Cloud services accounted for half of revenue growth at SAP in 2016

SAP's revenue from cloud subscriptions and support grew so quickly in 2016 that the company has raised its forecasts for 2017 and 2020.

Full-year cloud revenue grew 31 percent compared to a year earlier, accounting for over half of the company's revenue growth. Total revenue reached €22.1 billion ($23.8 billion), up €1.3 billion on 2015, while revenue from cloud subscriptions and support grew €707 million to €3 billion, the company reported Tuesday.

Profit after tax rose to €3.6 billion from €3.1 billion in 2015.

SAP is keen to see more of its software business move to the cloud because, unlike traditional software licenses that bring a bump in revenue at the moment a deal is signed, it represents a predictable source of revenue. Together with software support, the company says that the growth in cloud services means 61 percent of its revenue now comes from more predictable sources.

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