ASUG Briefing: 6 Customer Takeaways from SAP’s Q3 2015 Results
What You Need to Know
- SAP execs revealed that about 25 percent of 1,300+ customers who have licensed S/4HANA have ongoing projects to go live
- CEO Bill McDermott recommitted to relationship with Amazon and said there is no “trash talk” between the two companies
- SAP is rolling out S/4 Logistics in November and continuing its S/4HANA licensing promotion until Dec. 31, 2015
1. What Q3 Proves, According to SAP
SAP unveiled its third quarter 2015 earnings report, and top executives covered a wide range of topics of interest to ASUG members during a bullish conference call discussing the results. The executives were keen to point to cloud revenue gains as proof positive that customers are embracing the company’s public and private cloud technologies with the caveat that SAP has more work to do in customer education.
“In Q3, we clearly see results of the strategy we have implemented over the last five years. We have a fast-growing cloud business and at the same time a solid performance in the core. Our overall cloud and software growth is strong and clearly ahead of our largest competitor.”
-SAP CFO Luka Mucic
2. S/4HANA: More Than a Promo Effect
1,300+—total number of customers who have licensed the S/4HANA business suite, after eight months on the market, up from the 900+ figure previously cited by SAP.
25 percent—A rough estimate of how many of those 1,300+ customers have ongoing S/4HANA projects to go live.
November 2015—When the full Logistics piece of S/4HANA will become available, enabling SAP to have all of its 25 industry sectors housed in an S/4HANA world.
“When companies decide on their digital strategy, they’re not buying promos, they’re buying business outcomes.”
-Rob Enslin, president of global customer operations, responding to a question about S/4HANA deals and noting a promotional deal SAP has offered since February will now be extended through Dec. 31, 2015
3. More Customer Education Needed—Stat
“One of the biggest things we have to do as a company, frankly, is make sure we not only educate our own workforce across all functions, but also our customers. … Every CEO I meet, everyone I talk to, the comment is always the same, ‘I didn’t know you guys do all that.’ And I said, ‘Well that’s why we’re traveling and meeting you, so you know.’ What we can do is quite amazing and it’s a matter of getting the word out there.”
-CEO Bill McDermott on what’s on SAP’s to-do list while also stressing that the company’s revenue and pipeline growth are evidence of its success with customers
4. Competitors as Partners
McDermott had an interesting response to an analyst question about SAP’s reaction to recent comments by the CIO of General Electric about his plans to move 60 percent of GE’s workload to Amazon Web Services (AWS) during the next three years. And don’t forget SAP’s rush to market with Cloud for Analytics was driven by Amazon’s analytics launch. Said McDermott:
“AWS is a unique company and a unique partner and you haven’t seen any trash-talk in-between Amazon or AWS and SAP because we think that if the customer wants to run on that highly efficient infrastructure and they want to take our high profile innovation and combine those two things, they should be able to do that. So we’ve been very vigilant around working closely with Microsoft, with IBM, with HP, with Amazon to make sure that they are certified on the highest possible standards of performance and security of our technology so the customer gets the ultimate best benefit possible which is best software in the world at the best possible value and they should be able to run it where they want to run it.”
5. Choice Is a Very Good Thing
At the same time, McDermott positioned competitors’ offerings as a way for SAP to continue improving its own technologies since:
“We don’t think clouds are created equal. … Let’s let the customer choose, give them choice and make sure that our software is going into everyone’s cloud.”
6. Bill’s Back in the Air
And, in case you were wondering, the SAP CEO is fully recovered from a recent serious eye accident and is fully back at work, baby!
“I’m 100 percent back in action up to and including [being] in the air again,” McDermott said. “I feel very comfortable at 35,000 feet.”