SAP Q2 results reveal large orgs now firmly on the path to AI

Due to the magnitude and heft of ERP, she said, “these projects are typically very expensive, often costing 10s or even 100s of millions of dollars for a large enterprise. AI is critical to capturing that spend, because companies look for leading AI capabilities when selecting a modern ERP. Overt spend on AI related to ERP pales in comparison to the total spend on ERP software, though AI is a growing and increasingly important element.”

SAP, said Herbert, has done well capitalizing on this modernization wave and “has won new logos and retained many of its existing logos. While it has been a bit slower to the cloud versus some competitors, it now has more solid cloud messaging and offerings coupled with AI and other modern platform features. We expect their growth to remain strong given their dominant position in the ERP market and ongoing investments in innovation.”

As for the prospect of greater profitability fueled by AI for the company, she said, “we know that there are several ways that companies like SAP are benefiting from internal AI, ranging from customer support to software development to internal financial processes and more. All leading software companies are using AI internally as well as externally at this point.”