Shares of SAP SE rose today as the company reported higher business-software sales at the Germany-based company, which employs 3,000 at its U.S. headquarters in Newtown Square. SAP statement here.
"Clearly the company is investing for growth at the moment," said analyst Adam Wood of Morgan Stanley at SAP's year-end conference call with investors. He asked CEO Bill McDermott if the company is going to keep investing, or build more R&D centers, or fund more M&A deals — or collect more profits from past cloud investments, this year.
"We continue to invest in data center consolidation," said CEO Bill McDermott. "Extraordinary investments in our cloud delivery business will come to an end. And then, as of 2018, we expect to see the leverage from these efficiency-based investments in a much higher progress of the cloud gross margins" and higher profits.
"In terms of the head count growth," SAP, which employs 80,000 worldwide, hired sales and marketing people aggressively earlier in 2016 — but in the fourth quarter hired most of its 1,700 net new fulltimers into "R&D and in the cloud delivery operations."
2017, McDermott reiterated, " will be another year of investment," with expenses flattening and profits rising "in the year 2018 and going forward."