6 billion

  Growth: 3.4 percent

• Microsoft

  Sales: $ 65.7 billion

  Growth 6.0 percent

The trend is not new: Already had at the beginning SAP’s medium-term forecast collected due to the renovation until 2017. In terms of sales, the software giant sets a target 21 to 22 billion euros – previously it was assumed that at least 22 billion euros. Also, the profit should be lower than previously envisioned. The software giant is indeed a market leader for programs for corporate management, accounting, logistics processes or human resource management maps. But its traditional software licensing business barely grew in the past, in the first quarter only because of the strong dollar. Therefore, SAP relying more and more on software that is rented, the so-called cloud model.

Since SAP for the conversion to the rental model once takes money in hand, but the sales are spread over a longer period of time than before pressing on the profit. In addition, costs for acquisitions, share-based bonuses for employees as well as for the staff restructuring are underway in the first quarter came, said Chief Financial Officer Luka Mucic. Because jobs are obsolete by the shift to cloud computing, SAP has recently launched a voluntary redundancy program. Thus, three percent or 2,000 of the world’s approximately 74 000 people are moved to change. In the first quarter had been for 50 million euros incurred, said Chief Financial Officer Mucic. It will be seen to be the year 150 to 250 million euros.