Many tech companies continue to face global inflation and supply chain issues even as the pandemic winds down. The recently strengthening dollar is also causing problems for some — but not SAP, according to CEO Christian Klein. The German tech giant is in close competition with businesses in the U.S., so it experiences a “tail wind coming from currency.” That’s because unlike its rivals in America, SAP trades in euros.
As the appreciating U.S. dollar reached parity with the euro in 2022, SAP earned more than 50% of its cloud revenues from the States in its first two fiscal quarters. Meanwhile, companies such as Salesforce, Microsoft, and IBM have complained that a strong dollar would hurt their short-term profits. However, rising inflation may have accelerated adoption of cloud computing services, and supply-chain ailments have renewed interest in enterprise resource planning (ERP) solutions — both strongpoints of the German company.
SAP is the dominant player in ERP software, ahead of distant Microsoft and Oracle, and companies are rapidly discovering the value of tracking logistics, manufacturing, and human resources all in one place, pushing SAP’s value higher. The company now has its eye on reaching $22 billion in revenue by 2025.