SAP CFO pours cold water on hopes of Virtual Cloudsfit

Miya Knights News
26 Apr, 2012

Finance chief interview says no profit is likely from the software maker’s cloud business before 2013

SAP is not expecting its cloud-computing based business to yield a profit for some time, it emerged in an interview with one of its key senior executives today.

Werner Brandt, SAP chief financial officer (CFO), told German media outlet Die Welt the cloud business “will not be profitable this year”.

Brandt went so far as to add: “It is too early to say whether we can do that as soon as 2013.”

This is despite the firm’s $3.4-billion acquisition of cloud-based human capital management (HCM) software company SuccessFactors late last year.

While initial reactions to roadmap plans outlined by SAP for its HCM buy in February were favourable, Brandt also pointed out that its integration into the company had only just been completed.

But he reported that the newly acquired business was doing well. “Success Factors reported a rise of almost 70 percent in new business in the first quarter of 2011,” he said.

The interview did not cover SAP’s homegrown cloud offerings, including the recently launched BusinessOne OnDemand.

But, given the bumpy start to SAP’s 2012, where preliminary first-quarter 2012 revenue fell short of expectations, SuccessFactors’ contribution to the results it announced yesterday gave its developing cloud business the boost Brandt indicated that it needed.

SAP reported profit in its first financial quarter of 2012 had jumped 10 percent to €444 million (£362.9m) compared to the same period last year.

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