In the second quarter of 2024, SAP reported cloud revenue of €4.2bn, marking a 25% increase. This growth was primarily driven by a 33% increase in revenue from the Cloud ERP Suite. The shift to cloud services resulted in a 27% decrease in software license revenue compared to the same period last year.
During an earnings call, SAP CEO Christian Klein noted that revenue from the Cloud ERP Suite had grown to €3.4bn. Klein highlighted the success of the company’s Grow software, designed for small businesses and subsidiaries. He mentioned that 60% of customers in Q2 were new, with nearly 1,500 customers onboarded, many of whom initially started with S/4 public cloud finance and expanded to other SAP ERP solutions.
Klein emphasized the effectiveness of the company’s “grow formula” and its strategy of transitioning customers to Rise, Grow, and BTP solutions first before expanding with line of business solutions and AI integration. He highlighted the role of AI in closing deals, with premium AI use cases contributing to almost 20% of all deals in the second quarter.
Discussing SAP’s cloud renewal rate, Klein stressed that once customers move their critical systems to the cloud, the business becomes more entrenched. He also mentioned the successful adoption of AI-enabled technologies like Joule in various business functions, improving efficiency and user experience.