SAP has forecast for this year non-IFRS cloud subscription and support revenue of up to €1 billion at constant currencies. It expects 2014 non-IFRS software and software-related service revenue to increase by 6 to 8 percent at constant currencies from €14 billion in 2013, and non-IFRS operating profit to be in a range of €5.8 billion to €6.0 billion at constant currencies from €5.51 billion last year.
The company still aims to increase its total revenue to at least €20 billion and revenue from its cloud business, including cloud-related professional services, to approximately €2 billion by 2015. It announced the revenue target in 2012, when it said it would exceed €20 billion by 2015.
In 2013, software and cloud subscription revenue was €5.2 billion for the full year, up by 6 percent from the previous year, while support revenue was €8.7 billion, which also increased by 6 percent. Net profit at €3.3 billion increased 18 percent year-on-year. The number of employees was 66,572 FTEs (full time employees), an annual rise of 3 percent.
Cloud software, along with mobility and in-memory computing, was part of a new strategy SAP co-CEOs Jim Hagemann Snabe and Bill McDermott began in 2010, Snabe said during a conference call. "Today, almost exactly four years later, we are celebrating the fourth year of double-digit growth," he said.
Snabe is planning to step down this year, leaving McDermott as SAP's sole CEO and the first American to hold such a position at the company.
SAP has built up its cloud business through major acquisitions of companies such as SuccessFactors and Ariba, versus pure organic growth. Oracle has pursued a similar strategy.
"We have proven it is possible to add a significant cloud business while at the same time growing our core and expanding our margins," Snabe said.
By the "core," Snabe referred to SAP's vast installed base of customers running its Business Suite ERP (enterprise resource planning) software on-premises. While SAP recently launched a HANA-based hosting service for the Suite, it's also hoping to get customers now using Oracle and other rival databases on-premises to switch to HANA.
Some 800 customers have purchased the Suite on HANA option, which was released in May 2013, according to Tuesday's announcement. That's twice as many as SAP expected to have so far, Snabe said. "We are ready to reinvent the installed base."
Ultimately, all of SAP's products will run on HANA, McDermott said on the conference call. "HANA is now a serious brand that we're not having to push as hard as we used to."
SAP also plans to a take a "mobile-first" approach to every application it builds, he added.
Customers can expect a different approach from SAP's sales force this year, according to McDermott.
"We want the sales force leading with the cloud," he said. "I bet that will be a big surprise to the California companies," he added in an apparent reference to Oracle and Salesforce.com. "I can't wait until they get ahold of that one."