SAP AG (NYSE:SAP) has reported yet another record quarter as it announced its Q3 results on 24 October. The company reported its eleventh consecutive double digit revenue growth as revenues grew 16% y-o-y to $5.080 billion (€ 3.952 billion). As expected, the cloud business, SAP HANA and mobile division outperformed, showing triple digit revenue growth. The Software and Software-Related Service units revenue increased 19% y-o-y to $4.13 billion (€3.21 Billion) contributing to Q3 non-IFRS operating profit increased 10% y-o-y to $1.6 billion (€1.24 billion).
The company had a strong performance in the Americas and solid double digit growth in Asia Pacific and Japan. SAP HANA revenue was $106 million (€83 million) as it tries to hit the guided target of at least $410 million (€320 million). Mobile revenue was $62 million (€48 million) which keeps SAP on track to meet its full year target of $280 million €220 million. As SAP tried to catch up to Salesforce.com, it is showing promise in the cloud business. It reported that cloud momentum continued in Q3 and 12 months new and up-sell subscription billings increased fourteen-fold. 
Outlook For 2012 Refined To Include Ariba And SuccessFactors
The company has refined the outlook for non-IFRS software and software-related service revenue to include Ariba’s expected revenue and profit contribution from the acquisition date of October 1, 2012 to year end. It now expects full-year 2012 non-IFRS software and software-related service revenue to increase in a range of 10.5% – 12.5% from the 2011 level of €11.35 billion ($14.6 billion). SuccessFactors and Ariba are likely to contribute to 2.5% of total earnings this year. SAP expects full-year 2012 non-IFRS operating profit to be in a range of €5.05 billion – €5.25 billion ($6.5 to $6.75 billion).
Big Data Driving SAP Growth
Big Data is the largest growth opportunity for SAP and it is targeting revenue from HANA to be at least Euro 320 million ($422 million) for 2012 and has already outperformed the worldwide relational database market growth rate of 15.1 percent by growing 44 percent from 2010 to 2011. SAP Sybase ASE, SAP Sybase IQ, SAP Sybase SQL Anywhere and SAP HANA revenue led to the growth mainly driven by the addition of SAP HANA into its database product portfolio.
The SAP HANA platform and solutions from Sybase help organizations unlock the business value of ‘Big Data’ by enabling them to access and deliver information faster than before with real-time insights. It also claims the HANA platform can deliver information up-to 1,000,000 times faster than before due to its in-memory computing. 
Cloud Based Management Apps Becoming Popular
To strengthen its cloud based product portfolio and compete with the likes of Salesforce.com, SAP is now set to unveil a line of cloud-based EPM (enterprise performance management) applications that run on top of the HANA platform. The pricing for apps will be on a subscription basis and will depend on the complexity of the management app and the customer’s size.  The cloud based management apps such as EPM OnDemand, include capabilities to investigate and fix errors related to expenses, and it allows for real-time analysis of P&L and capital project planning. The company expects to release more products in the future with a design focus on smartphones and tablets. EPM Unwired, is one such app, and is a mobile client that will serve as a launch pad for all of SAP’s EPM software. The focus on mobility is to cater to the sales force, which is always on the move and for professionals such as retail managers who spend a lot of time away from their desks and need mobile access.
We currently have a $74 Trefis Price Estimate.Notes: