German SAP in search of US computer giants

promoted his great achievements in the United States with Jim Hagemann Snabe at the co-CEO and successor of the unfortunate Leo Apotheker. Since then, SAP has been continuously rising. Sales nearly doubled to around 23.5 billion euros in 2017; The same goes for the operating result of 4.9 billion euros. Over the next two years, these figures are expected to reach around 29 billion euros and 9 billion euros. Many observers have no doubt that McDermott, who has led SAP since 2014 after Hagemann Snabe joined the Supervisory Board, will achieve the goals.

Among the few companies, SAP plays in the Champions League of the US giants of computer science. with and is one of the five largest software companies in the world. The Group is a leader in business process management software, particularly in large companies. Meanwhile, SAP has more than 400,000 customers in 25 industries and around 200 countries. The main competitors include Oracle, IBM, Microsoft and Salesforce. But despite the rapid growth, the operating margin has stagnated in recent years. In the first half of 2018, the margin was 27.3%, as announced SAP in the presentation of the semester figures on Thursday.

The margin problem arose because management invested heavily in the high-growth but low-margin cloud computing space. Cloud revenues grew 30% in the second quarter, more than many competitors. In cloud computing, companies use programs, computing power, and data center storage space from a vendor such as Amazon, Microsoft or even SAP. Ideally, IT is always immediately available with the click of a mouse. However, the Group belatedly acknowledged the trend towards this business, but then made several acquisitions in the region, most recently on April 5 with the acquisition of Callidus Software Inc. for $ 2.4 billion, a company

68% of Predictable Revenue

Financial analysts thrive on SAP with their leadership in software management, good regional diversification and strong operational cash flow. allows Walldorfer to stay the leader the time to stay. In addition, SAP is often developing relatively well even in times of economic downturn and is now the technology leader in promising new products such as the cloud. The share of project revenues remains above average due to licensing activity and subscription fees. He is currently a majestic 68%. However, SAP operates in an environment of intense competition. In addition, the margin is under pressure because the activity of cloud services is comparatively less attractive than the original core business. But from this year, the margin should increase again. The commercial performance of SAP is also vulnerable to currency effects, particularly due to the development of the euro against the dollar. This is also reflected in the figures for the first six months of 2018.

In the early years, SAP (systems, applications, products) thought that the company did not need distribution. More than 45 years after its creation in April 1972, more than 23,000 of the nearly 94,000 employees work in the sales organization. Only R & D has a bigger impact with 25,000 employees. McDermott is as mentioned above a sales professional, as it is in the book. From the copy machine vendor, the native New Yorker has risen to the top of the group since joining SAP in 2002 before joining Global Sales Manager (2008). Since an accident in 2015, a pair of sunglasses that he always wears is his trademark. At that moment, a drink in his hand, he fell so sadly into a staircase that he lost an eye. But, by this blow of fate, the 56-year-old man has not rebuffed the concept.

The shock of American mentality and German reliability, down-to-earth and developer mentality did not lead to the "clash of civilizations". it's developed into a successful unexpected bond for many. In 2017, McDermott was the highest paid CEO between the North Sea and the Alps with 13 million euros, or about 21 million euros, including bonuses from previous years, which caused a surprisingly weak emotion in Germany. With its ambitious goals, Americans are currently reasonably on the right track. At the end of the second quarter, SAP has raised its growth forecast for cloud computing activities for 2018 and 2020. If McDermott really manages to increase its market value to 300 billion euros, SAP would be almost as valuable as Google's parent company, Alphabet. At present, all the concerns in the Dow Jones – with the exception of Apple (840 billion euros) and Microsoft (700 billion euros).