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Strong cloud demand provided SAP with a lift in its fourth quarter (ended Dec. 31) and its cloud business is expected to grow even more in the months to come, company executives said Jan. 29 during an earnings webcast.

Cloud revenue grew 8% in Q4 from a year ago to 2 billion euros using International Financial Reporting Standards (IFRS), the company said. Annual cloud revenue increased 17% to 8.1 billion euros.

“Our growth in the cloud is stellar,” SAP CEO Christian Klein said, noting that if you “back out” the company’s travel and expense business from the equation, “we are already growing at a very high rate.”

When you factor in its new RISE with SAP offering and “the innovations coming, we’ll further accelerate the growth” of the company’s cloud business,” he predicted during the Q&A.

SAP is also the only cloud vendor in the market that is localized across 100 countries, he pointed out earlier in the webcast.

Continued lower transactional revenue, especially in the company’s Concur Software-as-a-Service (SaaS) business, “negatively impacted cloud growth by 2 percentage points,” SAP said.

However, cloud revenue from SAP’s SaaS/Platform-as-a-Service (PaaS) offerings and its Infrastructure-as-a-Service (IaaS) offering grew 22%. Cloud gross margin, meanwhile, increased 2.1 percentage points to 67.2% and operating profit increased 26% to 2.66 billion euros.

SAP announced two days before reporting earnings that it entered into an agreement to acquire Signavio, a company focused on enterprise business process intelligence and process management. Combining Signavio with SAP’s Business Process Intelligence unit “will strengthen SAP’s capacity to help companies quickly understand, improve, transform and manage their business processes at scale,” the companies said in a joint announcement. The transaction is expected to close in the first quarter of 2021, subject to regulatory approval.

Business Process Intelligence is a major part of SAP’s RISE with SAP package that helps companies “perform a holistic business transformation that makes them resilient, agile and intelligent,” according to the company. It includes “support for an accelerated move of core” enterprise resource planning (ERP) “processes to the cloud,” it said.

“Signavio’s integrated cloud-native process management suite perfectly complements existing business process intelligence software from SAP,” the companies said in announcing the deal.

SAP attracted 130 pilot customers for RISE, Klein said during the webcast, noting that initiative started nine months ago.

“2021 will be an exciting year full of opportunities” for SAP, Klein predicted during the webcast. “Our strong finish to the year and the launch of RISE with SAP, our new holistic business transformation offering, position us well to meet our new outlook targets,” he said in a statement included in the financial results announcement.

Echoing Klein, CFO Luka Mucic said on the webcast: “We believe that our cloud business will reaccelerate…. We believe that we will see in Q1 a trough in terms of the growth of our cloud business and then, from there on, we’ll start to reaccelerate. Cloud will more and more become the dominating line item” for SAP in 2021.

SAP is projecting that annual cloud revenue will grow 13-18% this year to 9.1 billion-9.5 billion euros.

In a statement, Mucic said: “In a uniquely challenging environment, 2020 was a record year for cash flow in every single quarter and the full year. Our better-than-anticipated top line performance combined with our quick response on the cost side drove strong operating profit. SAP’s expedited shift to the cloud will drive long-term, sustainable growth while significantly increasing the resiliency and predictability of our business.”