Underpinning most new technological innovations, the pace of cloud adoption is exceeding market expectations. Part of that growth is driven by an interest in platform as a service (PaaS), which helps SAP customers transform business models, improve supply chain resiliency, modernize work environments, and address other pressing realities.
In the first half of this year, SAP reported the major milestone of cloud revenue becoming its largest revenue stream. Cloud revenue was up 25% at constant currency and 33% at nominal levels. But more notable is the recent rise in current backlog, accelerating at 25% and exceeding €10 billion.
Top-line cloud performance is clearly ahead of plan – and for a good reason. Businesses are seeking reliable solutions to address the current macroeconomic environment and currency tailwinds. Intensifying geopolitical conflicts, regulatory fragmentation, sustainability awareness, and inflationary challenges are compelling organizations to advance their timelines on digital business initiatives, such as modernizing work environments, improving system reliability, and supporting hybrid work models.
As mentioned, a big part of the cloud momentum story for SAP is related to our PaaS technology, SAP Business Technology Platform (SAP BTP). Revenue from the platform increased by an impressive 43% at constant currency, up 50% in nominal levels.
Why PaaS Adoption Is on the Rise
The growing interest in SAP BTP reflects the “unlearning” organizations experience when transitioning to the cloud. According to SAP Chief Marketing and Solutions Officer Julia White, the cloud forces people to “question and unlearn [on-premise approaches] and start from a fresh perspective knowing what they now have and the tools available [to them].”
Unlike other PaaS and hyperscaler solutions, SAP BTP is business-aware, apps-aware, and process-aware. As a result, our customers can gain that business context they need – which is difficult to attain any other way.
The platform pulls together traditionally fragmented master data – such as employee, vendor, and material information – into one centralized system and uses it to drive business processes with embedded analytics and artificial intelligence (AI). For example, organizations can handle processes, including compliance with local tax laws, employee regulations, data privacy laws, and environmental, social, and governance (ESG) requirements, with greater ease and speed.
In addition to data, analytics, and artificial intelligence, SAP BTP provides a range of application development, automation, and integration services – all in a unified, on-demand environment. The platform also delivers a developer-ready framework of solutions, services, tools, content, and templates that are simple to integrate and can be customized to meet unique business needs.
For many SAP customers and partners, this cohesive framework can improve their ability to leverage native SAP connections and services, speed time to value, and accelerate the benefits of the cloud. They can achieve foundational changes critical to their long-term digital transformation journey, such as breaking through the gridlock of data silos and democratizing development, integration, automation, and advanced analytics capabilities. More importantly, the boundaries of existing technologies can be expanded to reimagine employee and customer experiences, line-of-business processes and business models, and the possibilities of data-driven intelligence.
That capacity to speed innovation and infrastructure integration makes SAP BTP a compelling choice for SAP customers. With the platform, they can overlay business context through native APIs and connectors and streamline the process of leveraging new technology services.
For example, “HeidelbergCement decided to move from its on-premise ERP to SAP S/4HANA Cloud on Microsoft Azure, [and] will be using SAP BTP as an integration and development platform to provide access to SAP services,” according to SAP CEO Christian Klein.
Such digitalization supports the distinctive ways companies must operate while becoming more efficient and productive across their business processes.
On a Trajectory of Transformation and Growth
SAP’s first-half results show that PaaS – specifically SAP BTP – resonates with organizations as they confront and compete in an increasingly challenging external environment.
SAP customers are capitalizing on the platform to help unlock substantial value from their digital investments. And as SAP BTP continues to evolve with new capabilities, technologies, services, and best practices, that transformation trajectory will bring to life a platform-centric future – supporting sustained growth and profitability.
To learn more about how SAP partners are helping businesses succeed with a unified technology platform, check out recent success stories or explore related articles. Or if you’re interested in software partnership opportunities with SAP, check out SAP PartnerEdge, Build.
Jagdish Sahasrabudhe is CTO of the Global Partner Organization at SAP.