AI Chatbot to Provide Targeted Alerts During Natural Disasters
AI
Zaker Adham
18 days ago
29 June 2024
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Paikan Begzad
Summary
Summary
Legacy software companies are experiencing unprecedented growth, with industry giants like SAP, Oracle, and IBM seeing their valuations soar. This week, SAP's shares exceeded $200 for the first time, reflecting a broader trend among these established firms.
Founded in 1972, SAP's current valuation stands at a remarkable $234 billion, up from $92 billion two years ago and $156 billion last year. This 50% increase in market cap over the past year highlights the company's successful adaptation to modern technological demands. Under the leadership of CEO Christian Klein since 2020, SAP has focused on transitioning customers to cloud services and forming strategic partnerships with major tech players like Google and Nvidia..
SAP's impressive growth can be largely attributed to its shift from traditional licensing models to cloud-based services. The company's Q1 2024 report shows a 24% year-on-year increase in cloud revenue, a trend expected to continue due to a robust cloud backlog. Additionally, SAP's integration of AI into its cloud offerings is contributing to its upward trajectory.
Despite some dissatisfaction from on-premises customers regarding new technologies being exclusive to cloud products, SAP has encouraged migration to the cloud by offering discounts. This strategy aims to streamline operations and enhance customer experience through advanced AI features.
Investment firm Ave Maria World Equity Fund recently recognized SAP as a top performer, noting the transition to a SaaS model will likely expand the company's total addressable market (TAM) and improve margins.
According to Gartner's chief forecaster, John-David Lovelock, legacy software companies are benefiting from ongoing digital transformation efforts initiated in 2021, with preferences for cloud solutions and the need for system upgrades driving growth.
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