German newspaper Frankfurter Allgemeine Zeitung has reported that SAP CEO Bill McDermot aims to double the SAP market value, up to 300 billion Euros, by 2023.
Following announcements of a restructuring plan in January, several high profile executives have left their roles, including Robert Enslin. Despite the departures and a 5% drop in share price this week, Bill McDermott is optimistic. In a CNBC interview, he discussed rapid growth in China and the impact of a partnership with AliBaba:
“I was there last year. We formed a very strategic partnership with several firms, among them the AliBaba Group, partnering with with Jack Ma and Daniel Zhang and the Ali Cloud. When you think about the infrastructure as a service of Ali Cloud, with SAP’s business software leadership, you have a business model that generates incredible growth for both companies but also serves customers beautifully.”
In an interview with German Frankfurter Allgemeine Zeitung, Mcdermott discussed plans to double the market value of SAP by 2023. According to McDermott, SAP’s market capitalization has already grown to 140 billion Euros from 45 billion since his tenure began in 2010.
“Measured on the market valuation of pure cloud service providers, we have potential in our portfolio for a further 90 billion euros in market value… By 2023 we plan to increase the market capitalization to 250 to 300 billion euros.”
SAP has a plan to achieve the CEO’s lofty goals. Alongside rapid growth for SAP Greater China, McDermott aims to grow total SAP revenue to 35 billion Euros by tripling their cloud business. The restructuring places every business unit under the microscope but also allows SAP to move people to where they are needed most.
SAP has grown to become Germany’s most valuable company, achieving a market capitalization of 122 billion Euros. To hit the CEO’s target, SAP will focus on growth areas including cloud, IoT and AI businesses.