SAP Benefits From Privacy Concerns in Switch to Cloud, CEO Says
(Click Davos for more on the World Economic Forum.)
(Bloomberg) — SAP SE Chief Executive Officer Bill McDermott said the German software maker is benefiting from concerns about data privacy, helped by its longstanding roots as a manager of companies’ information.
“Customers, especially in Europe, find tremendous security in knowing the SAP brand,” McDermott said today in an interview at the World Economic Forum in Davos, Switzerland. “The idea of a startup culture or a go-go cloud culture is not playing as well in an environment that’s more risk averse and more security-centric than it was, let’s say two years ago.”
SAP, a 43-year-old company that’s making an uneasy transition from software its customers run in their own data centers to newer programs delivered as Web services, is benefiting from its ability to offer businesses more flexibility, the CEO said.
For example, clients can choose whether to run certain SAP software on their own computers, in a computing “cloud” hosted by SAP, or in one managed by an SAP service partner. The transition to online software is cutting into SAP’s profit margins, the company reported yesterday.
Germany, with its robust financial and manufacturing industries and a global export business, is becoming an attractive market for software companies delivering online cloud services. Workday Inc. said today it plans to expand from its present 170 customers in Germany. Salesforce.com and Amazon.com Inc.’s Web Services unit are also investing in the country.
Technology companies are also running into the need to ensure businesses’ data is stored locally. The location of data centers has become a hot issue in Europe after former National Security Agency contractor Edward Snowden revealed the extent on U.S. government spying.
“It’s not like we’re trying in any way to deliberately advantage ourselves,” McDermott said. “The 43 years of doing this really matters.”
To contact the reporters on this story: Matthew Campbell in Davos, Switzerland at mcampbell39@bloomberg.net; Jacqueline Simmons in Davos, Switzerland at jackiem@bloomberg.net; Aaron Ricadela in Frankfurt at aricadela@bloomberg.net To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net Ville Heiskanen
