SAP SE Puts Focus on AI to Drive Cloud Revenue Growth
SAP SE, a leading enterprise software company, is banking on the demand for artificial intelligence (AI) to drive faster growth in its cloud revenues. The company recently appointed Philipp Herzig as its chief AI officer to oversee the implementation of AI technology across its services, with a strategic mandate to accelerate the transition for users.
Despite being late to the game in moving customers to the cloud, SAP is now seeing strong growth and aims to leverage AI services to further enhance its offerings. With more than 24,000 customers already adopting its AI tools, SAP is focusing on developing out-of-the-box AI services for cloud users that require minimal retraining.
However, this approach has raised concerns among some SAP on-premise customers, who believe that AI models trained in the cloud should also be accessible to on-premise systems. To address this, SAP is partnering with AI startups and big cloud providers like Amazon and Google to find AI applications that can integrate seamlessly with its technology.
The company plans to invest over $1 billion in AI over the next two years and has already seen a significant increase in its stock value. Bloomberg Intelligence analyst Anurag Rana believes that SAP has the potential to benefit greatly from the growing investment in generative AI by corporations, thanks to its vast trove of enterprise transactional data.
While the focus on AI is expected to drive growth for SAP, it has also led to some job losses as the company undergoes a restructuring process. CEO Christian Klein emphasized the importance of re-skilling and internal AI adoption to ensure that SAP remains productive and competitive in the market.
Overall, SAP’s strategic focus on AI signals a new era of growth and innovation for the company, as it continues to evolve its services to meet the changing needs of its customers in the digital age.