Latest news with #ChristianKlein
Yahoo
6 days ago
- Business
- Yahoo
SAP braces for IT spending lull as tariff woes intensify
This story was originally published on CIO Dive. To receive daily news and insights, subscribe to our free daily CIO Dive newsletter. Dive Brief: SAP is bracing for economic challenges sparked by shifting U.S. trade policy, executives said Tuesday during the company's Q2 2025 earnings call for the three months ending June 30. 'We have seen in the last few weeks that suddenly customers needed additional approval at the very top, so deal cycles just become longer because there [are] much more strict cost controls,' CEO Christian Klein said. 'We are not losing these deals. We just now need to be more diligent in managing the closing plans.' The Germany-based ERP vendor saw revenue grow 9% year over year to $10.6 billion (9 billion euros), largely driven by revenue surges in cloud and cloud ERP suite of 24% and 30%, respectively. However, SAP's current cloud backlog — a measure of contractually committed spend the company expects to roll into revenue over the next 12 months — declined slightly quarter over quarter, to $21.3 billion (18.1 billion euros) from $21.4 billion (18.2 billion euros) in Q1. Dive Insight: SAP completed a year-long internal restructuring around subscription-based ERP software services and generative AI deployments during the first three months of the year. Yet, immediate and long-term challenges remain for the 53-year-old enterprise technology vendor. ERP migrations are resource-intensive initiatives that can take months or years for a large organization to complete. SAP has enticed customers reluctant to shutter on-premises systems, offering technical support assurances, discount credits and embedded AI features as the clock ticks down toward the end of mainstream support services for legacy SAP ERP Central Component software suites in two years. SAP's $2.18 billion reorganization, which included the elimination of 10,000 jobs, has evolved into a period of ongoing optimization, according to CFO Dominik Asam. 'We are starting to sharpen the pencil for the planning exercise for the coming years,' Asam said, pointing to potential 1% to 2% workforce reductions later this year. AI adoption is now a lynchpin in SAP's ongoing transformation. The company's Joule AI assistant contributed to a 50% productivity boost in 'selected sales roles' and reduced the time it takes to resolve human resources inquiries by 20%, according to Klein. 'Transformation includes reskilling … reductions in areas with lower resource demand and hiring in shop profiles that define the future of our company, such as data and Business AI,' said Klein. 'It's our obligation to always look at our workforce and do our job and do … very distinct measures on reducing profiles where we don't need the people anymore.' With the end-of-support deadline looming, the company is leaning on technology partnerships to help spur migrations. SAP expanded alliances with AWS and Microsoft in the last eight months and helped EY, DXC and Kyndryl beef up their SAP migration consulting practices earlier this year. In May, the company joined forces with China-based cloud provider Alibaba Group to drive cloud ERP adoption in the region. Alibaba is key because we now have a partner to 'deliver our cloud in China for China,' Klein said. The China market is smaller than the U.S. or Germany, Klein added, but 90% of multinational companies have a footprint in the region. While SAP does not disclose China-specific earnings data, Asam said that the U.S. accounted for nearly one-third of SAP's Q2 revenues.
Yahoo
7 days ago
- Business
- Yahoo
SAP clients reviewing cloud services spending amid tariff risks, CEO tells WSJ
- SAP (ETR:SAPG) is seeing some clients take longer to subscribe to its cloud services due to wariness around sweeping U.S. tariffs, CEO Christian Klein has said. In an interview with the Wall Street Journal, Klein flagged that the caution was apparent in industries like auto manufacturing, which is considered to be particularly exposed to President Donald Trump's aggressive tariff agenda. Carmakers are now facing a 25% levy on finished vehicles made overseas imported into the United States. Klein added that, although SAP has "strong momentum," it remains "really hard to predict how the second half will unfold." Germany-listed shares in SAP (ETR:SAPG) fell by more than 3% on Wednesday after the information technology group posted better-than-anticipated quarterly profit and sales, but opted not to lift its full-year outlook, disappointing some investors hoping for a guidance raise. For the three months ended June 30, the German software manufacturer reported adjusted earnings of 1.50 euros per share on revenue of 9.03 billion euros, above consensus estimates of 1.43 euros and 9.09 billion euros, respectively. Cloud revenue jumped 24% versus a year ago to 5.13 billion euros in the second quarter, slowing from a 27% uptick in the prior quarter and 25% in the corresponding period in 2024. Looking ahead, SAP said it expects 2025 outlook adjusted operating profit to between 10.3 billion euros and 10.6 billion euros, unchanged from its prior projections. A year earlier it stood at 8.15 billion euros. SAP said it was facing "elevated levels of uncertainty and reduced visibility," with CFO Dominik Asam flagging that the business was keeping close tabs on "geopolitical developments and public sector trends." In a note, strategists at Deutsche Bank warned that the guidance "leaves quite some margin for error." Related articles SAP clients reviewing cloud services spending amid tariff risks, CEO tells WSJ Risks Rising? Smart Money Dodged 46%+ Drawdowns on These High-Flying Names If Powell goes, does Fed trust go with him?
Yahoo
22-07-2025
- Business
- Yahoo
SAP's Profits Top Estimates, Though Cloud Revenue Growth Slows
SAP (SAP) reported second-quarter profits that topped analysts' estimates, though cloud revenue came in lower than expected as growth slowed. The German software giant posted adjusted earnings per share of 1.50 euros ($1.76), up from 1.10 euros per share in the year-ago quarter and above analysts' estimates compiled by Visible Alpha. Revenue of 9.03 billion euros ($10.61 billion) was roughly in line, as cloud revenue grew 24% to 5.13 billion euros, slowing from over 25% growth in the year-ago period and just short of estimates. SAP maintained its full-year cloud revenue forecast of 21.6 billion euros to 21.9 billion euros. Wall Street analysts were looking for 21.31 billion. CEO Christian Klein said the results come as the company's AI assistant Joule is becoming available "everywhere and for everything." "Enterprise operations are about to enter a new era, and SAP is best positioned to benefit from that evolution," Klein said. SAP shares were down close to 2% in extended trading. The stock was up nearly 25% for 2025 through Tuesday's close. Read the original article on Investopedia
Time of India
14-07-2025
- Business
- Time of India
Siemens and SAP call for EU to revise its AI regulations: Report
ZURICH: Siemens and SAP CEOs have urged the European Union to revise its artificial intelligence legislation, saying the current rules stifle innovation. SAP CEO Christian Klein and Siemens CEO Roland Busch told the Frankfurter Allgemeine Zeitung that a new regulatory framework is needed to support rather than hinder technological advancement. The EU's AI Act, which became law last year, governs the development and use of AI systems to ensure they are safe, transparent and respect fundamental rights. The law classifies AI applications into risk categories, according to which providers must meet certain security and transparency requirements. But Siemens' Busch said the Act was a key reason Europe is lagging, adding overlapping and sometimes contradictory regulations are hampering progress. He said the EU's Data Act, another law which sets out obligations on how companies use consumer and corporate data, was "toxic" for developing digital business models. While several companies including Google owner Alphabet and Facebook owner Meta recently wrote to Brussels asking for the rules to be postponed, Busch declined to sign their letter, saying the proposal did not go far enough. SAP's Klein warned against simply copying the U.S. and only investing heavily in infrastructure and data centres, emphasizing that infrastructure shortages are not the main barrier in Europe. Instead, both CEOs called for reforming data rules before investing in data centres. "We are sitting on a treasure trove of data in Europe, but we are not yet able to tap into it," Busch told the newspaper. "It's not access to computing capacity that we're currently lacking, but the release of resources."
Mint
13-07-2025
- Business
- Mint
Siemens and SAP call for EU to revise its AI regulations
ZURICH (Reuters) -Siemens and SAP CEOs have urged the European Union to revise its artificial intelligence legislation, saying the current rules stifle innovation. SAP CEO Christian Klein and Siemens CEO Roland Busch told the Frankfurter Allgemeine Zeitung that a new regulatory framework is needed to support rather than hinder technological advancement. The EU's AI Act, which became law last year, governs the development and use of AI systems to ensure they are safe, transparent and respect fundamental rights. The law classifies AI applications into risk categories, according to which providers must meet certain security and transparency requirements. But Siemens' Busch said the Act was a key reason Europe is lagging, adding overlapping and sometimes contradictory regulations are hampering progress. He said the EU's Data Act, another law which sets out obligations on how companies use consumer and corporate data, was "toxic" for developing digital business models. While several companies including Google owner Alphabet and Facebook owner Meta recently wrote to Brussels asking for the rules to be postponed, Busch declined to sign their letter, saying the proposal did not go far enough. SAP's Klein warned against simply copying the U.S. and only investing heavily in infrastructure and data centres, emphasizing that infrastructure shortages are not the main barrier in Europe. Instead, both CEOs called for reforming data rules before investing in data centres. "We are sitting on a treasure trove of data in Europe, but we are not yet able to tap into it," Busch told the newspaper. "It's not access to computing capacity that we're currently lacking, but the release of resources." (Reporting by John Revill; Editing by Sandra Maler)
