Mocked by Oracle, SAP Cloud ERP Revenue Up 46% in Q3

Amid resurgent growth for its overall cloud business, SAP’s S/4HANA revenue rose 46% in the third quarter, trailing 60% for the cloud ERP suite that arch-rival Oracle has repeatedly destroyed.

In my weekly Cloud Wars Top 10 ranking, SAP #5 and Oracle #6 are like the old adversaries vying for leadership in the burgeoning market for modern and modular cloud ERP systems.

In light of these staggering numbers, it will be difficult for Oracle to credibly continue to mock the reception of S/4HANA in the marketplace. Here’s what the above growth rates translate into Q3 revenue and current bookings for S/4HANA:

  • Q3 S/4HANA revenue up 46% to $320.2 million; and
  • Q3 S/4HANA backlog up 60% to $1.48 billion.

Anyone who pays even the slightest attention to this space has probably seen the very harsh words of Oracle chairman Larry Ellison that SAP is a non-factor in the cloud ERP market. Ellison has also mocked SAP’s cloud ERP efforts for being almost exclusively hosted versions of its on-premises ERP suite.

Well, no one ever said that playing in the biggest growth market the world has ever known would be a contactless experience, so it’s understandable that Ellison would want to position his company’s Fusion ERP as the runaway favorite, while also taking advantage of the competitive offering. of SAP would ruin .

But if we look at this objectively, it is undeniably clear that SAP’s S/4HANA cloud ERP revenues are very close to Oracle’s Fusion ERP.

And wrap your ERP battleground brain around this: based on the numbers released by SAP yesterday in the preliminary Q3 results, SAP’s cloud ERP offering is growing faster than Oracle’s. As for growth rates, here are the side by side comparisons:

Now I want to point out that in the last quarter of Oracle…FY21 Q4 ended May 31 – it posted a Fusion ERP growth rate of 46% in what has traditionally been the company’s largest and most robust quarter. So it’s clear that both companies are finding an eager and widespread demand for their new generations of cloud ERP applications that can handle the massive demands of data-intensive digital business in today’s tumultuous global economy.

And a few months ago, SAP CEO Christian Klein hit back at Oracle, saying that SAP Oracle consistently hit head on in head-to-head battles: SAP hits back at Larry Ellison: ‘Hundreds’ Q2 wins over Oracle.

Final Thoughts

I estimate—perhaps a better word is guesswork—that for the Oracle quarter ending Aug. 31, Fusion ERP’s revenue was about $390 million to $400 million.

That’s no doubt a lot bigger than the $320 million for the third quarter that SAP just posted — about 25% bigger.

But as I noted above, S/4HANA is growing faster than Fusion ERP, at least for now, and the 60% backlog growth for that product bodes well for stronger growth for SAP’s next-gen ERP.

So maybe Ellison will tone down the attacks.

Maybe not.

Anyway, in the Cloud Wars we see again that the big winners – say it with me! – are the customers who reap all the benefits of this relentless and relentless competition.

And may it always be so!

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