In a clear indication of artificial intelligence’s transformative power, SAP SE, Europe’s largest software company, is experiencing unprecedented growth in its cloud-based revenue. Dominik Asam, SAP’s Chief Financial Officer, credits AI with significantly accelerating the company’s shift from traditional on-premise installations to cloud-based solutions.

“The advent of artificial intelligence has propelled the story of the transformation to the cloud,” Asam stated, noting a 25% increase in cloud revenue on a constant currency basis. This shift is part of a broader trend where businesses across the globe are transitioning to the cloud to leverage advanced AI capabilities.

This strategic pivot is about adapting to new technologies and capitalizing on them. SAP reported a staggering growth rate in its Cloud Committed Bookings (CCB), representing the revenue expected from cloud subscriptions over the next year. With a 28% increase, the company has set a new record in growth, highlighting its successful capture of market demand for cloud services.

Central to SAP’s success is its Cloud IP suite, an integral part of the company’s offerings that has generated more than 30% growth for nine consecutive quarters. This suite supports a wide range of applications across various sectors of enterprise operations, including finance and supply chain management, where AI’s impact is particularly pronounced.

“The market for cloud services, particularly those enhanced by AI, is robust, but we are outperforming it significantly,” Asam explained. He mentioned that while the market growth rate hovers in the low to mid-teens, SAP has achieved more than twice that rate, indicating a strong competitive edge and market share gains. These gains come at the expense of competitors and from replacing in-house solutions that companies previously relied on.

Despite recent concerns about tech companies’ performance in China, Asam expressed confidence in SAP’s positioning. While acknowledging the potential for growth in China, he emphasized that other regions are more critical for SAP’s overall performance. “We have been super strong in Asia-Pacific outside China, Europe is performing well, and the United States remains our biggest market,” he noted.

This geographic diversification helps mitigate risks and leverages opportunities across global markets. As companies increasingly rely on sophisticated cloud solutions to drive efficiency and innovation, SAP’s focus on integrating AI into its cloud offerings positions it well to lead in the evolving enterprise software landscape.