SAP Spending Set to Soar in 2013
According to Forrester, IT spending will steadily improve in 2013 and 2014 as economic instability hurdles are cleared and an improving US economy combines with pent up demand to accelerate spending. In 2013, global IT spending will increase 5.4 percent and U.S. IT spending will top 8.3 percent, reports Forrester.
Gartner forecasts a $3.7 trillion global IT spending year in 2013, increasing 4.2 percent from last year (Gartner includes Telecom spending in its IT forecast.), while IDC foresees worldwide IT spending exceeding $2.1 trillion in 2013, up 5.7 percent from 2012.
For more read: 2013 IT Spending Predictions
While it is certainly good to see a steady uptick in IT spending, the percentage of year-over-year increase analysts predict is modest in comparison to the upbeat guidance on revenue growth recently provided by SAP.
Both 2011 and 2012 were record years for SAP in terms of total revenue, and 4Q 2012 marked the company’s 12th consecutive quarter of double-digit growth in software and software related service revenue. SAP’s total revenue in 2011 was $19 billion, up by 14 percent from the previous year, and SAP’s total revenue in 2012 was $21.6 billion, up by yet another 14 percent from the previous year.
SAP has expressed confidence that it will continue its double-digit growth in 2013 and has re-affirmed its revenue target of $26.9 billion by 2015. In fact, as reported by the Wall Street Journal, SAP co-CEO Bill McDermott believes that SAP’s total revenue may well top $28 or $29 billion by 2015.
To put these numbers in perspective, SAP’s projected growth is approximately 4x greater than what Gartner predicts for the industry and a full 2x faster than SAP’s closest competitor — Oracle.
So what makes SAP so bullish on its future growth? The answer lies in SAP’s leadership and innovation across its HANA, cloud, analytics/BI and mobility offerings.
According to Gartner, by 2015, organizations integrating high-value, diverse, new information types and sources into a coherent information management infrastructure will outperform their industry peers financially by more than 20%. Big data, Gartner reports, will create 1.9M IT jobs in U.S. by 2015.
IDC recently forecasted the big data market to grow from $3.2 billion in 2010 to $16.9 billion in 2015. Spending on big data technologies and services, IDC reports, will reach nearly $10 billion in 2013, on the way to over $20 billion in 2016.
According to MarketsandMarkets, the big data analytic industry is positioned to expand at a compound annual growth rate of more than 54 percent through 2017.
There’s no denying that companies worldwide and across all industries are investing heavily in big data solutions to drive more timely and intelligent decisions, and most experts agree that with HANA, SAP has cemented its leadership in the big-data solutions category.
Sales of HANA totaled $524.9 million during 2012, exceeding the company’s target of at least $400 million. SAP currently has about 1,000 HANA customers, and SAP predicts HANA revenue will surpass $875 million this year alone.
SAP recently announced that SAP Business Suite is now powered by SAP HANA, and SAP expects the number of customers running Business Suite on top of HANA to reach triple digits in 2013.
Embedding analytics at the transactional level opens up entirely new business models and processes. SAP on HANA affords organizations the ability to completely rethink how information is created, consumed, and shared.
Here at Optimal we think this new option for SAP Business Suite customers is a big deal — one that is sure to keep HANA adoption trending strong in 2013 and beyond.
For more read: Why SAP on HANA is a Big Deal
Even taking into account HANA’s considerable momentum and current billing as the ‘fastest-growing product in SAP history,’ we’ve only just scratched the surface of HANA’s full market potential.
Part of HANA’s beauty is that it is equally applicable to both the SAP and non-SAP worlds, and because of this, it is conceivable that in the not-too-distant future, there are likely to be more custom-built HANA applications touching non-SAP systems than commercially available ‘powered by HANA’ solutions marketed by SAP.
For more read: Custom Apps – HANA’s Big Future
HANA’s ability to access and deliver information up to100,000x faster than what was traditionally possible, its unprecedented ability to run transactions and perform analytics on a single architecture, and its dramatic simplification and cost reduction of IT landscapes makes it a cinch that HANA adoption will continue to gather steam in 2013 and the years ahead.
Not to be outdone, the cloud, analytics/BI and mobility will also add momentum to spending on SAP in 2013 and beyond. Stay tuned for more on this theme in future installments.