SAP slashes forecast as customers move to Internet-based software

SAP SE cut its full-year earnings forecast as software customers move to applications delivered through the Internet, a trend that’s brought sweeping changes in the technology industry. The world’s largest maker of business-management software said Monday its 2014 operating profit, excluding some items, will be in a range of ¤ 5.6-billion (Cdn $8 billion) to ¤ 5.8-billion. That compared to an earlier pro- jection for as much as ¤ 6-billion. Earnings are taking a hit as CEO Bill McDermott accelerates sales of cloud-computing tools that businesses access online rather than store on their own computers. That means clients pay SAP more money over time rather than at the start of a contract, re- ducing near-term profit. “This business is very attractive to us, so we won’t decelerate just to preserve margins,” chief financial officer Luka Mucic said in an interview. “For sustainable, long-term investors it makes a very decent story to buy into.” So far, shareholders have been reluctant to ratify the story. SAP’s New York-listed ADRs fell 4.8% Monday to close at US$65.68. Bloomberg News