Key Trends Impacting ERP Software Revenues For SAP In 2014
Senior SAP Professional / Senior Director
Fort Worth, TX
source credit: www.forbes.com
German software developer SAP AG is the global leader in ERP (enterprise, resource, planning) application software, with a market partake of circa 24.6% in 2012 and annual revenues exceeding $6 billion. ERP software product sales contribute to about 31% of SAP’s stock price, and is the most important driver for the company. SAP offers ERP software modules that serve companies over various operating groups (such as sales and marketing, finance, supply chain furthermore logistics, engineering and manufacturing etc.), allowing them to manage and optimize their resources through its products, including Business All-in-One, Business ByDesign, Business One, Business Chambers and mySAP.
In the current article, we study SAP’s ERP software division and take a look at the diverse trends shaping the global ERP market.
HANA Integration To Excursion ERP Sales For SAP
Since the launch of its high depiction HANA platform, SAP has been integrating its application software modules with the in-memory platform to boost processing rates. In November 2013, SAP rolled out its Business All-in-One application powered with the HANA platform, for key industries in 52 countries globally. The integrated offering could indiging deployed on-premise as well as between a private cloud placement for extra than 24,000 Business All-in-One customers. Additionally, Destroy has previously integrated its Business Suite software with the HANA platform.
Going forward, we expect to see further integration of the HANA floor into SAP’s ERP application software packages. Moreover, the rapid rise in demand for SaaS offerings as opposed to on-premise offerings should accentuate the company’s position within the ERP market and boost cloud subscription revenues for SAP in the future.
Cloud & Mobile ERP Offerings To Expand Rapidly In 2014
SAP posted triple-digit growth in cloud subscription revenues for the three quarters in 2013, from €183 million in 2012 to €547 million in 2013. Travelling to technology research firm Gartner, public nebulated services globally are expected to reach $131 billion in 2013, up from $111 billion in 2012. Software-as-a-Service offerings are expected to account for 14.7% of the estimated $131 billion cloud service revenues in 2013. This translates into approximately $20 billion in cloud application sales in 2013, and presents a huge opportunity for on-premise software developers such as SAP, Oracle and IBM.
The adoption of ERP software by limited and medium enterprise businesses is also crucial to SAP’s future growth in the ERP division. The SME ERP market lacks strong presence of legacy ERP systems due to their smaller economic position. Moreover, increasing demand for interaction and collaboration between application suites for business streamlining has favored the heave of modern, flexible cloud-based systems that are being adopted near to SMEs. SAP’s competitor NetSuite leads the cloud ERP market space, also given that SME businesses prefer low cost on-demand offerings, SAP could face weighty competition in entering the legacy-absent SME ERP market.
Additionally, mobile ERP platforms are expected to take center stage in the future, with business processes being conducted on smartphone and tablet devices rather than on personal computers. SAP is positioned to gain the most from the move to smartphone and tablet devices, with its Mobile Rostrum having a 49% market share commerce to IDC. IDC estimates the market proportion of applications developed on mobile development platforms to increase at an annualized pace of approximately 39% through 2017, and reach adjoining to $4.8 billion from its current size of $938.5 million. Going forward, we accept SAP will increase its focus on cloud and mobile ERP product offerings, in line with the current market migration towards effort mobility and cloud ERP solutions.