While revenue from on-premise software, the old enterprise space, fell 5% from the prior year, the company said its cloud subscription and support revenues rose 146%, year over year, to $269 million. The company said in its earnings call that 30% of its revenue in the Americas now comes from cloud.
Total operating profits were up just 5% year-over-year, to $1.8 billion, but that masked both the successful transition and the strong Euro. It was also in sharp contrast to the latest quarterly number from Oracle and IBM, both of which disappointed the street.
McDermott had been talking up HANA and the possibility of new earnings momentum since the summer, but it still seems to have caught traders by surprise. Over the last three months the stock had twice fallen into the $71/share range, and only began its decisive move up to today's $78/share price last week. Over the last month SAP shares are up almost 6% in price, while Oracle is down 3% and IBM is down almost 8%.
If the whip hand in enterprise computing has moved to SAP there's an irony in it. The world's first commercial computer,
, was developed at the University of Pennsylvania, a little over 12 miles from SAP's U.S. offices.
At the time of publication, the author owned 117 shares of IBM.
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