SAP surpassed Salesforce in fourth-quarter revenue, clearly number one in apps

A few months ago, before high-flying Salesforce took the Icarus curve and plummeted back to Earth, CEO Marc Benioff pointed out that Salesforce’s quarterly revenue had surpassed comparable figures from SAP, making Salesforce the world’s largest vendor of enterprise applications.

It was a truly remarkable achievement, and at the time it seemed to foreshadow a new era for Salesforce and Benioff.

But as is often the case with appearances, the man was wildly deceiving, as we’ve since seen Salesforce’s reign as the world’s largest enterprise application vendor come to a screeching halt after just one quarter at the top.

Looking at each company’s most recent results, the comparison below shows that SAP’s most recent sales exceeded Salesforce’s by 17%:

Now for sure possible that in late February, when Salesforce reports its fourth-quarter financial results for the quarter ended Jan. 31, its revenue will rise to $9.2 billion. I highlighted the word “possible” because we don’t have any official insight from Salesforce on which to base such a forecast, as the company chose not to issue any guidance during its Nov. 30 earnings call, saying that the market is too bad. confused to read. This inability or unwillingness to provide revenue guidance has resulted in Salesforce’s growth rate plummeting to 14%, the only time in the past five years that number has been below 20%.

The complete lack of guidance represented a very strange situation, to say the least, for a world-renowned company built to help its customers track revenue and projects.

Meanwhile, at SAP, the company’s excellent cloud performance not only in the fourth quarter but throughout 2022 has led CEO Christian Klein to predict that SAP’s 2023 cloud revenue will be between 22% and 25% at constant exchange rates 16.68 grows to a billion dollars. $17.11 billion.

Here are some comments from Klein from last week’s earnings call that highlight why he and the company are moving forward in the year ahead.

• Huge Cloud Deals: Asked about the growing number of very large cloud-based deals, Klein said: “It also indicates that with deals like BMW, Porsche and Merck, many large companies are now following our lead. And of course there’s a certain ramp in their contract, so we’re very confident that we already have the backlog to meet our 2023 ambitions.”
• Bullish guide for 2023: Asked about the ambitious guidance for 2023, Klein said: “The cloud is accelerating again, whether it’s with customers like BMW, where we’re automating manufacturing, in finance, where we’re working on analytics, or if we’re working on the world’s supply chains to make them more resistant. Or last but not least, helping clients like Exxon and others measure [sustainability] in a standardized way and affects circular and other sustainability capabilities. The pipeline is actually very strong and we’re just as confident as we were last quarter.”
• “One of our most successful offers ever”: In his opening remarks, Klein gave this remarkable take on the success of SAP RISE, his highly innovative and unprecedented two-year customer outreach program: “RISE is at the heart of our strategy with SAP and is one of our most successful offerings ever.”
• Why customers choose RISE: Scott Russell, Chief Customer Success Officer, offered this perspective on RISE: “Thousands of customers choose SAP and RISE with SAP because today’s market needs companies they trust. More than ever, trust in technology, trust in partnership, trust in the ability to provide scale, resiliency and excellence to help you navigate, whether it’s supply chain, sustainability or anything else.”
• Concur bounces back: Coincidence revenue has returned to what CFO Luka Mucic called “pre-pandemic levels” with growth in the mid-20s.

Final thought

As I’ve noted before, in Cloud Wars, no one holds first place in any part of this remarkable market. Each company has nothing more than a temporary lease that can be picked up at any time by the ultimate landlords – the customers.

Salesforce, let’s see if it can close the gap on SAP in the fourth quarter of FY23 ended January 31.

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