SAP SE reported fourth-quarter cloud sales that slightly beat analysts’ expectations, as Europe’s biggest technology company won customers with new artificial intelligence (AI) capabilities. The company also named a suite of new executives and said it plans to simplify its strategy.
Cloud revenue in constant currencies rose 27 percent from a year earlier to 4.71 billion euros (US$4.9 billion), the Walldorf, Germany-based company said in a statement yesterday. That compares with an average estimate of 4.68 billion euros by analysts surveyed by Bloomberg.
SAP has promoted AI business services to incentivize clients to shift from legacy on-site servers to information technology infrastructure on the cloud, where average spending per client is higher. Software companies are increasingly focusing on AI agents that can complete tasks without human supervision as demand for the emerging technology grows.
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A new cheap and efficient AI model from China’s DeepSeek (深度求索) that roiled public markets on Monday was welcomed by SAP chief executive officer Christian Klein.
“This is first of all very good news for our AI strategy,” Klein said of the model in an interview on Bloomberg TV. “We said from day one on, we partner first on AI infrastructure and large language models. We believe this is becoming more and more a commodity.”
SAP raised its cloud revenue outlook for this year to 21.6 billion to 21.9 billion euros, up from a previous forecast of more than 21.5 billion euros. SAP’s current cloud backlog, which reflects sales that will be booked over the next twelve months, grew 29 percent in constant currencies to 18.1 billion euros.
Half of SAP’s deals in the fourth quarter had AI embedded, Klein said.
SAP’s strategy helped propel the software firm to become Europe’s most valuable technology company last year, leapfrogging Dutch chip machine maker ASML Holding NV.
The company also announced changes to its executive ranks and board after a number of departures last year that consolidate more control directly under Klein.
Former Boston Consulting Group partner Sebastian Steinhauser, who is SAP’s chief strategy officer, was elevated to the executive board to oversee strategy and operations, SAP said in a separate statement yesterday.
He would be asked to simplify the company’s inner workings and work with new chief marketing officer Ada Agrait to promote a unified strategy to customers, it said.
Philipp Herzig, who has led SAP’s AI efforts, was named chief technology officer. He takes over from Jurgen Muller, who left the company in September last year after what he called “inappropriate” behavior at a company event.
Jan Gilg is to run sales in the US, SAP’s biggest market, and Manos Raptopoulos is to cover Europe, the Middle East and Asia.
Herzig, Gilg and Raptopoulos are to report to Klein. The appointments are effective on Feb. 1.
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