Translated by
2020/03/18 13:33:33

Financial performance of SAP CIS

The main article about the company: SAP CIS


2019: Showed to SAP CIS a loss and reduced personnel

Revenue of SAP CIS in 2019 made 482.5 million euros, follows from the annual report of the company published in March. Growth of turnover was about 2%, but after two profitable years the company finished year at a loss in the amount of 21.17 million euros after a deduction of taxes.

The staff of the Russian division of SAP was a little cut down in 2019: from 837 to 822 employees.

The Russian division of SAP carries to key subsidiary companies. Among all like those in 2019 SAP CIS took the 23rd place from 28 on total revenue. By the loss size in 2019 a number of regional companies SAP is ahead of Russian "subsidiary". So, her largest legal person in the USA - SAP America – finished year at a loss in 781.5 million euros at revenue about 6 billion euros.

In 2019 concluded SAP CIS significantly less than direct government contracts with customers in comparison with the 2018th (a photo -

The reasons of losses in SAP CIS did not comment on TAdviser at the time of the publication of material. In the annual report the company ranks protectionist trade policy in such countries as Russia and China and also sanctions against economic, political, social and regulatory risks for itself.

In the same place it is noted that in the 3rd quarter 2019, in particular, the Russian economy showed the best results, than it was expected.

As of the middle of March of the 2020th financial results of SAP CIS in rubles for the previous reporting period are not published yet.

According to base " circuit.focus ", in 2019 the company concluded significantly less than direct government contracts with customers: only two against thirteen in 2018. The Sheremetyevo Airport and "ASE engineering company" became her clients according to direct government contracts. With the first the service agreement on development of target architecture of SAP systems about 11 million rubles, and with the second – on providing the perpetual licenses SAP software and service in its technical support for the amount about 110 million rubles was signed.

2018: Revenue of SAP CIS grew to 472.5 million euros

Revenue of division of SAP CIS in 2018 financial year which came to the end in December made 472.5 million euros, follows from the annual report of SAP published in February, 2019. In a year turnover grew up a little: in 2017 it made 468.4 million euros. The profit of SAP CIS at the same time made significant breakthrough: it grew more than by 2.5 times, to 23.1 million euros.

A little the number of staff of the company - from 826 increased to 837 people.

The Russian division of SAP carries to key subsidiary companies. Among all like those in 2018 SAP CIS took the 22nd place from 28 on total revenue and the 17th – on profit volume.

In 2018 at SAP CIS profit and revenue in euro (a photo - grew

Distribution of revenue of SAP CIS by product segments does not contain in the report. Earlier during a conference call of top managers of SAP with analysts according to the results of the 3rd quarter 2018 the chief financial officer of SAP Luka Muchich (Luka Mucic) noted high growth in sales of cloud services and services of support in EMEA region, pointing to special achievements in Russia and Germany in these segments.

Then Muchich said that in Russia in the 3rd quarter also steady growth of revenue from sales of the software was observed.

Among the largest government contracts of SAP CIS for 2018 – the agreement with Aeroflot on technical support services of 789 million rubles and the agreement with Sberbank on delivery of software of 120 million rubles, according to Contour-Focus service.

In the annual report SAP mentions Russia in the section of risks, speaking about trade sanctions and deterioration in the relations between Russia and the USA. At the same time, the company sees perspectives of an economic recovery in the country in 2019 and improvements of demand, but emphasizes dependence of a situation on prices of oil.


SAP CIS left a loss and increased revenue in rubles

Revenue of SAP CIS in 2017 grew by 26% to 32 billion rubles, follows from financial statements of the company published in July, 2018. The sales profit of the company in a year increased to 2 billion rubles from 65 million rubles, and the net profit of SAP CIS for last year was 382 million rubles against a loss the previous year.

The CEO of SAP CIS Natalya Parmenova explained sales growth in Russia in euro earlier with the fact that in the country now great demand for new technologies, clouds, predictive analytics, solutions on Internet of Things.

Implementation of these technologies changes business processes of the companies that does more demanded ERP systems of SAP of new generation, - Parmenova said.

Revenue and the profit of SAP CIS grew both in rubles, and in euro in 2017 (a photo -

She told that from the product point of view the main contribution to growth in sales of SAP CIS was made by cloud services, platforms SAP Leonardo and SAP S/4HANA. Growth of business was promoted also by development of an ecosystem of SAP CIS in Russia, a project startup on joint creation of innovations with partners, Natalya Parmenova told.

The contribution to growth of business was made also by the general paradigm shift – digital transformation in the companies. The Russian companies prepare scenarios, projects on use of modern digital technologies which want to implement.

In 2017 SAP CIS saved a tendency to the conclusion of direct contracts with big customers. From government contracts the largest it is possible to call transactions with the Russian Railway (volume – 720 million rubles), Aeroflot (566 million rubles), Rostelecom (435 million rubles, the framework agreement on resale of services), Sberbank of the Russian Federation (about 395 million rubles), MUEC (233 million rubles).

Among key customers of 2017 in SAP CIS also called Norilsk Nickel, NLMK, Evraz, MegaFon, Severstal, "KamAZ", UralChem, etc.

Growth of revenue on a third to 468.4 million euros and return to profit

In 2017 revenue of SAP CIS increased approximately by a third, having made 468.4 million euros. The Russian division of the German company returned to profit, having recorded it at the level of 8.71 million euros after payment of taxes. In 2016 losses in the amount of 5.5 million euros are received.

By the end of 2017 in SAP CIS 826 people against 793 worked the previous year.

As told TAdviser in SAP, Russia became the most active market in terms of revenue growth from cloud subscriptions and support which at all company jumped by 51% according to IFRS. Besides, in the Russian market two-digit growth in sales of the local software of SAP installed on computers of clients is registered.

Completed SAP CIS 2017 with growth of revenue on a third

In the 2017th became the 25th year of work of SAP in the Russian market. For that year SAP CIS started eight innovation laboratories in which joint work over new industry solutions is adjusted together with clients. Besides, the company announced plans to start the Center of digital leadership in Moscow for the purpose of development of an ecosystem and to open the first education centers where students will be able to be engaged in development of own projects with assistance of specialists of the company.

2017 will be remembered by SAP also the fact that the company transferred to the Russian data center a cloud platform for application development of SAP Cloud Platform (SCP) and cloud solutions of SAP Hybris for e-commerce, marketing and customer relationship management. In addition to them in the Russian cloud there are SAP Integrated Business Planning, SAP Learning applications, SAP SuccessFactors and SAP Hana Enterprise Cloud. From 2014 to 2017 SAP doubled the investment volume into development of data center in Moscow. The volume of investments of SAP in opening of the Russian DPC was 20 million euros.[1]

Two-digit growth of revenue from sales of software in Russia

Revenue from sales of the software of SAP in Russia in 2017 financial year showed two-digit growth rates. The chief financial officer of SAP Luka Muchich (Luka Mucic) reported about it during a conference call with top managers of the company and analysts at the end of January, 2018.

According to Muchich, in EMEA region two-digit growth rates of software revenue in addition to Russia showed also the Netherlands.

Russia - one of the markets in EMEA where sales of a SAP software grow most in high gear

The financial director of SAP also provided data that along with Germany and Spain Russia appeared among the countries in EMEA region where the highest growth was shown by sales of cloud services. The general growth of revenue from sales of cloud services in EMEA for 2017 was 48%, and from sales of cloud services and the software combined - 7%.

The Russian office SAP told TAdviser that in the 4th quarter 2017 transferred the platform for development of SAP Cloud Platform and a portfolio of SAP solutions Hybris to the Russian data processing center. Thanks to this event, according to representatives of the company, in the end of the year of sale of these services grew several times. Besides, demand of customers for a cloud service of SAP Hana Enterprise Cloud significantly increased, added to SAP CIS.

It should be noted that transfer of the solution is always a sales growth incentive as the products, most relevant for this market, are transferred to local data processing centers. For example, thanks to SAP solutions of Hybris our Russian clients will be able to move to a new level of digital marketing at the expense of the personalized customer interaction, creation of the systems of active sales and the analysis of a consumer behavior on social networks. And on the cloud SAP Cloud Platform platform solutions using the latest technologies in the field of Internet of Things, a blockchain, machine learning, analytics of Big Data, information security, etc. will be created, - told TAdviser in SAP CIS.

Among the largest direct contracts of SAP CIS in 2017 - the transaction with the Russian Railway on providing licenses softwares for the amount of 720 million rubles, with Rostelecom for the amount of 435 million rubles on rendering cloud services for the subsequent providing to end users on terms of subscription and with Sberbank for the amount about 395 million rubles on providing a subscription to a cloud service of SAP Ariba.

Three-digit growth in sales of software in Russia in the 2nd quarter

Revenue from sales of the software of SAP in Russia in the 2nd financial quarter 2017 showed three-digit growth rates. The chief financial officer of SAP Luka Muchich (Luka Mucic) reported about it during the conference call with top managers of the company and analysts devoted to quarter results. SAP, as a rule, provides comparison of financial results in the reports brings year-on-year as a percentage.

Globally revenue of SAP from cloud subscriptions and support grew by 29% year-on-year

According to Muchich, along with Germany, Russia appeared ahead of all in EMEA region on growth rates of revenue from cloud subscriptions and support. In general on the region this segment of business of SAP grew by 48%, the chief financial officer reported.

Globally in the 2nd quarter 2017 revenue of SAP from cloud subscriptions and support grew by 29% year-on-year, and from sales of the software - for 5%.

SAP CIS confirmed to TAdviser that in the 2nd quarter such growth rates about which the chief financial officer of the company speaks took place, but decided not to answer the specifying questions.

In SAP CIS told about high growth rates of sales of cloud services both in 2015, and in 2016. Among cloud applicaions on which the greatest demand in Russia was observed in the company in 2016 called, for example, the solution for management of personnel resources of SuccessFactors (it in the company was called "a hit of sales" in Russia).


Growth of revenue in rubles - 11%

Revenue of the Russian representative office of SAP (SAP SNG) in rubles in 2016 grew by 11%, the CEO of the company Pavel Gontarev at a press conference in April, 2016 reported.

In a product section one of key drivers of growth of business of SAP CIS became cloud services — their sales, by data Hontareva, grew by 153%. SAP CIS develops sales of cloud services from local DPC in Moscow, based on the platform Rostelecom. From it to clients solutions are available SuccessFactors Ariba Hana Enterprise Cloud, SAP IBP (Integrated Business Planning).

For 2017 the company is also going to unroll in DPC the line of the solutions Customer Engagement & Commerce including products for omnichannel customer interaction and management of work with them, automation of programs of loyalty and management of service maintenance, automation of outlets of retail networks, etc. Also from a cloud the platform should become available to development of SAP Cloud Platform.

The CEO of SAP CIS told TAdviser that from the product point of view in addition to clouds the general growth of turnover of the company was promoted, for example, by demand for solutions based on the SAP Hana platform and products for e-commerce and omnichannel.

In a year the company had 74 new clients, their considerable part — the organizations of a segment of medium and small business. In a vertical section more than 70% of the industries in which SAP CIS works showed growth, Gontarev provided data.

Pavel Gontarev expects growth of ruble revenue and in 2017 (A photo source -

Earlier, in March, TAdviser with reference to the annual report of SAP wrote that revenue of SAP CIS in euro in 2016 remained practically at the same level, as in 2015, at the same time the company in euro suffered losses (see in the history below). At an April press conference representatives of SAP CIS laconically answered about it. Pavel Gontarev noted that data on their company in the global report of SAP are based on local accounting records and that the Russian office is quite happy with the result achieved in Russia.

TAdviser also wrote earlier that in 2016 the number of staff of SAP CIS - from 659 significantly increased to 793 people. Pavel Gontarev explained TAdviser that expansion of the state first of all happened due to increase in number of staff of service of industry expertize: experts in use of technologies of SAP in the different industries enter it. Also the company employed people who are engaged prodvizheny and to sales of clouds.

Pavel Gontarev preferred not to give the forecast for dynamics of turnover of SAP CIS in digits for 2017. At the same time, he told TAdviser that in 2017 at the company "feelings from the market good".

The market, in our opinion, should grow this year, and we expect growth of ruble revenue again. The cloud direction will continue to grow, it is undoubted. Also sales of SAP S/4Hana will grow. Also will show growth of technology of Internet of Things and machine learning, but in this case is growth from low base as these directions for us in the Russian market new, - Gontarev in a conversation with Tadviser noted.

Concerning the last the CEO of SAP CIS meant new solution portfolios which the company brings to the Russian market in 2017: SAP Leonardo - for Internet of Things and SAP CLEA – a solution package on machine learning technologies. Pavel Gontarev reported about it at a press conference too.

In addition, in SAP CIS told that in 2015-2016 SAP invested in localization, adaptation to the Russian legislation and joint innovations with clients more than 18 million euros. SAP conducts work on localization together with the biggest customers, partners and state structures, including — FTS and the Social Insurance Fund.

In addition to results of activity in 2016 in SAP CIS announced paradigm shift in which the company, and the related strategic objective till 2020 works: be transformed from the supplier of business applications to "the partner in innovations" for all the ecosystem. For this SAP develops such format of partnership as development of joint solutions.

Among steps on the way to this purpose - development of joint solutions together with Rostec and NCI, creation of laboratory of joint innovations with NLMK, development of solutions on security for Internet of Things with Kaspersky Lab, integration of API of Yandex.Maps into the SAP solution Transportation Management.

Losses in euro 5.5 million euros

Revenue of division of SAP CIS (SAP CIS) in 2016 made 355.7 million euros, follows from the annual report of SAP published in March. On weighted average rate of euro for 2016 it is about 26.5 billion rubles.

Turnover of the company remained practically at the previous level, as the previous year: in 2015 it made about 356.5 million euros.

As well as the previous year it was SAP CIS at a loss – after a deduction of taxes it made about 5.5 million euros. The loss appeared significantly less, than in 2015: then the company went to minus for 18.6 million euros.

In 2016 the number of staff of SAP CIS - from 659 significantly increased to 793 people.

In 2016 continued to work as SAP CIS with customers directly. Among the largest direct transactions – the service contract with Sberbank a capacity more than 1.5 billion rubles. SAP CIS also performed for Sberbank works on migration on SAP ERP on the platform HANA on the agreement for the amount over 80 million rubles.

Among other large direct contracts – services in support and development of a management system of Aeroflot of 453 million rubles, rendering maintenance services of software in "MUEC" for the amount more than 233 million rubles, access to cloud services of data processing for ALROSA to the amount about 126 million rubles, etc.

С марта 2016 года SAP СНГ руководит Pavel Gontarev

From large partner implementation projects and support of SAP solutions it is possible to give creation of a project management system of capital construction based on SAP solutions in Atomenergoproekt for the amount of 860 million rubles, maintenance services of information systems of SAP in Rosneft for the amount over 750 million rubles. The delivery contract of the licenses SAP software for 2.2 billion rubles in 2016 was signed by Gazprom with "daughter" Gazprom transgaz Yugorsk for whom they are intended.

In SAP CIS at the time of the publication of material could not comment on the results of the activity for 2016 specified in the global report.

It seems to me that after devaluation of ruble the Russian market "it is rather stable". From this point of view everything is correct. Reduction of a loss is quite explainable fight for efficiency too. So the result is quite good, but also is not too good, - Sergey Matsotsky, the chairman of the board of IBS estimated in a conversation with TAdviser financial results of activity of SAP CIS. - The economic situation is rather favorable for SAP, but if real import substitution occurs, it can worsen.

In 2016 in Russia there were signs of economic recovery, but in general the nature of development remained slightly negative, said in the annual report of SAP. The sanctions existing for the country are mentioned in it as one of the factors which are negatively affecting the market.

In global turnover of SAP about 1.6% are the share of SAP CIS. In addition to Russia SAP CIS supervises 10 more countries: Kazakhstan, Azerbaijan, Belarus, Ukraine, Uzbekistan, Turkmenistan, Kyrgyzstan, Georgia, Armenia and Tajikistan. Kazakhstan and Ukraine at the same time have separate legal entities which appear in the global reporting, but in 2015 and 2016 revenue of SAP on them was not specified. Revenue from the CIS countries where the company has no offices, does not join in the reporting of the Russian office.

Russia is among the main generators of turnover for SAP in EMEA. In this region about 30% of annual revenues in 2016 were the share of Germany. The remained revenue was generated, mainly, by France, Italy, the Netherlands, Russia, Switzerland and Great Britain, said in the report of SAP.

From 24 divisions which SAP selects in the annual report as the main the Russian office on revenue is in 21 place and in the 18th place on number of employees. From regional divisions in 2016, as well as earlier, the office SAP had the biggest turnover in the USA – about 4.9 billion euros. It had also the most heavy loss – 328 million euros which, however, in a year was reduced. In addition to the USA regional branches with the largest turnover, over 1 billion euros, include SAP Deutschland, SAP France and SAP UK.

Share in the market of ERP systems of Russia

In 2016 among the leading suppliers of information management systems the enterprise (ERP, etc.) SAP wins first place from shares of 49% in the Russian market. On the second place there is 1C there is SAP from shares in 32.9%. Microsoft has 8.8%, Oracle has 4%, Galaktika has 2.2%. 3.2% are the share of other players.

Shares of suppliers in the Russian ERP/ISUP market on sales volumes in US dollars in 2003-2016, %


Falling of revenue to 356.5 million euros, loss of 18.6 million euros

In 2015 revenue of the Russian division of SAP (SAP SNG) was reduced by 4% - from 371.6 million euros to 356.5 million euros, follows from the annual report of the company published in March. The company at the same time suffered a loss: its loss considered after a deduction of taxes made 18.6 million euros. Number of staff of SAP CIS by the end of the year was 659 people, having reduced by 86 employees.

Aggregate turnover of SAP at the end of year was 20.793 billion euros. Thus, the share of SAP CIS in total sales of the company made about 1.71%.

At the same time, in May, 2016 it became known that at the end of 2015 total sales of partners of SAP grew by record 84% in comparison with 2014, and the total number of the companies which signed the partnership agreement with SAP CIS increased by 35%. The number of partners in S4HANA – increased by 75%, according to Cloud-solutions – for 225%. The program of training of consultants "20-15" in six years allowed to double an ecosystem, thus, in training center 20 thousand SAP consultants in Russia and the CIS were trained.

In the annual report with reference to world analysts it is noted that the low prices of oil, weakening of the position of ruble and economic sanctions had a negative impact on the Russian IT market: its falling is estimated approximately at 15%. In the same place expectations of analysts are given that indicators of expenses on IT in Russia can improve in 2016 and grow approximately by 6% as a result of the short-term stimulating measures from the state.

From 23 SAP branches which the company selects as the main in the annual report Russia is in the 22nd place on total revenue and in the 19th place on number of employees. Most of all revenue in 2015 was generated by division of SAP America in the USA - more than 4.5 billion euros. However, it was also the most unprofitable, having gone to minus for 402.3 million euros. Other branches with the largest sales volumes - SAP Deutschland, SAP France. The most numerous state at the company - 6.11 thousand employees - in the American division. The biggest number of staff - in the American division. There about 7.2 thousand people work.

Financial results of divisions of SAP in the report for 2015, unlike the previous report, are not given in other CIS countries.

Indicators of activity of the main divisions of SAP for 2015

SAP CIS told TAdviser that in general are happy financial to results in Russia and the CIS countries. The "accounting" loss on legal entity SAP CIS LLC reflected in the global reporting in the company explained TAdviser, on the one hand, with features of accounting and accounting policy of SAP CIS, and on the other hand - influence the continuing investments into Russia and the CIS countries. From investment capacious projects of last year in SAP CIS note costs on opening of data centers, development of an ecosystem and personnel potential and localization of products.

The company reminded that globally SAP is also happy with results of work of the Russian division: "We consider that SAP showed strong results in Russia, and we are glad that we will continue activity in this market", - the president of SAP concerning customer service worldwide, the board member of SAP SE Rob Ensslin reported.

Earlier in March Rolf Schumann, CTO SAP in the region EMEA&MEE, noted in a conversation with TAdviser that he estimates result of 2015 in Russia in comparison with previous year as rather stable: "The economic and political situation in Russia remains difficult, but on this background it is possible to call our business in Russia stable. Of course, SAP could show the best result if not external difficult circumstances".

Schuman also noted that against the background of crisis in the country customers significantly reduced the number of the innovation projects which was much in the different industries still just two years ago: "Now it is difficult to expect that, for example, the oil and gas companies will be equipped in addition with sensors and to implement the newest scenarios of Internet of Things. The companies speak about interest in innovations, but budgets for these purposes are postponed until the best times". At the same time, customers continue to invest in the projects aimed at support of key business processes, he added.

According to Rolf Schuman, for the period of crisis in Russia SAP has no special strategy, however the company began to show more flexibility and adaptivity here, having made them a part of the basic processes. So, for example, in deliveries which can be complicated because of sanctions the company in each case watches what ways of solving the problem can be. It also told TAdviser that SAP discusses with a number of the Russian partners how to combine the software with their products that as a part of partner solutions it could enter the register of the Russian software.

The chairman of the board of IBS companySergey Matsotsky in a conversation with TAdviser said that decline of revenue by only several percent in euro against the background of the situation which developed in Russia can be considered excellent result. According to him, it is difficult to find the large company in Russia which would finish result with similar dynamics in euro. According to Matsotsky, a loss in such companies as SAP is very subjective question, especially if to judge by the certain country.

Increase in a share in the market of ERP up to 48.9% at sales for $312 million

According to IDC, the size of the market of the software of information management systems in Russia at the end of 2015 in dollar expression was reduced by the enterprise (ERP, ISUP software) by 30.6%, in ruble — grew by 10.5%. In dollar expression market size was $639.5 million.

In top five of suppliers of ERP systems of changes did not occur, but shares were a little redistributed. Market leaders — the companies SAP and "1C" — improved the positions.

SAP increased a share from 48.4% in 2014 to 48.9% in 2015,

1C — from 30.9% to 32.7%.

Shares of Oracle and Microsoft were reduced, Oracle — from 4.9% to 4.4%, Microsoft — from 9.4% to 8.7%.

The share of Galaktika remained on a mark of 2.1%. The share of other vendors was reduced from 4.3% to 3.3%.

Revenue from direct government contracts of SAP in Russia grew by 17 times

In 2015 the number and volume of government contracts which SAP CIS (SAP CIS LLC) concluded with state companies and organizations directly considerably grew. According to the base " circuit.focus " accumulating open data on state procurements, total amount of the government contracts concluded with SAP CIS for this period made more than 3.5 billion rubles. In 2014 SAP CIS concluded government contracts for the amount about 190 million rubles plus the contract for 172 thousand euros (about 11.56 million rubles on weighted average rate of euro). Thus, the volume of prisoners directly of government contracts for SAP CIS increased approximately by 17 times.

The main part of contracts was signed with the customers working in oil and gas, power, financial sectors. Contracts with Rosneftfor 704 million rubles (the supplementary agreement on maintenance of the SAP Product Support for Large Enterprises level),Sberbankfor 456 million rubles (services in audit and optimization of systems by preparation of the productive systems for commercial operation within the strategic program "Implementation of ERP") and Rostelecomfor 435 million rubles (rendering cloud services for providing to end customers on terms of subscription) became the largest direct transactions for SAP CIS in 2015.

File:SAP Locations Walldorf.jpg
The volume of direct contracts of SAP CIS with the Russian state companies and organizations in 2015 grew to 3.5 billion rubles in comparison with about 200 million rubles in 2014

In 2016 SAP CIS continued to conclude direct bargains such. For example, the company signed the agreement with Aerofloton services in support and development of the information management system on the basis of a SAP software of 453 million rubles.The contract for the amount of 71 million rubles for delivery and maintenance of a SAP software was signed with "The Krasnoyarsk plant of non-ferrous metals of V.N. Gulidov",for the amount of 49 million rubles on rendering implementation services of SAP ERP regarding production management – with RT-Inform company.

In 2014 " circuit.focus ", contracts with Sberbank for 105 million rubles became the largest direct transactions in the considered segment for SAP CIS, by data (works on AS "A management system for corporate credit limits" ("Credit limits"), Greenatomfor 25 million rubles (consulting services in training of users of a SAP software)Tyumenenergofor 23.9 million rubles (delivery of software and maintenance).

In SAP CIS refused to comment on dynamics according to direct government contracts. Respondents of TAdviser representatives of the largest outsourcers of support of SAP solutions confirm the mentioned trend.

Natalya Tatarnikova, the leader of the division of end-to-end information systems and information security of Atrinity company (enters into the Asteros group), notes that if to speak about deliveries of software licenses, then she and acted earlier as SAP CIS as the general contractor and the contractor, attracting integrators to projects already within subcontracting. In the conditions of reduction of the markets this trend only amplified, besides big customers aim to build the work with vendors directly, she says.

It gives the chance to receive the maximum discount at the developer and to integrate the best world practices and successful experience of implementation of systems, to create new approaches to business process management, including – based on new products on examination at which Russian companies can be limited, the representative of Atrinity argues.

Imposition of restrictions on purchase of foreign software could be one more factor of demand growth from a public sector, according to her, that partly created additional demand for the accelerated implementing solutions.

It is confirmed by data of analysts of IDC who claim that total sales of SAP in the Russian market grew almost by 12% to 19.2 billion rubles. Potential of further growth is also high: SAP – one of the few vendors which is ready to invest in full localization of the products and development of specific industry solutions for large state corporations in a format of the joint venture (Gazprom,the Russian Railway). In the long term 3-5 years it, certainly, will provide if not the strong financial growth, then stability in respect of revenue and the customer base, - Tatarnikova considers.

She added that some vendors gravitate to rectification of deliveries without participation of integrators. Especially it became noticeable last year when the unstable economic situation forced "tighten belts" all IT market. In the conditions of austerity of IT budgets customers became more exacting to the choice of service provider, competences of consultants, project deliverables, the expert argues. At the same time direct contracting not always means work only of own consultants of vendor.

Examination of integrators within some projects can be unique and therefore also actively is attracted. It is the classical approach providing to the developer control of a margin and project management, and to the customer – a guarantee of result and high-quality technical support, - the representative of Atrinity notes.

The representative of other large partner of SAP which preferred to remain unnamed, considers that legislative initiatives on import substitution urged on demand for SAP solutions in 2015. Initially they covered a public sector, but it is about extending initiatives and to state companies. Until import substitution started working to the full extent, the customers from these categories interested in development of the systems based on SAP aim to seize the opportunity to buy necessary for software, the interlocutor of TAdviser considers.

At the same time, buying software and services in very large volumes, such customers, as a rule, want to receive special price conditions. According to the same source, for similar cases the German vendor has such concept as "exception" (an exception of the price list). In each separate case of "exception" it is necessary to approve with the German office SAP. Settle exclusive terms and receive them more simply and quicker if to sign the direct contract with vendor, without participation of the third parties, notes a source.

According to the interlocutor of TAdviser the tendency to increase in direct transactions of SAP can be explained also with desire of the Russian division to improve the financial performance against the background of a difficult economic situation. Large contracts improve a picture, and it is more profitable to vendor to conclude them directly, without paying the commission to partners, the representative of the partner of SAP argues.

2014: Falling of revenue from 445 million euros to 371.6 million euros

According to the report of SAP published in March, 2015 for 2014 revenue of the Russian division of the company (SAP CIS) was reduced approximately by 16.5%, from 445 million euros to 371.6 million euros. Its profit considered after a deduction of taxes at the same time grew from 14.2 million euros to 19.2 million euros. Almost on 90 people in a year the staff of the company - up to 745 employees was cut down.

Significant growth of turnover in 2014 in Russia was shown by division of development of SAP Labs – from 9.65 million euros in 2013 to 23.2 million euros, however at the same time proved to be unprofitable, having gone to minus for 1.15 million euros. Unprofitable was also a direction of business of e-commerce of SAP: the Russian division of Hybris suffered a loss for 79 thousand euros while in 2013 showed small profit. At the same time Hybris revenue in a year grew from 290 thousand euros to 1.9 million euros.

The division of SAP Ukraine submitting to SAP CIS showed negative indicators of profit and in 2013, and in 2014 the situation was only aggravated: revenue of the company in this market was reduced from 35.4 million euros to 27.7 million euros, and the loss grew from 1 million euros to 3.9 million euros. The company and in Kazakhstan worsened financial performance, the loss of SAP Kazakhstan which is also submitting to Russian grew from 1.1 million euros to 1.3 million euros, and revenue fell to 18.8 million euros from 20.2 million euros.

Respondents of TAdviser partners of SAP in Russia consider natural decrease in revenue of vendor against the background of the developed economic situation

The report of SAP sends to an adverse economic situation in Russia which developed by 2014 and its influence on the Russian IT market in general: "The amplifying conflict in Ukraine, the international sanctions and the falling prices on oil in total slowed down growth of the Russian economy, especially in the second half of year". With reference to analytics of IDC in the document it is noted that the Ukrainian crisis had a noticeable impact on all IT market in Central and Eastern Europe where it appeared on the verge of stagnation. In Russia the general growth of IT market was only 0.1%, data are provided in the report.

The chairman of the board of IBS companySergey Matsotsky believes that in falling of revenue of SAP there is nothing surprising, in view of the economic situation which developed in the country. Moreover, with its accounting the indicators reached SAP look good even, he noted in a conversation with TAdviser. Sergey Matsotsky does not exclude that at the end of 2015 falling of turnover of the company in Russia can be even higher.

The president of CORUS Consulting GroupAlexander Semyonov in a conversation with TAdviser noted that in 2014 revenue fell in Russia at many IT vendors counting the turnover in euro and dollars. It is quite natural and expected, considering the economic situation which developed last year and rate fluctuations of currencies. If indicators are much better to count revenue of SAP in rubles, perhaps, he assumed.

"Profit increase of SAP against the background of adverse economy says that the company is capable to manage effectively costs in the conditions of crisis. In my opinion, SAP CIS was succeeded to gather an excellent team both from the point of view of management, and in terms of sales. As for the last, I would call it one of the strongest and effective sellers in the market", - Alexander Semyonov told.

Asteros is also not inclined to dramatize reduction of revenue of SAP in Russia. Owing to the difficult economic country situation which caused reduction consumer activities, suspension of financing or at all freezing of budgets, IT market volume in Russia was reduced. The imposed sanctions against a number of the companies, forced business to review the strategy, but in Asteros do not consider it a signal to decrease in interest in products of SAP, the representative of the company noted in a conversation with TAdviser.

"There is no full-function replacement of SAP in the Russian market at the moment, - consider in Asteros, - Aiming to save the positions, SAP does absolutely correct actions on an output of new cases to the market in the Russian Federation taking into account the developed geopolitical situation. Business, in turn, looks for opportunities for ensuring steady work for action of trade restrictions. These are the steps towards following from sober assessment of the current situation and forecasting of possible scenarios of succession of events".

The director of directorate of corporate systems of management of the ITSCTimur Borodulin expressed to TAdviser opinion that the market of SAP solutions is characterized by high degree of a maturity of customers, the stage when SAP solutions were implemented for the sake of the maximum covering of processes is already passed. In conditions on the one hand - deficit of means, on the other hand – understanding by customers of the requirements, implementation projects of separate products, often the innovation, but which give the maximum effect for business began to prevail, he believes.

Later, in April, 2015, in the Russian representative office of SAP commented on TAdviser the local financial performance reflected in the global report for last year. SAP CIS said, in particular, that these digits are accounting and, according to the company, it is not absolutely correct to operate with them.

The CEO of the Russian representative office of SAP Vyacheslav Orekhov told that in 2014 at SAP in Russia the number of new projects and while on global accounting records there was a reduction of revenue considerably grew, upon in rubles took place it small, but growth.

CEO of SAP CIS Vyacheslav Orekhov

Orekhov specified that it was affected by several factors. One of them, for example, consists that contracts which are signed by forces of the Russian representative office with partners in OEM model are not considered in local turnover as legally they consist directly with any of the European representative offices.

Besides, for example, SAP set a fixed rate of euro in 53.5 rub for which the Russian clients pay services of support of software. In rubles this direction showed growth while in recalculation in euro at an annual average rate there was a decrease in turnover. A considerable part of turnover of the company in Russia therefore they had an impact and on the general result reflected in global accounting records is the share of services of support added to SAP CIS.

2013: Revenue of 445.1 million euros (+10%)

In 2013 revenue of the German producer of ERP systems of SAP in the CIS (without Kazakhstan and Ukraine) made 445.1 million euros, follows from documents of the company. In 2012 this indicator reached 402.8 million euros. Thus, in a year sales growth was at the level of 10%. Cumulative sales at the Moscow office, in Kazakhstan and in Ukraine exceeded 500 million euros. Profit (profit after Tax) in 2013 was slightly lower than an indicator of 2012 - 14.2 million against 16.6 million euros.

At the end of 2013 in SAP CIS 834 employees worked. In a year their number grew by 85 people.

In addition, the fact that the Russian ruble for 2013 considerably fell in price in relation to euro affected dynamics.

In Russia the division of SAP Labs CIS also works (is engaged in software development). Its revenue in 2013 made 9.6 million euros (393 thousand – in 2012), profit – 38 thousand euros (12 thousand), the number of employees – 114 people (5).

Besides, SAP consolidates indicators of the developer of solutions for e-commerce of Hybris Software purchased in the summer of 2013 in the reporting now. In Russia sales to this company for 2013 made 290 thousand euros, profit – 11 thousand euros.

Separately SAP considers activity indicators in Kazakhstan and in Ukraine. These divisions are not the first year unprofitable, in 2013 in each of them the company lost 1 million euros (in a year losses increased approximately three times).

At the same time the Ukrainian division increased sales from 28.3 million euros in 2012 to 35.4 million euros in 2013, and revenue of SAP Kazakhstan in 2013 was reduced from 27.7 million euros in 2012 to 20.2 million euros in[2].

In total income of SAP CIS first place is won by the sector of the enterprises of the oil and gas industry, the second place – power industry, the third – mining and metallurgical complex. On growth rates the public sector in 2013 grew by 228%, transport – for 162% (investments into projects for the enterprises of this sector were made in 2012); power industry – for 50%.

The SAP company traditionally works at many vertical markets. In 2013 one more vertical – support of sport was added to quite extensive list. Now the SAP HANA technology is used by McLaren Group company (sports races), the National Basketball Association of NBA (North America), Race Across Russia company – the organizer of a two-week bicycle race across Russia.

The partner ecosystem of SAP in the territory of Russia and the CIS continues to become stronger. It includes more than 12 thousand consultants. In comparison with 2012 sales of partners grew by 40%. The share of partner business in total sales of SAP CIS makes about 35%. Three times sales of partners in the OEM model grew. For 16% the number of partners in classical SAP solutions, grew by 73% - the number of partners in the innovative solutions of the company.

In plans of SAP CIS - to develop "cloud" technologies is a basis of technology strategy of the company. It is planned to create and put on the market the "cloud" CRM and HR model. As "cloud" service there will be HANA. Specialists of the company intend to assist the customers in migration of the ERP systems which are available for them on the HANA platform.

2012: Growth of revenue by 14%

In the middle of February, 2013 the SAP CIS summed up the work results in the region for the previous financial year. The company announced cumulative growth of income by 14.2%, sales of software (plus 14.8% in annual comparison) and services in a customer support (17.2%) became the most quickly growing directions among other.

In 2013 the company intends to become more active beyond the Russian limits and to systematically increase presence in Kazakhstan, Ukraine and Belarus and also to increase an ecosystem, the CEO of SAP CISVitaly Postolaty noted.

[[Image:Erpshares.jpg‎‎‎|840px|center|frame|Доли крупнейших игроков российского рынка ERP- systems, 2003-2012[3]]

In 2012 the industrial directions of business of SAP significantly developed in the CIS. So, almost for 30% it was succeeded to increase sales of software solutions in an oil and gas sector, for 15.8% - in chemical industry, and in the discrete and transport industries for 207.9% and 123% respectively.

In 2012 on SAP solutions demand from the fast-growing companies increased, and from year to year the share of these companies in structure of the customer base of SAP constantly grows. Sales of SAP solutions in this segment grew approximately by 40% in comparison with results of 2011. About a half of the bargains concluded in 2012 belong to a segment of the fast-growing companies (157 of 312).

Opening of own development center of SAP Labs where, for example, together with customers from the oil and gas industry the concept of "the electronic field" which will allow them to increase efficiency of operating activities of the oil and gas companies is developed became an important initiative of 2012 for SAP CIS. Work and on other tasks, for example, of management of transport transportations is conducted.

As for development of a partner network, the volume of business of the company through partners increased by 49.5% including the triple growth of their indicators in Ukraine and Belarus and 30% jump in Kazakhstan. In 2012 20 partner companies at least doubled the business. By the end of 2012 the partner ecosystem totaled about 10 thousand consultants. In 2013 it is going to prepare in addition nearly 2.5 thousand more, and by the end of 2015 to bring the number of consultants in a partner ecosystem to record 20 thousand.


Growth of revenue in the 3rd apartment for 60%

The Russian revenue of SAP grew in the III quarter 2011 besides to the period of 2010 by 60%, including income from sale of software — for 100%, told Vedomosti[4] the Deputy CEO of representative office of SAP in Russia and the CIS Vyacheslav Orekhov. 65-68% of income are the share of sale of software, he specified, but did not call absolute measures. Revenue of SAP around the world grew in the III quarter 2011 by 14% to 3.4 billion euros.

In 2010 all Russian market of the integrated management systems for the enterprises (ERP) made, according to IDC, $649.4 million (+31.9% by 2009), and SAP (50.5%) had the first place. In total — taking into account income from services, training, etc. — SAP earned in Russia in 2010 about $400 million, told a source, close to it.

Orekhov explains rapid growth in the III quarter with the beginning of sales in Russia of the innovation products (the mobile applications allowing to monitor business remotely, cloud services) and also implementation of the technology many times accelerating data processing. Also SAP signed a number of large contracts — in particular, about deliveries of software to Sberbank. From all transactions with the Russian banks this is record for SAP, Orekhov told.

Transaction amount — about $36 million, tells the source close to one of its parties. Perhaps, exactly thanks to Sberbank the Russian SAP showed such gain in the III quarter, the representative of one of her competitors assumes.

Sales of SAP products through group of Technoserv IT companies grew in the III quarter 2011 by 30%, the representative Ekaterina Andreyeva says ee; the main sales fell on the financial sector and the extracting industries. At IBS sales of implementation services of SAP will grow this year by 30-35%, and in 2012 growth can be up to 40%, the CEO of IBS Sergey Matsotsky predicts. But IBS does not trade in software licenses, it pays attention, and business of the IT consultant develops more evenly.

The main Russian competitor of SAP — 1C: in the Russian market of ERP in 2010 IDC estimated its share at 26%. Its system "1C:Enterprise 8" is focused on mass market therefore its sales not so strongly depend on separate large contracts and are more evenly distributed on the periods, the representative of 1C Alexey Kharitonov says. For the first nine months 2011 revenue from sales of this system in dollars exceeded the level of the same period of 2010 for 78.7%, he told.

Structure of revenue on the CIS countries

Revenue of SAP subsidiary companies in the CIS according to IFRS (one million euros)

SAP CIS| align="left"|, Moscow
2008 2009 2010 2011*
232,3 197,6 278,5 343,3
SAP Ukraine 19 8,9 13,3 20,3
SAP Kazakhstan 8,6 7,2 12,3 39
Total 259,9 213,7 304,1 402,6

Source: the reporting of SAP AG, (*) – calculated values

2010: The contract with Gazprom, growth of turnover by 53%, sales of software for 84%

2010 became record for SAP in Russia. Turnover of its Russian division grew by 53%, including of sale of software — for 84%. One of the reasons — the large contract with Gazprom, participants of the market[5] consider[6].

By estimates of IDC, at the end of 2010 SAP is the leader of the Russian market of business solutions from shares in 50.5%.

In 2009 the CEO of SAP CIS Vladislav Martynov promised that turnover of the company in Russia (cost of all signed contracts) will add 30% in a year. In practice growth of turnover (in euro, taking into account sales through partners) was 53%, and in a segment of sales of software — 84%. Big investments into IT made Gazprom, Rosatom, Sberbank, Aeroflot, Rosneft, Severstal, Tatneft, shopping Mall Megapolis. There were also new clients — for example, in a public sector (where turnover of SAP grew in a year by 250%) and among banks (+370%). Their deposit to turnover of SAP CIS was 17% in 2010.

Martynov did not call absolute measures, but noted: at the end of 2010 the Russian division is considered the most successful in SAP, and on a contribution to total sales of corporation it took the 5th place in the world (after the USA, Germany, Great Britain and Brazil) and the 3rd in Europe. The Russian division of SAP reached the highest position in the III quarter 2006 — No. 3 in the world.

Perhaps, SAP overtook the market thanks to the contract with Gazprom for a period of five years, the employee of one of competitors of SAP suspects. By estimates of managers of two IT companies, the volume of this contract is close to 100 million euros. Single projects with very big customers and also growth in sales of CRM and a business intelligence could be factors of growth of SAP, the analyst of IDC Pyotr Gorodetsky adds. Even without the contract with Gazprom growth in sales of software impressive — 35%, Martynov answers.

49% were made by a share of ERP systems in turnover of SAP from sale of software in Russia in 2010. Still it always exceeded 50% – in particular, in 2009 made 64%. Last year 51% of turnover fell on other solutions – CRM, personnel management systems, a business intelligence, control systems for regulatory risks, etc.

Transformation of business of SAP CIS and growth in the crisis market due to expansion of presence at a financial and public sector and among the small and medium enterprises was one of the objects set by SAP for the Russian office in the fall of 2009 (when it was headed by Martynov). In 2010 sales of SAP in a segment of the small and medium companies increased by 69.8%, Martynov says, in 2010 they provided 11% of turnover in Russia. He explains it with more active connection of partners — system integrators which share in sales of a SAP software grew in a year from 20 to 30%. In addition SAP performed with a number of marketing initiatives: entered more flexible model of licensing, the fixed prices on products and their implementation, began to offer free of charge potential clients calculation of cost efficiency from implementation of the software, to advance a business intelligence more actively. "Now on sales in a segment of the Russian small and medium business we are comparable to Microsoft" — Martynov considers. At the end of 2010 Microsoft considerably — for 73% — reduced the recommended retail price for the ERP system of Microsoft Dynamics NAV for small and medium business.

In 2009 ratios of direct and partner sales made 80% and 20%, in 2010 70% were already the share of direct sales, and the share of partner sales grew to 30% of the overall level. Growth of a share of revenue from sales of solutions for medium and small business in 2010 was 69%. The number of the bargains of 2010 concluded through partners grew by 68%. The SAP company considers important to work on that the partner ecosystem developed is balanced, as in terms of a regional scope, and partner competences. In 2010 the total quantity of the partners of SAP CIS specializing in implementation of classical ERP solutions increased by 52% and reached 97. The number of partners in solutions in the field of a business intelligence grew by 104% and was 67 companies. In 2010 SAP CIS had 49 new partners, a half of whom works in regions of Russia. 80% of projects on implementing solutions of SAP in Rossi and the CIS are performed by resources of partners of the company.

In 2010 the most fast-growing sector for SAP in Russia (as well as in EMEA) became power (the vendor integrates the companies energy-generating, sales, etc. in the Utilities group), the vice president of SAP EMEA Maher Chebbo told CNews. At the company two architecture of Utilities – for regulated (as until recently in Russia) and liberalized (as now) the electricity markets are developed. It is interesting what for customers from this industry of software for energy management grew twice quicker than sales classical for SAP systems. Mean enterprise management (ERP), company assets (EAM) and customer relations (CRM). According to Chebbo, now software of the class EDM (Energy Data Management) and AMI (Advanced Metering Infrastructure) creates already about a quarter of revenue of total sales to the Russian customers. On as much it is necessary on the existing and already listed ERP, EAM and CRM long ago. Dynamics of sales of EDM and AMI in the next years will remain, Chebbo considers. While similar solutions at different stages are implemented only by power engineering specialists of the Belgorod and Samara regions, he says. 'I see interest in Russia in the power networks allowing to consider and save the electric power. Power engineering specialists begin projects with software, classical for us, and then reach EDM and AMI. We already work on this subject in Belgorod where licenses are purchased and also with Samaraenergo where 'smart counters' and software for work with them are planned for the future after implementation of the main traditional modules'.

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