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SAP Marks Another 'Best Year Ever' with HANA, Cloud Growth

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Posted January 24, 2013 By Sean Michael Kerner     Feedback

Buoyed by adoption of HANA, SAP Co-CEO William McDermott calls 2012 the company's best year ever.

While SAP's past is strongly rooted in on-premises software, its future likely rests in the cloud. That became clear when SAP reported its fourth-quarter fiscal 2012 and full-year results yesterday, highlighting a number of key trends including the cloud.

SAPs 2012 revenue came in at $16 billion for a 14 percent year-over-year growth rate.

"I know many people were curious as to what SAP would do after its best year ever in 2011," said William R. McDermott, co-chief executive officer at SAP, during his company's earnings call. "Well, we came roaring back in 2012 and essentially bested our best. It was, in fact, the best year in the 40-year history of SAP, and we're pretty proud of that."

McDermott stressed that SAP's 2012 growth is outperforming the marketplace. He noted that SAP's software and software-related service growth rate of 13 percent is four times greater than Gartner's research estimates for overall software market growth. In particular, SAP is optimistic about growth opportunities in the cloud.

"Let me be clear," McDermott said. "There is a new way to look at software revenue now as customers will more and more consume from the cloud."

SAP's co-CEO also used the earnings call as an opportunity to take aim at archrival Oracle. McDermott noted that SAP's software business is growing more than twice as fast as Oracle's software business.

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"So let there be no doubt that we're growing much faster than Oracle," he said. "We understand that the consumer will adopt things in the cloud for ease of consumption and we're raring and ready to go."

The software giants rarely pass up an opportunity to trade barbs. Last year Oracle CEO Larry Ellison touted his company's decision to offer cloud applications and implied SAP was slow to do so.

HANA Uptake

While the cloud is an area of growth for SAP, it is presenting HANA as perhaps its biggest success story. "In the first 18 years of SAP, we reached euro 400 million (U.S. $535 million) in revenue," McDermott said. "We reached that in 18 months with SAP HANA."

SAP's other co-CEO, Jim Hagemann Snabe, echoed McDermott's enthusiasm about HANA. "I think the most transformative innovation the last 20 years is SAP HANA, redefining a mature database market into something that is real real-time," he said.

Vishal Sikka, SAP's chief technology officer, noted that to date SAP has implemented more than 500 HANA projects.

"In addition to that, we have close to 300 live implementations of HANA One, which is the HANA installation running on the cloud, on Amazon's cloud or other clouds," Sikka said. "We have more than 17,000 hours of development systems of HANA that have already been turned on. So we are seeing tremendous adoption of HANA, not only in the sales but also in the go-lives."

Sean Michael Kerner is a senior editor at InternetNews.com, the news service of the IT Business Edge Network. Follow him on Twitter @TechJournalist.

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