SAP HANA remains the biggest growth engine for SAP with revenues tripling in the last quarter to €86 million (~$112 million). It has over 1,000 customers on it now and its popularity is growing fast. HANA’s relevance as a real-time analytics platform for big data and warehouses has been driving its popularity. For 2013, the company estimates that software revenue from SAP HANA will range between €650 million to €700 million. Its expectations are supported by the completion of the transition of the entire SAP ERP (Enterprise Resource Planning) suite onto the HANA platform in January. This has put it in direct competition with Salesforce.com, which is the leader in cloud-based CRM. We expect SAP to successfully cross-sell HANA and other software in its suite of products over the year and expect SAP HANA to define the company’s 2013 performance.
In addition, SAP’s performance in the last couple of quarters has also been helped by its strong focus on cloud services. The company strengthened its presence in the cloud market by acquiring two leading cloud providers – SuccessFactors and Ariba. The company has over 6,000 customers and more than 20 million users in the cloud. SAP aims to have a €2 billion cloud business in the long run.
The continuing adoption of mobile devices as Internet touch points will also continue to drive the growth for SAP. Currently, 15 billion of the world’s mobile devices are connected to the Internet. With trends like “bring your own device” gaining strength, we expect SAP’s mobile offerings will continue to gain traction as companies try and connect their employees with with real-time information.
The Americas To Lead Growth
In contrast to most companies that are seeing high growth in developing markets compared to developed markets, we expect SAP to post higher revenue growth in the developed markets including the U.S. Despite the delayed budgetary cycles in the U.S.due to the federal budget uncertainty, strong growth from cloud subscriptions and support services should lend support.
We expect an improving economy to speed up this growth going forward. Other established markets such as U.K., Sweden and Switzerland are also expected to grow at double digit rate. Asia-Pacific and Japan region, however, may continue to weigh. External factors such as lower-than-expected demand for IT investments from state-owned enterprises in China have hurt the company in Q1. We have yet to see if the stability provided by the new government will help it return to solid growth going forward.