Asia-Pacific Japan Leading SAP Cloud Growth

SAP APJ leading Cloud growth

In Q1 of 2019, SAP has reported revenue growth of 6.5% year on year, driven by S/4HANA customer adoption and strong cloud growth in the APJ business.

Earlier this year, by SAP CEO Bill McDermott announced that SAP’s value will double by 2023 and China was identified as the fastest growing market. SAP has so far appeared to stay the course, with SAP reporting revenue of $6.8 billion in the first quarter of the year.

S/4HANA acquisitions have reached 10,900 globally, contributing to a 12% rise in Applications, Technology and Services. Customer Experience Management, comprised of fledgling Qualtrics and C/4HANA projects has risen 100% to $340 million. Meanwhile, the SAP Business Network has risen 25%.

The growth in SAP cloud has been strong globally, but is showing particular promise in the APJ region, particularly in China and Japan. While Europe was up 42% and the Americas rose 45%, APJ boasted a healthy 55% rise in revenue.

The much scrutinised SAP restructure and departure of high powered SAP executives has contributed an expected loss. SAP reports a drop circa $150 milion in operating profit in their Q1 statement. Acquisitions, such as Qualtrics, were also a contributing factor.

In the Q1 conference call, CFO Luka Mucic said of Asia-Pacifc Japan business:

“In the APJ region, we had a solid performance too. Cloud and software revenue was up by 16% and cloud revenue increased by 55%, with China and Japan being highlights. For software license revenue, China, Japan, and also South Korea had a strong quarter.”

CEO Bill Mcdermott said of the strong quarter:

“We really couldn’t be prouder of these results. The metrics speak for themselves… we have an incredibly strong core business with a market-leading retention rate in our support business, demonstrating tremendous customer loyalty. We have a high-growth cloud portfolio powered by some of the best M&A in the enterprise software industry. These cloud businesses have years and years of runway for continued growth.”

For more detail on SAP’s first quarter results, visit the SAP Investor Relations page.

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