Emerging Technology Drives Big Growth: SAP Co-CEO

Wednesday, 24 Oct 2012 | 3:58 PM ET

Business software firm SAP is seeing double-digit growth as it invests in cloud computing, data solutions and mobile — areas that are seeing massive growth, co-CEO Bill McDermott told CNBC's "Squawk Box" on Wednesday.

While tech hardware companies have been reporting disappointing third-quarter earnings or sales, SAP has been able to buck the trend by investing in key areas of the information technology (IT) sector, primarily software.


"There is a structural change in IT, because a lot of the companies in IT that haven't done as well are very hardware-centric," the SAP executive said. "It is software that's the innovation area of IT."

Indeed, companies like IBM, Intel and Microsoft all faced challenges in the third quarter. All were undermined by the slowing global economy, and shifts in consumer spending from traditional personal computers (PCs) to tablets.

Three years ago, SAP, which competes against Oracle, laid out on a strategy to go after the three emerging areas of enterprise computing: the cloud, mobile, and real-time databases. For the latter, SAP created Hana, a software solution that performs analysis in real time. (Read More: As Some Thrive on Disruption, Others Strive to Survive It.)

Big Data Drives SAP Growth: CEO
Bill McDermott, Co-CEO of SAP, discusses how cloud computing, mobile use, and SAP's HANA software is driving the company's growth.

"These emerging businesses are all growing in triple digits," McDermott said. "When you combine that with core business, you have a real double-digit growth story all across the world."

Even with the problems in Europe, the business was "flattish," McDermott said. "And if you look at North America, we're up 37 percent," he added. Asia and Latin America were also strong, he said.

China in particular remains a growth area, even though there's a lot of speculation about what the country's economic deceleration means for the global economy overall.

"Selling into China [is] a really good growth story right now, which is why we announced a year ago that we'd invest $2 billion," McDermott said. "We see tremendous opportunity."


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