CEO of SAP AG Says Cloud Computing Business Profitable
April 21, 2013
Grazed from InsiderMonkey. Author: Editorial Staff.
The co-CEO of business software maker SAP AG says its push into cloud computing is starting to make money — and he predicted it would reach profits that rival or exceed those of its traditional business.
The cloud business contributed about 28 million euros ($36.72 million) to first-quarter earnings. SAP AG (ADR) (NYSE:SAP), whose software helps companies manage personnel, sales and customer relations, said Friday its overall net profit rose 17 percent to 520 million euros in the quarter. Revenues grew 7 percent to 3.6 billion euros…
"We accelerated into the cloud in a big way about a year ago and already we’re making money on it," Bill McDermott told The Associated Press. In cloud computing, customers pay SAP a subscription fee to use software on SAP AG (ADR) (NYSE:SAP)’s servers rather than installed at the customers’ businesses. The approach is a shift from the company’s long-standing model of selling software and then profiting both from that and the follow-up services revenue from support and training…
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