SAP financial results for Q2 2015 reveal a steady increase in cloud subscription but profits taking a hit.
The software maker posted an operating profit of €701million up 1% from the previous year (€698million), however its profit after tax has dropped 16% to €469 million from €556 million in Q2 2014.
Darren Roos, GM Northern EMEA, told CBR, "UK cloud business grew 149% and overall in the region in cloud we’re up 129%. We doubled our number of HANA customers. Pleased with the speed of progress as no one has beaten this path before."
In the two biggest northern European markets (SAP positions its home market of Germany elsewhere) France the UK said what was unpredicted but welcome was that many firms were taking the latest on premise SAP offerings before taking the step to the cloud.
All businesses, be they in financial services or retail are facing massive disruption and being forced to deal with non traditional competitors, he said.
"We have made a fundamental shift on the way we approach our customers. In the last few years we’ve adopted a practice of design thinking. We break out a completely different level of capability which 100% focused on customers to find solutions to their problems and this is not just about the [customer’s business] processes."
The company’s cloud subscriptions and support grew 129% up from €241 million in Q2 2014 to €552 million in Q2 of this year.
The cloud strategy from the company is boosted by its strong software licenses and support results which had revenue of €3.51 billion, making for combined revenue of €4.97 billion, an increase of 20% from the same quarter in 2014.
Franck Cohen, EMEA president at SAP, told CBR, "The region is doing better than average in on premise and doing better than average in cloud. Overall I’m quite pleased and the outlook is positive for the rest of the year."
Triple digit growth in cloud was very pleasing but Cohen said the Russia market is suffering by comparison.
SAP splits EMEA into North, South and Central&East and Cohen said his role had been expanded to include Germany, SAP’s home market.
The company also said SAP HANA customers have risen, reaching 7,200 up from 3,600 at the same time last year.
For the first six months of the 2015 the company’s operating profit dropped 6% to €1.3 billion down from €1.4 billion for the first six months of 2014. Profit after tax with down 19% to €882 million in 2015 from €1.09 billion in 2014.