Europe’s software powerhouse SAP SE is staring down an AI threat as the blockbuster cloud migration boom nears its end. CEO Christian Klein, who jogged the company back to Glory six years ago, is now scrambling for a new act. Once left behind in the cloud race, SAP forced customers to upgrade or counter, causing cloud sales to triple to €22 billion ($26 billion) this year. But with support for legacy systems that will gradually become growth engines in 2027. Analysts warn rivals such as Microsoft and Salesforce Eye SAP’s turf, especially in AI, where adoptions are lagging and customers are costing Baulk. As Europe’s most valuable technology company – at the market capitalization of €200 billion – SAP’s pivot could ripple across the continent’s innovation scene.
Bloomberg’s Deep Dive, published September 24, 2025, reveals internal jitters and customer frustrations at SAP’s Orlando Sapphire event. Klein shows AI-infused suites of smart assistants and automation agents to alleviate uncertainty. Yet many attendees complain that the grueling million-dollar cloud shifts—60% haven’t even started. Giants like Mercedes-Benz juggle 1,200 SAP apps, prioritizing essentials amid the chaos.
SAP’s AI threat: hurdles and horizon
SAP bets big on AI to maintain 15% cloud growth through 2027, then 10% after that. But the AI threat is increasing: Gartner highlights market share losses in CRM (6.8% growth vs. 12% average) and analytics (12% vs. 18% for Microsoft). CIOS throws “SAP-FIRST” before “sap-last” strategies, sat on push for tactics. Only 34,000 of 400,000 customers use AI tools, hampered by complex licensing and fuzzy benefits.
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Key challenges of AI threats and plans include:
- Customer resistance: Exhaustion of custom setups; Companies like NBCUiversal and Aldo are looking for easier navigation and proactive assistance.
- Competitive bite: “Best of Breed is dead,” SAP declares, but users are combining vendors such as Salesforce for CRM and Workday for HR to avoid lock-in.
- Internal fixes: New Sales Training, Bonus Adjustments and Customer Service Chief Thomas Saueressig Drive Adoption; 240 generative AI use cases live, 400 more by year end.
- AI Reality Check: UBS Notes Agents are not “prime time” – 70% accurate at best, delaying ROI; Customers prefer platforms like Azure AI over full suites.
Klein, guided by founder Hasso Plattner, promises better communication and demos. As the AI threat evolves, SAP must risk wooing skeptics or Europe’s tech pride. Investors Have Recently Dumped Stocks Over Disruption Fears – Deliver Klein’s Vision?
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