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SAP: CLOUD TO OVERTAKE LICENSES Featured

Bill McDermott, SAPThe news in SAP's financial results for 2017 was what lies ahead for this year. As the company continued the pattern of double-digit cloud revenue and single-digit software growth, it foresees a fundamental change in the source of revenue for the year ending December 31.

"Cloud revenue is expected to pass license revenue for the first time," CEO Bill McDermott said during this week's earnings webcast. After-tax profit for 2017 hit about $5 billion, an increase of 15 percent over the prior year. Revenue for the most recently ended year was approximately $29 billion, up 6 percent from 2016, and up 8 percent in constant currency. The big numbers are coming from SAP Hana, which reached 7,900 customers at the end of the last fiscal year, an increase of 46 percent.  Cloud bookings were up 31 percent for the fourth quarter, 30 percent for the year. The company also signaled plans for growth with the planned acquisition of Callidus Software. Based in Dublin, Calif., the company markets the CallidusCloud, described as providing quote-to-cash applications. Calldius, scheduled to report 2017 earnings on February 8, expected this year's revenue to range from $296 million and $303 million. For the third quarter ended September 30, revenue hit $64.2 million, an increase of 22 percent from $52.5 million a year earlier.

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