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SAP CEO name drops Jensen to give Q1 numbers an AI gloss

Cloud revenue – broken out for the first time – accounted for €3.9 billion

The CEO of SAP did some serious AI name-dropping this week as the ERP vendor served up its results for the first quarter.

Christian Klein talked up the company’s progress in embedding AI in its product set and in its customer base and sought to emphasise its progress in building “new GenAI capabilities” with Nvidia.

“Jensen and I are looking forward to telling you more about this partnership at [customer event] Sapphire,” he told analysts while unveiling the figures.

Reflected glory apart, revenues for the quarter ending March 31 came in at €8 billion, up 8% on the previous year. Of that, cloud revenue – broken out for the first time – accounted for €3.9 billion, up 24% on the year.

The company is in the midst of a “transformation program” this year, which meant first quarter operating profits were dented by a €2.2 billion restructuring provision. This left it nursing an operating loss of €787 million, compared to an operating profit of $803m last year. This resulted in a net loss after tax of €824 million, compared to a profit of €509 million a year ago.

Without the impact of the restructuring charge, it said, non-IFRS operating profit was up 16% to €1.53bn.

The transformation program is focused on bolstering “key strategic growth areas” and aims to “capture organizational synergies and AI-driven efficiencies.”

In a Q/A following the results announcement, Klein said “I have no C-level conversation anymore without talking about Business AI and the impact on the business.  

“Just last week, I had a conversation about production downs [outages] in manufacturing and how our GenAI hub can help to get the machines faster up and running again, which actually would result in hundreds of millions of efficiency gains for this large chemical company.”

In a fast-moving and turbulent market obsessed with new entrants, it might not seem obvious what role a legacy organization like SAP would play, even as it continues to build AI capabilities into its product set – including GenAI. And, of course, stays pals with Jensen.

Klein said it was building “standard AI use cases for automation of repetitive task in our base packages. On top, of course, now we are delivering more and more GenAI models, which also require high computing power.”

But companies adopting AI platforms need to fuel them with data, and as the company’s president for customer success, Scott Russell, said, not all data in the enterprise is equal. “The data that sits in the SAP platforms is the most valuable data that they have.”

“It's got the integrity, it has got the context, it's got the metadata, it's got the semantics, and then you can get the innovation insights.”

And that grip on customers' historic data is, arguably, worth almost as much as being on first name terms with Jensen. Almost.