SAP Plans To Build With SuccessFactors

German software giant SAP plans to use its recent SuccessFactors acquisition to perform the envirable task of making the cloud profitable, the European head of the company told TechWeekEurope.

SAP may have just published the best results in its 40 year history, but Franck Cohen, president of SAP for EMEA, says the comapny doesn’t plan to stand still. And, as for most other IT industry giants, the cloud is the main focus.

SAP’s acquisition of SuccessFactors, announced in December, gives it the industry’s largest cloud software solution in the world, with over 50 million users, claimed Cohen. SAP sees enormous potential in SuccessFactors and Cohen wants to see it integrated with the rest of SAP’s cloud offerings,

Innovation Strategy

SuccessFactors will make SAP’s cloud activity profitable, said Cohen, adding that this task is one its rivals have found difficult so far.

However, profits aren’t hard to find in SAP. The giant made record revenues in 2011, with software revenues increasing 22 percent to €3.97 billion (£3.03bn). SAP reported non-IFRS operating profit of €4.71 billion (£3.91bn), and a record operating cash flow of €3.78 billion (£3.14bn), an increase of 29 percent.

Cohen said that results were good across all regions, with emerging markets, the Americas and its homeland in Europe all contributing to its record-breaking year. He added that encouraging results from so many areas and markets meant that SAP had scored a “slam dunk”.

Cohen attributed the success to a “strategy of innovation”, a claim which might have rung hollowly as recently as two years ago, when the company was roundly criticised by its UK user group for a lack of new products and innovations.

Since then, the company seems to have come to life somewhat, and Cohen was able to piont to improvements in areas such as mobility serving as evidence that SAP’s customers were “adopting its unwired strategy”.

Innovations contributed €270 million (£224m) to revenues, said Cohen, adding that HANA (High-Performance Analytic Appliance), the firm’s in-memory database was making a very impressive contribution given that it had only been released for six months and was SAP’s most successful launch ever.

Room for growth

As for growth prospects in 2012, Cohen admitted that the company was not immune from the current economic climate, but it was on course to exceed its revenue targets by 2015 and was looking to secure a larger market share at the expense of its rivals. He said that customers expected SAP not only to increase their productivity, but also change the way that they do business, while at the same time reducing costs.

SuccessFactors, meanwhile, may be a very important acquisition, but is unlikely to produce truly profitable clouds until the takeover had completed. It is unlikely to impact SAP’s 2012 figures, but would assist it in reaching its long-term goals.