German business software maker SAP (NYSE: SAP) raised its sales forecast for web-based software on Thursday, saying competitors were unable to match the security of its cloud computing systems.
Cloud computing allows businesses to cut costs by ditching bulky servers for network-based systems using remote data centres run by technology companies.
The company said it expected revenue from cloud subscriptions and support of between one billion and 1.05 billion euros in constant currency terms this year, up from a previous forecast for 950 million to one billion euros.
Revenue from its cloud business jumped by 32% to 242 million euros in the second quarter, helping overall revenue grow 2% to 4.2 billion euros.
Chief Executive Bill McDermott said he expected to snatch business from pure cloud service providers such as Salesforce.com and Workday Inc.
Global business spending on cloud services is expected to jump 20% this year to $174 billion U.S., research firm IHS estimates. By 2017, spending will be at more than $235 billion U.S., triple the 2011 level, they expect.
ADRs in SAP climbed $1.61, or 2%, to $81.25 U.S., within a 52-week range of $69.71 U.S. to $87.42 U.S.
