23 July 2024
If you are covering SAP’s latest financial results, please find below a comment from Ben Barringer, technology analyst at Quilter Cheviot:
“SAP is arguably the first company to use generative artificial intelligence in a way that is actually having an impact on its bottom line. It has implemented the technology to read documents and generate summaries, allowing it to remove administration staff and instead bring in data scientists who can help interrogate the data produced and bring business insights.
“SAP is also continuing to take advantage of the digitisation of systems trend that accelerated during the pandemic. It is in the midst of transferring all its customer base onto its cloud product that also allows it to upsell its other products and services. That backlog is increasing, giving SAP a consistent stream of revenue. It is this trend that has allowed it to grow revenues by 10% and profits by an impressive 33%.
“The macroeconomic environment has been challenging for software companies, but SAP is a very resilient business. With it being the first use case of generative AI and it highlighting the impacts it can have, SAP should be in a position to continue its strong growth over the coming year and beyond.”
