New cloud bookings at SAP increased by 39 percent in the third quarter (Q3) of 2019, the German software company announced on Monday.
Cooperation between SAP and the American software giant Microsoft contributed 18 percentage points to SAP's new cloud bookings alone in Q3, according to SAP.
In the scope of this scheduled three-year cooperation, Microsoft is set to "resell components of SAP Cloud Platform alongside Azure," a cloud computing service created by Microsoft, SAP stated.
"This partnership is all about reducing complexity and minimizing costs for customers," commented Jennifer Morgan, co-chief executive officer (CEO) of SAP.
Revenues from SAP's cloud business increased year-on-year by 37 percent to a total of 1.79 billion euros (2 billion U.S. dollars) in Q3. Revenues from the Microsoft deal were not included in SAP's Q3 figures as "revenue recognition" would start in the fourth quarter of 2019, SAP noted on Monday. SAP's total revenues year-on-year grew by 13 percent to 6.79 billion euros.
"Our third quarter results reflect the momentum we've built entering the final quarter of the year and more broadly where we are on our journey of growth and operational excellence," said Jennifer Morgan and Christian Klein, co-CEOs of SAP, who were both appointed after the longtime CEO, Bill McDermott, had surprisingly announced his resignation on Oct. 11.
SAP's operating profits increased year-on-year by 36 percent to a total of 1.68 billion euros, according to the company.
Operating profits in Q3 benefited from "disciplined hiring and accelerated operating efficiency gains" as well as from "lower share-based compensation expenses," SAP stated.
"Despite continued macro uncertainties we couldn't be more confident to make 2019 another stellar year for SAP," noted Luka Mucic, SAP's chief financial officer (CFO).
Cloud computing is a model for delivering information technology services via shared computing resources (servers, storage, software) instead of having local servers or personal devices to handle applications.