SAP’s Cohen on 2014 results: Europe strong north and south

SAP’s Emea president, Franck Cohen, is “reasonably optimistic” about the supplier’s growth prospects across southern and northern Europe. As SAP disclosed its full-year 2014 results, Cohen said the two-speed Europe created by southern Europe's more severe recession has converged.

The UK figures had “high double-digit” growth, and triple-digit in cloud sales, he said. Southern Europe, which had been flat in 2012, had double digit-growth, and triple-digit in cloud sales.

SAP stated that full-year non-IFRS cloud subscriptions and support revenue increased by 45% at actual and constant currencies, reaching €1.1bn. This represents 45% growth in cloud revenue for the year, and 72% in the fourth quarter. It is around 6% of SAP's overall revenue of €17.58bn.

“[But] if you look at bookings, we have more like €3bn in cloud revenue,” he said. “The most important thing is that the cloud business is growing.”

Cohen (pictured) reported triple-digit cloud revenue growth in the UK, which also showed strong overall growth in what he described as the “strategic pockets” of public sector, financial services, retail and telecoms. Those four sectors are growing by 30%, he said.

The supplier’s in-memory database platform Hana brought in triple-digit growth in European sales in 2014. There are 1,500 Hana customers in Europe, said Cohen, with 300 running Business Suite, SAP's ERP system, on Hana. SAP has 5,900 Hana customers worldwide, with 1,850 on Business Suite.

In the fourth quarter, in Emea, 270 deals were made for Business Suite on Hana and 80 for Business Warehouse analytics for Hana, he said, adding that Business Suite on Hana is the “main engine now”, not analytics.

In SAP’s Emea region, the conflict situation in Ukraine, and the consequent impact on the Russian economy as a result of western sanctions, has been a concern over which the company has kept a watching brief. 

“The market is depressed and the rouble has lost almost half its value,” said Cohen. “We did have a tough time, but we have reasonable expectations. It won’t get better any time soon, so we just have to adapt.”

Overall, he said 20% of revenue in Europe came from names new to SAP, “so we are gaining market share”.

“SAP, just a few years back, was a back-office ERP solution,” he said. “Today, we have predictive maintenance, mobile, in-memory computing, cloud, and all these things make us more attractive to net new names.”