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SAP says preliminary Q4 results show strong jump in software revenues

SAP says preliminary Q4 results show strong jump in software revenues

HANA, mobile and cloud software sales help drive growth in all regions

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SAP's revenue from software and software-related services showed ample growth thanks in part to its HANA in-memory database and to strength in its portfolio of cloud applications, the company said today as it reported preliminary numbers for the quarter and year ended December 31.

The company achieved a "breakthrough in the cloud" and "overachieved" on its SAP HANA revenue ambition, co-CEOs Jim Hagemann Snabe and Bill McDermott said.

Software revenue in the fourth quarter rose 9% to €1.94 billion, while software and software-related service revenue stood at €4.23 billion, a 14% jump, as calculated under IFRS (international financial reporting standards). Revenue for the quarter grew 12% year over year to €5.02 billion.

However, IFRS operating profit in the quarter fell 5% to €1.59 billion. SAP attributed the dip to expenses related to acquisitions and share-based compensation. "Share-based compensation expenses significantly increased mainly due to the implementation of new share-based compensation plans and the strong performance of SAP's share price in 2012," it said.

For the full year, non-IFRS revenues grew 14% to more than €16 billion, while operating profits jumped 11% to €5.21 billion, according to SAP.

HANA racked up €390 million in sales for the year, beating SAP's expectations, as did mobile software with revenue of €222 million, according to the company. SAP's annual revenue run rate from cloud offerings is now close to €850 million, SAP said.

The company made a big splash last week with the announcement that HANA can now be used with its flagship Business Suite ERP (enterprise resource planning) software. That move, which had been expected for some time, positions SAP to displace rival databases such as Oracle's from its customers' environments.

SAP had growth in all regions during the fourth quarter. In the Americas, IFRS software and software-related services sales climbed 17% to €1.49 billion.

Fourth-quarter software and software-related services revenue in Europe, the Middle East and Africa grew 10% to €2.02 billion, and jumped 18% to €720 million in Asia-Pacific-Japan. But software and software-related services revenues in Germany dipped 1% to €575 million.

SAP is expected to report its full fourth-quarter and year-end results on January 23.

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  • GeorgeGartner8 Last year SAPwas throwing 492 million into programs to get people to buy Hana using a pricingmemory based pricing model In 2012 SAPalso allocated 155 million in startup funds to subsidies Hana sales I wouldlike to see the breakdown of the 1000 customers in 2012 to see how many were99 cents 1hour 8736 per year revenue amazon aws cloud customers versus amillion dollar sale type customer SAPhas deep pockets and should be able to entice customers with additional dollarsin 2013 on the transformative benefits of Suite on HANA andalso ensuring they will not be disruptive Having customers switch out theirdatabases environments to an non appliance Suse Linux third party hardware and HANAenvironment could be a challenge InAddition there is the implementation service cost of USD 208000 forthe implementation of 5 reports which does not include maintenance or othernegotiated services or fees However HANAis truly disruptive and will continue to cannibalize Oracle IBM andMicrosoft database sales in the near and distance future
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