Mr. Klein, why isn't your strategy igniting on the capital market?

Bernd Freytag

Business correspondent Rhein-Neckar-Saar based in Mainz.

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We have raised the forecast three times in the past year and are well ahead of the forecasts.

In the fourth quarter, cloud orders were up 24 percent, again more than we expected.

Customer satisfaction is also steadily increasing.

But we are in the process of transforming our business model.

Investors complain that they are not making enough money.

We are not sloppy on the profitability side, on the contrary.

We're also pulling cloud margin up through 2025.

Clearly, when you transition a business model away from a one-time payment for software to monthly revenue, margin won't increase in the first two years of the transition.

But we've always said that.

From 2023 we expect double-digit growth rates in profit again.

Nothing changed about that.

I am firmly convinced that the market will follow us.

The restructuring can no longer surprise investors, and yet the share price has come under strong pressure again today.

This time the stock market is concerned that you will not generate enough free funds in the future.

We also generated more cash flow in 2021 than forecast, and we expect this to continue to increase in 2023 and beyond.

We will analyze exactly where this disappointment comes from.

The reluctance of investors means that SAP, as the largest software company in Europe, is falling further and further behind American technology groups.

In America there are corporations with a market capitalization in excess of a trillion dollars.

How long can SAP survive in such a race and remain independent?

Take Microsoft.

They, too, have consistently embarked on a path to the cloud.

That's exactly what we do.

I am very confident that this path will pay off.

We have no reason to change our strategy.

Microsoft has a very lucrative cloud business and no legacy customers who still want to install their programs on-premises.

Of course, we give our "on premise" customers who have their software installed on computers on site the assurance that these systems will be serviced until 2040.

SAP is an absolute exception.

We don't leave any customer behind, but we're just as consistent on our way to the cloud.

System landscapes are becoming more and more heterogeneous, and our customers understand that they need to adapt their business model in order to continue being successful in this environment.

This is one of the reasons why our strategy is the right one.

But again, SAP turns 50 this year, the founders and major shareholders will settle their legacy.

You cannot be satisfied with the development.

There is broad approval for our strategy from both the Supervisory Board and our colleagues.

After all, we don't just go to the cloud, we also drive our own innovations: As SAP, we have the largest business network in the world.

We are always building new programs, especially when it comes to organizing supply chains or sustainability.

We are very well positioned.

It is noticeable that recently you have been talking a lot about supply chain solutions and classic corporate management software.

What about your sales software ambitions?

Have you given up the race with Salesforce?

Sales software, or CRM as the industry calls it, has been a big growth driver for SAP in 2021, but we're taking a very focused approach to this business.

In retail, for example, we have a large network.

Returning goods, managing customer data, we win.

But we don't want to offer 25 CRM-specific industry solutions as we do in our core business with corporate management software.

Does that mean you want to keep CRM and expand it further?

Yes, absolutely, but purposefully.

Their solutions run on the mainframes of giant companies like Amazon's AWS or Microsoft's Azure.

Where is the line where these hyperscalers go from partner to competitor?

Microsoft also offers software for corporate management.

Will SAP become the app supplier, and others will take care of the store?


We work with partners where our portfolio is complementary, especially in cloud infrastructure.

SAP does not want to do pure hosting.

Microsoft has had its own CRM solution for controlling operational processes for some time, but we hardly ever see each other on the market in this regard.

The overlap is small.

Nevertheless, if you provide the infrastructure, you can also supply the right programs yourself.

Such CRM programs are products that map highly complex processes.

For our major customers, they have to work around the clock in 180 countries.

Nobody exchanges them that quickly.

Not only are we keeping our existing customer base, the proportion of new customers for our new cloud-based standard software "SAP S/4HANA" is over 50 percent.

The customer association DSAG complains that there is a lack of consultants who understand all the innovations.

Is this a bottleneck in sales?

No, that's not how I would describe it.

Sure, we have 18,800 "S/4HANA" customers, so the demand for consultants is naturally increasing.

But our partners are also in the process of building up resources, and we ourselves invest heavily in further training.

As of today, we were still able to serve every project.