SAP Tips Hand On Cloud Plans As Profits Soar - InformationWeek

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4/28/2010
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SAP Tips Hand On Cloud Plans As Profits Soar

First-quarter financial results beat expectations; co-CEO McDermott hints at new cloud partnerships and on-demand offerings.

SAP Wednesday announced strong preliminary financial results for the first quarter of 2010, highlighted by a 12% increase in top-line revenue and a near doubling of profits. In an exclusive interview with InformationWeek, co-CEO Bill McDermott also fleshed out sparse public comments made today on SAP's plans for innovation and leadership in a market that is witnessing radical change.

The strong financial results reported Wednesday come as relief to a company beset by anemic sales and financial results in 2009. The poor performance ultimately led to the dismissal of Leo Apotheker as CEO, the departure of Executive Board Member John Schwarz and the appointment of Bill McDermott and Jim Snabe as co-CEOs.

The new co-CEOs split duties on Wednesday's conference call, with Jim Snabe commenting on SAP's product strategy and plans for innovation. Snabe stuck to a familiar script, pointing to efforts to expand SAP's primacy in on-premise enterprise applications, to enter into the software-as-a-service (SaaS) market with the delayed Business ByDesign suite, and to deliver mobile access to enterprise applications.

The freshest news on these three technology fronts is on SAP's mobile strategy, which got a significant lift in March with the release of CRM and mobile workflow applications built in partnership with Sybase on its Sybase Unwired Platform. If the partnership lives up to its billing, it will help SAP beat rivals including Oracle and Salesforce.com in quickly delivering deep, interactive access to applications with native-device support across platforms including RIM Blackberry, Apple iPhone, Nokia and Google Android.

Addressing SAP's SaaS and on-demand developments, Snabe offered the months-old mantra that a revamped Business ByDesign SaaS suite will be ready by mid 2010, though he noted, "it's not just a me-too, but a next-generation, on-demand platform. We believe that there is an opportunity to disrupt the market based on this platform."

Whether it's Tuesday's announcement that VMWare and Salesforce.com have partnered to support virtualized application development or Microsoft's growing embrace of cloud-delivered applications, there are signs everywhere that the industry and, more importantly, customers are embracing new application delivery modes. Yet Snabe said nothing about cloud computing, virtualization or growing interest in these developments among large enterprises.

But if Snabe's references to SaaS and on-demand seemed somewhat dated, McDermott made it much clearer, in an exclusive interview with InformationWeek Wednesday, that SAP is paying attention to larger shifts.

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