SAP’s EMEA president, Franck Cohen, has said that the halted investment by governments across Europe is to blame for the company’s poor performance in the region during this quarter.
He also specifically pointed to a major central government deal in the UK that was delayed and won’t feature until the Q4 results.
SAP yesterday reported that revenues in Europe, the Middle East and Africa (EMEA) were down 1 percent year on year to £300 million. This compares to an increase of 37 percent in the Americas and 18 percent in Japan.
“We had a flattish kind of performance in Europe this quarter. We have been suffering a lot in Spain, Portugal, Italy and Greece,” Cohen told Computerworld UK.
“SAP has a high dependency on the public sector in Southern Europe. For example, every single municipality in Spain is using SAP. But because of the public deficit there, Spain has basically stopped investing. It has a severe impact on our performance.”
He added: “I would say it has also had an impact in the UK. We have had some delays in public sector transactions in Q3. Delays in the decision process due to the same situation in Spain.
“There was a contract we were expecting to close in this period with a central government department, but it was delayed.”
SAP also reported strong growth in its cloud business, where 12 months new and upsell subscription billings increased fourteenfold. Even when including SuccessFactors in SAP’s 2011 numbers, the growth is 116 percent.
Dramatic growth rates are easy when you start from a low base, but Cohen detailed direct customer numbers, to Computerworld UK. “The cloud business is going very well, even though we had a modest starting point in Europe because SuccessFactors was much more of a presence in US,” he said. “However, we signed over 50 new cloud contracts with businesses in Europe this quarter.”
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