SAP eyes 50% increase in sales by 2020

Frankfurt - German software giant SAP said on Tuesday that it aims to lift annual revenues by around 50% to $30-32bn by 2020, thanks to cloud or internet-based computing.

"SAP continues to expect fast growth in its cloud business," the company said in a statement, unveiling a sales projection for 2020 for the first time.

"We had exceptional growth in our cloud business," in 2014, said chief financial officer Luka Mucic.

"We expect cloud subscriptions to exceed software license revenue in 2018. At that time SAP expects to reach a scale in its cloud business that will clear the way for accelerated operating profit expansion," he said.

Cloud computing is a way of delivering different services - such as servers, storage and applications - to an organisation's computers and devices through the Internet.

It can allow companies to reduce their investment in equipment and maintenance expenses.

As already reported last week, SAP's underlying or operating profit fell by 3% to 4.33 billion euros in 2014 as a result of the cost of its expansion into the cloud.

Net profit slipped by 1% to 3.275 billion euros on a 4% increase in revenues to 17.56 billion euros.