SAP Sees NSA Scandal As ‘Opportunity’ To Boost Cloud Presence

Matt Broersma is a long standing tech freelance, who has worked for Ziff-Davis, ZDnet and other leading publications

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Germany’s reputation for data security could boost SAP’s cloud services expansion

SAP is considering “accelerating” its drive into cloud services – and sees the furore over government spying as a possible advantage in gaining new business.

At a Morgen Stanley investor conference in Barcelona on Friday, the company said it is seeing an acceleration in enterprises’ adoption of cloud-based services.

Move to the cloud

“We have a situation now where we see the move to the cloud, particularly in certain markets like North America, happening even faster, and this is a great opportunity for us to revisit whether we should accelerate the move to the cloud,” said SAP co-chief executive Jim Hagemann-Snabe, as reported by Reuters.

SAPHe said such a move could “delay” some revenues, which could affect the company’s 2015 sales target of €20 billion  (£17bn), but he expected the investment would more than pay off by around 2017.

“This would have impact on the 2015 level, I don’t expect enormous impact but it would have some impact because you are delaying some revenues,” Hagemann-Snabe said. “I think it would be the right thing for the company if we had the opportunity.”

SAP generated €547 million (£456m) in cloud subscription and support revenues in the first nine months of 2013, and has a target of €750 million in cloud revenues for this year, climbing to €2 billion by 2015. Gartner expects the worldwide cloud services market to grow by 18.5 percent this year to $131bn (£83bn). To increase its cloud competitiveness SAP spent $7.7bn in 2012 to acquire Ariba and SuccessFactors.

Data security

AP sees the stringent data security laws in its home country as a possible lure for new cloud business. Hagemann-Snabe said this factor is “absolutely” an advantage.

SAP is not the first to see such an advantage: earlier this month, Swisscom said it is looking to pitch its “Swiss Cloud” services to enterprises concerned over the privacy of their data, based on Switzerland’s “long tradition” of data protection.

The data protection issue could be significant in winning new business in Europe as well as in China, with which Germany has been building up its relationship, Hagemann-Snabe said.

“With the investments that Germany, in particular (German Chancellor) Merkel, have done in the relationship (with China), SAP is actually a preferred vendor, so we see an opportunity to use this situation to accelerate our business,” he said.

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