SAP profits slumped an eye-watering 47% in 2024 on “restructuring expenses of €3.1 billion” due in large part to its 2024 “transformation program” which saw ~10,000 staff including “expensive resources” laid off.
The figures (€2.5 billion was for payouts) were a blot on an otherwise highly successful year for SAP, which it reported on January 28.
Total revenues for 2024 were €34.176 billion, up 10%. SAP also boasted of a €63 billion “cloud backlog” (contractually committed cloud revenue SAP expects to recognize over 12 months) on the Q4 earnings call.
No ECC extensions, but…
Critically for end-users, amid plenty of market chatter, SAP is sticking to its guns and is not going to change its 2027 date to end support for ageing ECC and R3 ERP systems, CEO Christian Klein said on a Q4 call.
“The end of maintenance by 2027 will not be changed,” he said bluntly.
A “SAP ERP, private edition, transition option” will, however, give some Very Special customers a further three years, a spokesperson suggested; helping them modernise through to 2033 under certain circumstances.
The programme, said Klein, is “reaching out with a helping hand to a very few large customers” struggling to get modernised by the 2030 cut-off for extended support. “Because to transform and consolidate ERP and business processes in over 100 countries is sometimes not that easy…”
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Klein added that SAP will shortly “introduce licensing options that allow customers to upgrade and switch easily to our newest cloud solutions across the whole SAP business suite, all without additional negotiations.
“For customers that have landed with SAP, we will enhance strategic migration incentives to expand across our SAP business suite,” he added.
SAP will also “address these challenges in the data and AI space [of siloed data], with one of the biggest innovations SAP has ever delivered. We will harmonize structure and unstructured data, SAP and non-SAP data, always with the relevant semantics. And by that, we will make AI agents much more powerful,” Klein said, without sharing further details yet.
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More broadly, the ERP specialist touted IBM going live with SAP’s SuccessFactors HR software “for its over 275,000 employees in over 80 countries. It was one of the largest and most complex deployments of SuccessFactors in the history and delivered completely on time…”
SAP also landed major deals with energy supermajors BP and Total Energies to migrated SAP systems to the cloud and “signed up many, many automotive [companies# given they are not in a good position right now, given all the concerns which are existing in this industry… they're shifting maybe the first part or maybe 1/3 of the landscape to the cloud but then really focusing [on the] value-add; they are not only lifting and shifting to a cloud infrastructure. We are intensively working on process simplification. They need to run new business modules,” said Klein.
