**Germany**: SAP announces that its AI initiatives have delivered €300 million in savings for 2024, with projects anticipated to exceed €500 million. The company is also enhancing revenue with AI solutions included in 50% of its cloud deals, indicating significant growth potential moving forward.
At a recent earnings call, SAP disclosed the substantial financial impact of its AI initiatives, claiming that the technology has already delivered savings of €300 million ($324 million) in 2024, with anticipations that this figure will exceed €500 million ($540 million) imminently. The company’s chief, Christian Klein, noted that AI is serving as a significant driver of efficiency, stating, “Overall, we expect the one-way efficiency effect of our existing AI implementations of roughly €300 million already this year. And for the very near future, we expect to cross the €0.5 billion mark.” These advancements include markedly reduced contract processing times by 75% and the automation of various sales and operations functions.
Furthermore, SAP is not only achieving cost savings but is also enhancing its revenue through AI solutions, as evidenced by the fact that 50% of its cloud deals in the fourth quarter of 2024 incorporated AI-powered elements. Klein remarked, “The most exciting thing about half of our cloud order entry in Q4 were deals that included AI use cases,” emphasising how such innovations are propelling the company’s cloud growth.
The company also highlighted its strong performance in cloud revenue across several regions including Germany, Spain, China, and India. Dominik Asam, SAP’s CFO, commented on the growth, saying, “Germany, Spain, China, India and Japan all had outstanding performances in cloud revenue, while Brazil, Canada and Saudi Arabia were particularly strong.”
In an effort to bolster its strategic growth in the region, SAP appointed Rajeev Singh as the India Head – Corporates for South Asia, bringing over two decades of expertise in business strategy and digital transformation to the role.
Amidst the competitive landscape of technology firms heavily investing in large language models and general-purpose AI, SAP is focusing on developing AI that is intricately integrated into business processes. Klein elaborated, “Thanks to our ecosystem approach on the China AI hub, we are flexible when it comes to AI infrastructure and large language modules. We benefit from cost reductions and progress in the LLM space.” This indicates a strategic choice to leverage business-context-aware AI that can execute decisions based on a nuanced understanding of real-world operations.
Looking ahead, SAP is preparing to significantly expand its AI capabilities in 2025, committing 30,000 developers to AI projects and introducing new automation tools. At the forefront of this initiative is Joule, SAP’s Agentic AI system, which, as Klein explained, will go beyond basic AI functionalities. “Joule will become the super orchestrator of these agents, carrying out complete tasks autonomously and end-to-end, taking over significant workload from humans,” he claimed, highlighting its potential to enhance efficiency further.
Additionally, SAP aims to dissolve data silos by integrating structured and unstructured data from both SAP and non-SAP systems, which Klein referred to as a transformative strategy that might unlock new AI-driven business models. He stated, “We will harmonise structured and unstructured data, SAP and non-SAP data, always with the relevant semantics. And by that, we will make AI agents much more powerful.”
If SAP’s ambitious strategy comes to fruition, AI could evolve into a billion-dollar business for the company, with AI already playing a pivotal role in the majority of its cloud transactions and a robust €63 billion ($68 billion) cloud backlog. This places SAP in a position not merely to follow the AI trajectory but to shape the future of AI in enterprise software, reaffirming its commitment to driving innovation through advanced technologies.
Source: Noah Wire Services
