SAP Australia almost triples profit

SAP Australia saw a whopping 283 percent increase in profit in 2013, its annual financial report has shown.

The local entity of the German monolith raked in $30.8 million in profit after tax last year on the back of over $667 million in revenue.

"Our results in terms of revenue and profitability were strong and in line with expectations," said Greg Miller, chief operating officer of SAP ANZ.

SAP Australia recorded a $13 million year-on-year decrease in "income tax expense" that contributed to the bottom line, but Miller did not respond to CRN's enquiry regarding this difference.

"We saw significant growth in our cloud business," Miller told CRN. "We are supporting Australian organisations in their transition to the cloud as they look to do more, faster – with less capital expenditure."

The cloud emphasis echoes the global parent's plans to restructure and move away from traditional enterprise software to a service-orientated model.

In Australia, the focus on cloud computing has come hand-in-hand with a deliberate push to increase channel sales. In March, CRN reported SAP Australia had multiplied its partner network fivefold.

Miller previously said that profits fell in 2012 due to the cost of its channel strategy, but now that investment is starting to bear fruit.

"[Last year] was about investment in our channel, and our partners were integral to our growth. We ramped up recruitment and enablement, and this investment is yielding results," Miller told CRN.

The chief operating officer expects the reseller growth to continue this year.

"Our global goal is to achieve 40 percent of revenue with our partners, and SAP and our partners in Australia are well on our way in achieving this," he said.

In terms of product, Miller told CRN that HANA would deliver the growth this year.

"Our in-memory SAP HANA platform, and the analytics and applications that we and our partners develop and deliver on it, will continue to bring value to customers in Australia," he said. "We have invested in our local cloud infrastructure, both in terms of physical data centres as well as in cloud sales and marketing capability."

SAP's vice president of media relations, Christoph Liedtke, told sister publication iTnews that – despite the cloud-oriented restructure – the company planned to have more employees at the end of this year than at the beginning.

The global executive team has not been spared from the firm's realignment, with this month's departure of cloud president Shawn Price and technology chief Vishal Shikka.

SAP is traditionally known for its ERP software. This week Gartner announced that the multinational retained top spot in the global supply chain management software market with over US$2 billion of revenue and 23.9 percent market share.