German software giant SAP launched HANA enterprise cloud nearly three years ago. On April 25, The Register, a standard of the information technology industry, reported the rise of SAP’s HEC from startup mode this year.
SAP plans a rolling, two-year expansion for HEC. It hopes to break even in 2017.
SAP company insiders projected to The Register that the private cloud business would break even in 2017, as SAP begins to realize investments in infrastructure and features. SAP plans new innovations in HEC over the next two years. SAP sources expect significant expansion from the roll out.
SAP reported negative margin last year on private cloud, The Register quoted SAP’s EMA chief operating office Gonzalo Benedit. SAP’s public cloud, software-as-a-service sector is 70 percent profitable.
Benedit denied any erosion of SAP’s on-premises business by surging cloud, The Register said. SAP continues to hire staff to ensure customer contract carryover.
SAP targets the new hires to strengthen an area where rival Oracle struggles: renewals. SAP calls the new staff “customer success partners.” The employees focus on cloud platform customers who declined contract renewal. The new staff helps with architecture and training.
SAP predicted in January that cloud subscriptions and support revenue will exceed its traditional software licensing revenue by 2018.
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