SAP defers profit goal to build cloud business
January 21, 2014
Grazed from WHTC. Author: Harro Ten Wolde.
German business software maker SAP pushed back its profit target as it waits for subscription revenue from cloud-computing to gather pace and invests more in the business to keep up with a fast-growing market. SAP said on Tuesday it now aimed to hit its operating margin goal of 35 percent in 2017 instead of 2015. The margin was 32.6 percent last year.
The Walldorf, southern-Germany based company and global rivals such as IBM and Oracle are racing to meet surging demand for web-based software products. Known as cloud computing, this allows businesses to reduce their costs by ditching bulky servers for network-based software in their own offices and using remote data centres run by technology companies instead…
The global cloud services market last year grew by almost a fifth to an estimated $131 billion, according to research firm Gartner. IBM Markets Intelligence estimates the market could be as big as $200 billion by 2020…
Read more from the source @ http://whtc.com/news/articles/2014/jan/21/sap-says-move-to-cloud-delays-profitability-goal/