We're all on a learning curve when it comes to AI, says SAP CEO Christian Klein - and, yes, that includes SAP

Earlier this month the Financial Times ran an op ed piece authored by SAP CEO Christian Klein in which he addressed - and dismantled - the dreaded ‘SaaSpocalypse’ narrative so beloved of Wall Street and other armageddon pedlars.

In the piece, Klein wrote: 

Every major platform shift follows the same pattern. Early on, value accrues to the lowest layers of the stack: the compute, the models, the infrastructure. The shovels in the gold rush. Over time, value migrates upward to the application layer, where technology translates into business outcomes. 

It’s a journey, in other words, a cliché perhaps, but one that is a cliché because of the underlying truth that bears repetition. As SAP release its Q1 numbers, and with the annual Sapphire conference looming next month, Klein returned to some of his thesis in a post-results announcement conference call with analysts.

The emphasis was very much about how early in the AI and agentic journey the sector is - and that SAP itself is no exception to that. Klein said:

Let's be honest - large-scale adoption of enterprise AI is still in its early stages. Also, we at SAP are learning our lessons every day with our customers about what it truly takes to make business AI work reliably, which is key when you won the world's most mission-critical and complex business processes.

Agents often don't have yet the full understanding of business data and processes to deliver highly accurate outcomes. This is needed to deploy at scale and with high accuracy, agent use cases in the most mission-critical parts of our customers' business.

But, he insisted:

We are learning fast, and we are very confident that SAP has compared to many other software companies, the right assets to win - very deep domain know-how about business processes and data as well as enterprise gait, governance and security. SAP's ERP developed over 50 years can also be seen as the institutional plan of every company where data and process domain know-how is getting stored.

Duty 

He added that while there is a learning curve for SAP, there’s one thing he tells his team about the AI product lifecycle:

It's actually great that we are running the world's most mission-critical business process.This ERP, what we are actually owning has so deep domain knowledge. And now the task is for the remainder of 2026 is how can we infuse this domain know-how, both from a data, but as well as from a business process perspective into the AI agents.

And as for the idea that Large Language Model (LLM) providers are going to undermine the raison d'être for traditional SaaS firms, Klein argued:

I don't see one tech company, also not LLM providers. who actually can actually deliver at scale agentic AI use cases for the world's most mission-critical business processes. I mean when I actually started to harmonize data modules at SAP five years ago to solve the integration challenge, I never saw that five years later, we are sitting here in front of 7.3 million data fields in our ERP, where you now need to build knowledge squares to correlate this data to actually solve some of the most complex tasks in the world. And for customers...today, [LLMs] are 85% accurate, they are 90% accurate, but is this enough? When you are touching the payable, the finance, the financial close, the supply chains of a customer, no, it's not enough.

That means:

I really want to emphasize, this is a problem which actually SAP is duty-bound to solve. Over these 7.3 million data fields, and over 120 mission-critical business process, I don't believe there is any other software company, for sure, not the LLM providers, who actually can sort that out. That's actually our task. We are very confident to do that. I mean, in these ERPs, there's 50 years of know-how and this know-how also sits with an SAP. And yes, we are going to make that work.

Eating dog food

SAP’s own adoption of AI is paying off, he argued, arguing that the tech will enable the firm to be run more autonomously in the future:

We act as our customer, using our own AI across engineering, support, services and go-to-market with a direct impact on our top and bottom line financials. In our engineering teams, we are using AI to work more efficiently with Joule for app development, and by [using] third-party tools like Claude Code and GitHub Copilot, we are increasing developer productivity already by over 30%. With AI assistance, our services and support teams are handling significantly higher ticket volumes without a proportional increase in head count. AI assists 100% of support cases and 20% of our tickets are even resolved by AI, fully autonomous. Thanks to these efforts, we observed a 12% higher productivity in our support function.

We have more than 80,000 colleagues in services, and our consultants save with our AI one day per week by much more efficient system configuration and custom code analysis. This leads as well to faster project delivery and a huge productivity increase. For our go-to-market teams, AI improved our demand generation activities by personalizing and automating outbound campaigns tailored to customer situation. It saved over 83,000 hours and directly influenced the pipeline with additional €50 million of value. Even better, it helps us to target the right customers, identifying real pain points early and replacing gas work with focused engagement up to 6x more effectively.

Coming up in May is Sapphire and at the conference will come some big changes, promised Klein:

We plan to announce some fundamental changes to our portfolio to infuse this deep domain know-how into SAP's AI agents, and we will govern the agentic AI layer for our customers. This foundational change will enable SAP AI agents at scale to deliver highly accurate results to take actions across end-to-end processes in a secure manner.

My take

A cogent ‘SaaSpocalypse take down - preach it!

As for the SAP Q1 numbers, they came in strong, with a 17% profit increase year-on-year to deliver €1.946 billion and a six percent rise in revenue, which hit €9.56 billion. Cloud revenue was up 19% at €5.96 billion.

Onwards to Sapphire!