Good afternoon, everyone. Welcome to the Financial Analyst and Investor Conference at SAP Sapphire Orlando 2019. Thanks for joining us here on-site in Orlando. A warm welcome also to those of you who follow this event over the web. My name is Stefan Gruber. I'm head of investor relations with SAP. I'm just realizing I'm probably the only guy wearing a tie here in the room, let's call it the art of differentiation. As usual, at the beginning, I will walk you through the agenda for today's event. We have three presentations. Apparently, this is a slow clicker, but I'm getting there. There you go. Three presentations, 20 minutes each, gives one hour presentation time. Unsurprisingly, there's a big focus on Qualtrics. We had Ryan Smith joining Bill McDermott, our CEO, yesterday on stage.
This morning, our co-founder and chairman, Hasso Plattner, was joined by Jared Smith. Here we have Zig Serafin, the president of Qualtrics, to talk about how Qualtrics also differentiates SAP solutions. Many of you might remember Zig because he was on stage with Jared Smith at our Capital Markets Day in February this year. We have the intelligent enterprise strategy. Christian Klein, our COO, will talk about this. The last presentation will be a business and financial update by Luka Mucic, our chief financial officer. After Luka's presentation, there's an executive Q&A session. Christian and Luka will be joined on stage by Bill McDermott, Adaire Fox-Martin, Jennifer Morgan, and Juergen Mueller. I have a brief housekeeping items list. We'll look forward to seeing you tonight at the investor reception, which will be held at the JW Marriott Hotel at the Primo restaurant.
Also, this event right now is being webcast, make sure later on you use one of the roaming microphones for the Q&A session. We'll also take questions by email. Please send them to investor@sap.com. Finally, the safe harbor statement. After Tim Cook's presentation yesterday, I had no choice but reading it from my iPhone. Please note that except for certain information, matters discussed in today's conference may contain forward-looking statements, which are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect our future financial results are discussed more fully in our most recent filings with the Securities and Exchange Commission. These were all my housekeeping items for today. It's my pleasure to invite Zig Serafin to the podium.
How are we doing? Can you guys hear all right? Little bit hard to hear in the back. Maybe somehow they can figure out how to get the folks to tune in or tune out. Good afternoon. Thanks for coming. I'm president of Qualtrics, Zig Serafin. I'm responsible for a lot of the product work within the company. I've been with Qualtrics for about three years. Came to Qualtrics from Microsoft after being there for 17 years and had worked on some of the artificial intelligence, conversational understanding, natural language capabilities that are part of Azure today. It's actually a very exciting time to be a part of SAP. We're going to spend some time here just to give an update on what have we accomplished since the acquisition closed, talk about a little bit of the products.
I will give you a little bit of perspective, which is joining SAP, a few things that I've noticed that are quite exciting. Both Ryan Smith and I have probably had more CIO and CEO-level meetings than even in the last three years, just in the last few months. I think partly that comes just from the level of relationships that SAP has. The kinds of conversations we're having around experience management are quite substantially greater in terms of opportunity and strategy than we were actually able to have as a company on our own. Second to that, I've noticed is that the SAP sales organization and the relationships that they have with many customers around the world are quite uniquely advantaged versus what I've typically seen. I came from a company that has very deep relationships with IT departments.
What SAP has is business decision maker, major departmental leader relationships that actually affect the way that businesses work, and that's quite relevant to the nature of the experience management offering that we have. The third point is, as a company, we've spent more time focused on advancing and moving our offering in the market and partnering with customers than we actually have on internal integration. Sometimes when you go through an acquisition like this, things might slow down a bit. You might spend time figuring out what the plan is going to be in the future. That's not been the case. We've spent most, I'd say 90% of our energy, has been on accelerating and advancing what we're able to do as a company by ourselves, as also as with SAP. I hope you actually see some of that in the context of my comments here today.
I hope that most of you were able to see the keynotes, with Ryan Smith and Jared Smith today, with Hasso and Ryan with Bill McDermott yesterday. Just in terms of a quick recap, the experience economy is absolutely changing the way that organizations are looking to listen and the kind of data that they want to be able to use. The relationship between experience data, which is your sentiments, your emotions, what people think, what people won't like, what people like, and how people are expressing themselves. The relationship of that to operational data and the way that you end up using that to be able to manage and drive forward the overall operating plan for a company is changing. That's actually requiring a new kind of system that people are wanting to use inside companies.
That we refer to as a system of action, which is what the experience management system that we have is about. It's based on four core experiences of business. These are core applications that we have: customer experience, employee experience, product experience, brand experience. It's built on a very powerful platform that is a combination of analytics, a combination of research sciences, workflow engines, and integrations to a variety of applications that we end up interacting with from an operational standpoint. Those four core applications are the core of Qualtrics business.
Put together in combination with the systems of engagement, systems of record, the operational systems that SAP provides, allows us to be able to provide a value proposition to market that processes everything that a business is doing, from everything from product development to how you actually bring the product to market, to how you actually end up driving repurchasing behavior over time. Traditionally, the SAP business has been about the operational side. It's about how to be making the revenue side of the system obviously more efficient, how to think about the way that you end up deploying your resources within the enterprise. It's about how do you manage your employee workforce more effectively. With Qualtrics, you see the top layer of this here now, where you actually start to understand the needs that people have, people's motivations, the impact that they might have.
How do you create longer duration in relationships, both with the employee as well as the customer base you're working with? Together, you end up building a very powerful set of predictive models and powerful set of ways in which you can drive decisions around how business runs. The opportunity is quite substantial if you look at that big picture. Double-clicking on this. Let me go back one slide. Backstage. There you go. Thank you.
If you double-click on this and you apply this to the customer experience value chain, you look at the business and capability that SAP has provided on the operational side, one of the advantages that SAP has, and I've seen this very quickly as I've joined the company, is the ability to provide an end-to-end continuum of workflow and operational systems that start with the moment you actually have an opportunity to identify a customer, to order and provisioning, to fulfillment, there's an entire system and continuum that's provided today under C/4HANA that enables that today. If you think about it, even though you have the ability to provide the best-in-class e-commerce experience where customers know exactly where in the purchase flow customers might be dropping off, the ability to know why has not been done with precision, right? As an example.
Another example, website and the app experience, the digital experience that people get. Customers can know that certain pages or certain things that are on that website or on that app, that there's a certain level of engagement drop-off that might be happening, but they don't know why. Is it because of the nature of the product that's being provided? Is it because of the way the experience has been put together? What is the experiential context that you want to have around that operational experience? Yet another example, the procurement one.
There's a disconnect between potentially the supply chain management decisions that someone is making, and ultimately the data you want to have in order to be able to determine, for instance, how much inventory or supply you need, or how to think about the demand that you might have in the market beyond looking at, for instance, a trailing pattern of orders, for instance. But for instance, are there experiential things that actually shape the type of product that you might want to have on the shelf and actually have that actually affect even what you're doing upstream in the product development life cycle, which is a significant opportunity, not just within a C/4HANA world, but even an opportunity with respect to the product life cycle management and supply chain aspects of the systems that SAP is enabling.
This is taking that previous chart and putting context on it from the perspective of customer experience. This next one is looking at it from a workforce perspective. Again, with SuccessFactors, you now have the ability to do everything from onboarding a candidate all the way through to the life cycle of ultimately retiring or the exit from an organization. An entire continuum of the workflow, from learning and development to understanding the talent that you need to be able to acquire. It's a very efficient engine and process that it gets enabled with SuccessFactors. But you overlay that and you connect that with the Qualtrics employee experience management system, now you understand what's important to people and how to engage them as they're actually being onboarded in an organization.
What are the things that you need to be able to do to be able to develop leaders to retain the right type of talent and develop the right kind of talent? How do you build leaders that are actually able to do that? How do you understand more authentically what it's going to take to be able to build a high-performance culture? Ultimately, how does that actually help to be able to set you apart as an organization relative to other people in the industry? There's a lot of opportunity when you look at the combination of both the OData and XData working together along this continuum. We announced yesterday, the introduction of 10 new capabilities that are being available as part of the Qualtrics and SAP portfolio. These are some of them.
This is part of the SAP C/4HANA plus Qualtrics XM customer experience management system. These capabilities span the entirety of the C/4HANA portfolio. They start with the marketing area. In the Marketing Cloud, you're now able to, with the Qualtrics system, have the ability to better understand customers' behavior and use that to be able to more effectively drive automated marketing campaigns. This allows you to be able to do much richer segmentation, for instance, and better understanding of your audience.
that will drive better predictive outcomes with respect to what someone's doing with Marketing Cloud. In the sales side, being in a position where the offering is now able to go after understanding the true strength of a customer relationship and use that to be able to have early warning signals and indication on, for example, things like renewal rate or possibility of churning or what does it take to be able to expand revenue. It's truly understanding much more holistically, rather than just looking at transactions, what is the relationship between your customer and the steps and actions you're about to go take? Another example is in customer service. We have the SAP Qualtrics CX for customer service.
Being able to understand how to more seamlessly deliver an entire customer service life cycle from when someone touches the help desk, for instance, and be able to better measure customer experience, and then be able to use that to drive the right type of behavior, training, rewarding of the people that are on the front lines that are inside help desk environments, as an example. This is a measurement system and an action-taking system that actually helps to be able to round out the offering around Service Cloud. The one in the middle is the Customer Data Cloud, where we can actually connect all of the feedback that the Qualtrics system is gathering, and build a consent-driven profile based on trust that actually further augments the context and information that the C/4HANA Gigya system actually has.
We actually are augmenting additional intelligence around experience, which actually helps to power all of the C/4HANA suite. The last one here I'll talk about is Qualtrics CX for Commerce, and frankly, I think this is one of the most exciting ones, because of the rapid ability for us to impact the digital interaction experience that people expect, powered by the Hybris offering. What we've done here is we've taken the SAP Qualtrics CX product, and we're integrating it with the Commerce Cloud. This effectively gives the ability to connect with customers throughout the entirety of digital life cycle, from websites to in-app. The interactions that are driven can be conversational, they can be chat-based. They're done at the right points and moments in time along the journey of a customer experience on digital.
This allows you to be able to capture key insights, be able to drive better personalization, to drive a better experience with the way that the Hybris system ends up being tuned for an entire customer journey. You can monitor feedback across different touch points on any device or any channel. Most importantly is close the loop on things that people are learning by using the action taking. This is the first time that you actually have an action-taking system that's being built in as part of a Commerce Cloud around people taking responsibility beyond just essentially the digital interface, but looking at the customer relationship more holistically as part of that digital journey. SuccessFactors. There's three new capabilities here that we're introducing.
At the center is the employee experience engagement platform and how that works with the SAP SuccessFactors Core HR, and workforce planning and HR analytics capabilities. With the employee experience capability being added into the SAP SuccessFactors functionality, you now have the ability to understand the entirety of an employee experience journey and be able to connect with people based on operational data and where they might be in their life cycle as an employee or as part of the workforce. It is true for leaders, it is true for a whole variety of different people within an organization. It is a very powerful combination of two things coming together. You can also on the very far right side here, the SAP SuccessFactors performance and compensation capability. We are taking the Qualtrics ability to do choice modeling and we are adding that for health and benefits capabilities.
You can actually allow an organization to understand what benefits will make best sense for a workforce as part of the journey of doing an annual renewal cycle, for instance, on things like care and benefits that exist for an employee base, and be able to do things that are more packaged properly for a workforce as part of the SAP SuccessFactors functionality. This first one on recruiting and onboarding, I will double-click on that one as an example, zooms in on the importance for what it takes to be able to hire the right talent, care and feed the talent, retain the talent, and understand what it takes to best be engaged as part of that very important stage of recruiting and then onboarding, which is part of the SAP SuccessFactors' value proposition.
With the Qualtrics functionality being implemented here, you now have the ability to help recruiters, managers, leaders to prioritize the right actions with the biggest impact that they can have on, for instance, what it takes to ramp a new employee that is coming in, and then be able to monitor the improvements and actually have action taking and ownership and accountability. Over time, also have early warning signals that can exist because of the fact that you are bringing engagement data in combination with the SAP SuccessFactors operational data as part of the life cycle of an employee. Those are some examples I have zoomed into, but of about eight key areas that we have just introduced as part of both SAP C/4HANA as well as SAP SuccessFactors. The last area is we are enabling the Qualtrics research platform to be available on something that we will refer to as CoreXM.
This becomes the foundational building block for organizations to deploy the use of the experience management platform enterprise-wide. The conversations we are having with IT leaders is today where they want to put in a utility that they can use across an entire organization to standardize on a system like this that they can then use across many different operational environments. It comes with a developer platform, it comes with the entire analytics suite. From statistical analytics to text analytics that actually will complement the SAP C/4HANA and SAP SuccessFactors functionality I talked about. It most importantly starts to create a standard way in how experience data can be able to have one standard centralized place for it, but still be made available on an enterprise-wide basis.
Included in that is the ability to leverage the security management and provisioning aspects of the system, which many companies around the world today haven't had their handle on. The traditional approach to doing research around experience data is one-off vendors, individual departments that people have made decisions around it. IT people are looking at this now that Qualtrics is part of SAP, and they're saying, "How do we just standardize on this and actually have a bulletproof system that's FedRAMP compliant, that's HITRUST certified in healthcare, that has GDPR compliance in Europe, and has features and functionality that actually helps you be able to maintain compliance, and use that as a core utility that can run across an entire enterprise." That's a quick update on what we've been doing. We'll take Q&A later in the panel discussion.
I'm going to turn it over to Christian, who's going to talk about the intelligent enterprise and some of the operational sides. Thank you.
Thank you, and welcome to SAP Sapphire. Two objectives I have for my presentation. The first objective is, until I finish my presentation, hopefully all the people in the back listen as well. The second objective is, of course, also to talk about now how can we or how can I also, I and my organization also contribute, of course, to the financial objectives we as SAP also have given to the financial market. There's no need to talk about these two graphs. I guess you know them very well. SAP is also known for keeping the promise. When Luka and Bill, of course, giving such general guidance to the capital market, for us, it's also very important that there is, of course, an operational plan behind. I have two roles, as I said yesterday, in SAP.
My first role is as a COO, drive operational efficiency and build a foundation for growth, enable new business models. I come later to that, what we are doing there, supporting these goals on the growth as well as on the operational excellence side. The second point is, of course, also engineering great product. As I said, I'm the first customer of SAP. I know what is working. I know also sometimes the issue we are still facing. There, of course, it's also very important that we build first-hand products which help SAP to grow. But second-hand, of course, that we build products, especially in the cloud, which scale, which is also pretty important for our cloud cost margin.
When you look into my role as COO of SAP, there are always some questions around how is the adoption of S/4HANA going on in the market. When you look into our own organization within SAP, our own move to S/4, and I guess Luka can testament to that, oftentimes it's not so much the technical adoption, the technical migration. Oftentimes it's more about this cultural change which needs to happen. Enabling new business models for the cloud, people need to think different because the cloud business model is running in a different way than the on-premise business model. Also, it's about process standardization. When you apply standard software, you need also process standardization. When you talk about AI and automating certain processes, it's hard to automate one process if you have 20 variations of it.
When you look into my role as COO, we actually have projects spanning across the whole value chain of a company. When you look into R&D, it's all about how can we code faster? How can we make our developers more effective at the end of the day? Agile release strategy. How can we increase the throughput? How can we deliver more in a shorter timeframe? That's very important. The second thing, marketing. In the old world, our marketing people had budget, they gave it to an agency. In the new world, it's all about marketing automation. What we are here doing, for example, with marketing automation, we are tracking all customer movements on the show floor. When a customer comes back five times to the booth of the digital core, that signals some interest.
We have smart algorithms then to detect, hey, we better approach this customer with some commercials on S/4HANA. This is new ways of doing marketing. These are new ways of doing business. This really also helps more to get more out of our marketing dollars. In sales, we are now implemented Callidus, but again, it's not only a technical migration. In the future, instead of doing six quotes for one deal, our salespeople can have one quote, one order, and one invoice. Even CPQ is telling these people, "Hey, you try to sell this deal to a customer based on some historic deals. We would recommend this price level. We would recommend this service." Because at the end of the day, with this kind of deal combinations, the customer was much more happier than in the past. We also have to enable new business models.
A lot of customers are asking us, "Hey, when it's pay-as-you-go coming? We now enable subscription-based, but now we want to go one step further. When can you sell the platform pay-as-you-go?" HANA as a service, released this morning, available pay-as-you-go. Need some change. We want to build this foundation to have these new business models on the fly. I also come later to that what we do on the product side to also enable our customers to launch these business models end-to-end. On the finance side, together with Luka, we have people now walking through the shared service center. Procure to pay is one of the processes. Order to invoice. How can AI help us to really completely automate such processes? I come later in the product section to how AI can really also help us to do so. It's the high volume business.
For our SME business, we actually want to have a no touch process from the moment of the point of selling to the moment we invoice and realize the revenue. There should be not one human being touching this process anymore. For the SME businesses, the high growth, especially in the cloud, we want to completely automate such a process. Now, in the post sales, that's very different on premise to cloud. What is very important, renewal rates, customer adoption. What we are just doing is rolling out a customer success platform where our people in support, in the service, can see what is the customer using, what is the customer not using. Smart algorithms telling them, "Hey, watch out. There is a renewal coming in one year," and the customer did not even start using the solution.
There's a workflow coming say, "Hey, do something." By the way, based on the usage pattern of these customers, this helped the last 10 times with some other customers to safeguard a renewal. These are new ways of doing businesses. This is how we transform SAP into an intelligent enterprise. Four years back, we did actually the same as many other customers out there. We had a system landscape heavily modified. Every IT project was really taking one year to do some changes and to enable new business models on the business side. Now, we have this notion of all of these COO projects are with business in the lead, and then of course, we are using our own technology, as I said yesterday. Also, this is helping to improve our products. We collected over 1,000 product requirements.
What our end users told us, how we can improve the UI, the features and functions, and so on. This is all what we are doing on the COO side across the company, of course, together with the business and IT. Needless to say, Qualtrics now is also helping us. In the future, all our customer surveys connect the customer survey result to our operations in the post-sales area. This has to happen, connected, the XData and the OData. Same with the supplier. When a supplier is delivering bad hardware quality for one of our cloud products, we should right away have our people in cloud operations giving us feedback via Qualtrics so that in the procurement next time, we can make sure that we order better hardware quality.
We have over 80 use cases now in the meantime identified where Qualtrics can really help us to improve our operations. Next one. That's the slide what I showed yesterday in the keynote. Business process integration. When you want to run an enterprise in the digital economy, it's also about integration when it comes to customer experience. That was always SAP's biggest asset, that we run the world's most mission-critical business processes. I also certainly believe if we now integrate hire to retire, SAP SuccessFactors and S/4 finance, this will also have a positive impact on our renewal rates, because guess what?
When such two solutions are really tightly integrated to each other, it's not like that HR can just walk away and say, "Oh, I go to a competitor," because certain business processes are now programmed where the CFO would say, "Hey, this needs to run out of the box." Clearly the integration helps to sell our software in a much broader space, but also definitely helps to make our business more sticky. Also, as I said, hire to retire will come by the end of the year. Connect the front office with the back office, enabling new business models, will come by mid of 2020, meaning process harmonization between S/4 and C/4. This is the architecture on how we would like to build that without going into too much details. Just one important thing. The SAP Cloud Platform will be the unifying layer.
That we expose our complete data model on the SAP Cloud Platform and build more and more business services and all of our new industry solutions on the SAP Cloud Platform, guess what? This platform becomes much more attractive for our ecosystem. A lot of partners are exactly waiting for that, and that's also for us good business, because in the cloud, you have to go back to standard, and you need partners and customers building solution extensions on top of the SAP Cloud Platform. We also expect much more traction on our platform going forward. I talked about the intelligence we would like to infuse into our business processes. To give you one concrete example, take a process like procure to pay. Today, you do a purchase requisition. Someone in procurement needs to check, is this item on stock or not on stock?
Some others are checking the conditions. Is this purchase item available? Is it allowed to buy it? Approval workflows. We invoice, and suddenly we realize the revenue. In the new world, what I would like to see is, you take a picture of an item. The system checks, is this item in the shopping catalog? The system checks, is it on stock or not on stock? If it's on stock, don't order it. If it's not on stock, order it. Check the suppliers we have. Who has the best purchase conditions? Who can deliver in the fast possible way? Order, invoice, realize the revenue. No touch. Today, this is a cumbersome process for all of our customers. I actually don't care how much AI is behind this process.
I care more about these numbers on the right-hand side, where we can really drive more efficiency for our customers in their mission-critical processes. No one comes to Sapphire and says, "Oh, today I want to buy machine learning from SAP." What our customers want to buy is more intelligent business processes. This is what we are up against for. Real-time, end-to-end real-time steering. I actually found Hasso did a great keynote together with Jared. I'm a big fan of Analytics Cloud. Four years ago, I was standing here with the digital boardroom, a first prototype. We have a real product, and there you can see how important it is also in engineering to be close to the end users, to listen to the end users, and then code a product accordingly. A big success.
I'm also a big fan that, I guess also Luka, we don't need so much Excel anymore. I can look on my mobile. I find all my customer details, 360. When I meet here a customer, I see how happy is the customer. I see the Qualtrics data. I see our operational data. I see the supplier data. I'm at Intel, I see the customer data, the supplier data. I have a 360 view. This is powerful. That also requires before an aligned domain model because HANA can do a lot of magic, but clearly, we need to align the semantics, so that's why integration is so key. Here now with Analytics Cloud, my dream is now the next step as the CEO, do also integrated business planning. Today, many customers out there do planning in silos.
That must be our main differentiator in the market against the Salesforce, against the Workday. Now, deployment. I would say it's a good decision of SAP to give customers choice. I get a lot of questions, Hasso talk about the move to the cloud. There are many industries out there, manufacturing, automotive, huge process complexity. These industries will so soon not move to the cloud. We will give choice. You can stay S/4HANA on-prem and continuous innovations are coming. Everything what we do for S/4HANA Public Cloud will be also down-ported. I would say our customers deserve that. We have very decent business. As I said, in many industries, there is still a lot of growth potential, and we see even customers with competitor solutions migrating greenfield S/4HANA. We want to give customers choice.
that with SAP, you have this end-to-end business planning that it ties also to your financial forecast and to the actuals. You don't need Tableau for actual reporting. You don't need Anaplan for planning. By Analytics Cloud, it comes tightly integrated with all of our applications, and here you go, end-to-end real-time steering. This is also what we are now doing on the development side. This is also something what I'm standing for in SAP to really think cross. I guess the power of SAP is we want to be best of breed, but we also want to be best of suite.
Obviously, on S/4HANA Public Cloud, the functional scope, of course, after four years in the market, it cannot be on par with an ECC solution, which we developed over 40 years. The hundreds of customers we already have serve customers in over 15 different industries. Let's not confuse ourselves that this product is only available in three industries. Of course, we have to add certain industry capabilities on top, but we are today already serving customers of over 15 industries. In professional services, process complexity lower. We just signed a deal with over 5,000 user. That's a big company, obviously with much less complexity inside than a manufacturing company. Then there's S/4HANA Private Cloud. Again, can be hosted in an SAP data center in the HANA Enterprise Cloud, or you will also get it on one of the hyperscalers.
With regard to S/4HANA, Google GCP will be available in Q3. Q4, Alibaba will follow to also allow our customers to expand in China. Next year, Azure and AWS. Also very important, this one number there, we should red mark it. Also system availability, high availability. When you run supply chain processes, when you run finance processes, downtimes are not good at all. What we are also committing at Q3 going forward, we are committing a system availability of 99.9%. You can benchmark these numbers to other cloud ERP providers, but this is state-of-the-art. We really want to have complete failover scenarios from one data center to another, so that we have a high resilience across the stack. Last but not least, S/4HANA move.
Now that we talked about all the business value, what you can get with S/4HANA, the elephant in the room oftentimes is also how. Because a lot of complexity, new data model, it's not an easy migration path. Nevertheless, we will continuously invest into data migration tools to ease up the data migration from an ECC system to S/4HANA. We will have better services. By the way, also here, our internal project is also proof case. Oftentimes, the business transformation takes longer than the technical migration. Also here, we are also offering services to transform businesses, to adapt to new business models, to help with process standardization. This is as equally important as the technical migration later on to really also deliver the business value for our customers. Last but not least, functionality. We hear our customers also in the S/4HANA world, in automotive, in some other industries.
We will also continuously enhance the functional scope of our S/4HANA on-premise system. I'm very positive with the S/4HANA move. I'm talking also just the last two days to big customers of us. There is not so much question about, do we move? It's more about the how and the when. Just to give you also one data point, I talked to Deloitte this morning. They said, "Christian, there is not a shortage of customer interest. The shortage what we have in the U.S. is the shortage of good S/4HANA consultants to make the move happen." That's the restriction what we are facing more on the consulting side. Definitely, there is a huge customer interest out there. This is something, I guess, which is also very pleasing for our CFO on the infrastructure side. Finally, we got the memo as SAP.
We consolidated all of our infrastructure under one guy, Gary Slater. He's in my organization. Now we are just having a project ongoing where we are working on three growth lever. First of all, the first growth lever in the middle, multi-cloud strategy, the hyperscaler, so that we have a consistent strategy shifting our solutions to the infrastructures of one of our hyperscalers. Here, flat CapEx spending is also very important because the more we are shifting workload out to the hyperscalers, the less we have to spend CapEx into our own hardware operations. Also very important, that we also, of course, consistently also push for our converged cloud. We had over 130 different cloud infrastructure layers. We are consolidating now down to six. What does this mean?
You can bundle procurement, you can bundle the volume. You get better conditions from all of our hardware providers. You need less monitoring tools. You need less data centers. Just last year, we closed over 18 data centers because we acquired a lot via our acquisitions. We have 43 worldwide, much more than some of our competitors, and we will close 7 more this year, which will also lead to further efficiencies going right away into our cloud cost margins. The second cost lever is, it is all about reducing the total cost of operations of our cloud solution. Here, when you operate a cloud solution, infrastructure is very important, get better purchasing conditions, bundle, and really standardize on one infrastructure layer.
Second, application lifecycle management, automate, do the upgrades on the fly, do not have always 20 hours for one upgrade, bring the manual activities down, and do a complete software automation layer across your cloud lifecycle management. Third, support, get the number of tickets down, get the number of support efforts down to build in support into the product. How can CoPilot help to solve some of the tickets before they are even touching our developers or people in support? Very important. We do this across all of our cloud solutions. We have a monthly reporting there where we really now track on how do our TCO measures really proceed, and are we hitting the targets which are necessary to also make our cloud cost margin. Last but not least, resilience, stability. This is very important for our customers. As I said, day one, very mission-critical processes.
For us, it is very important. Hardware can always break, but what is the failover? What is the high availability? How can we then switch a customer from one data center to another? This is what we are currently working on, because this at the end, higher system availability attracts more customers and also provides us definitely higher renewal rates. This is what we are doing across all of our cloud products, across all of our cloud solutions, and we are making good progress. With that was an overview about all the measures we are doing on the COO and the development side. With that, I would say over to you, Luka. Thank you.
Thank you very much. I will give it a last attempt with the noise and do it Wimbledon style. Quiet, please. Much to serve. Second, thanks a lot, Zig and also Christian, for your great presentations. Actually, Christian, I am not sure whether that is GDPR compliant, but he just had his birthday and no better way to start a new year in your life than to attend a great Sapphire. Actually, Sapphire itself has a birthday this time as well. It is the 30th edition. I would say this event has become younger and younger despite the fact that it has been growing over time. I would argue that the same actually can be said about SAP.
I'm not sure whether you have recognized this, but when you're walking the showrooms here, when you're listening into the panels, you're listening to a company that is high on energy, that is really on the move, and that wants to make an impact in the market. The great thing is this is shining through in our results. As you know, we just came from a really strong start to the year. Virtually all of our metrics were up, sometimes in significant double digits. We obviously also had a very stable core business performance in our license business with 4% growth. From a qualitative perspective, we took a very important step with finally migrating completely our SuccessFactors offering over to HANA as a database. Other solutions are following now in Q2, most prominently Ariba, obviously.
This is giving us the confidence, as you know, to significantly raise our ambitions, both for the current year, where we have raised our ambition for the bottom line performance by EUR 100 million at the midpoint, but also for 2020 and 2023. I will talk about this in a minute. What I want to focus in is two things here that have been debated a bit at earnings and clarify those. First of all, we were extremely proud about our strong bottom-line performance, with 19% operating profit growth and an operating margin expansion of 50 basis points or 20 basis points on a constant currency basis. Nevertheless, financial analysts are obviously having a great hobby, which is taking the puts and takes into perspective.
There has been debate about the fact whether the underlying operating margin expansion of SAP, when you take on the one-hand side, the small divestment that we did in Q1, which had a EUR 40 million positive impact, and the dilutive impact from our acquisitions, Callidus and Qualtrics, into perspective, whether there was truly an underlying operating margin increase. Let me clarify this. Yes, there was an underlying operating margin increase. It's very important to note that we have transparently laid out in our Q1 reporting, the top line as well as profit contribution from our acquired entities. However, that is a view only on the performance of those entities as separate legal entities. There is additional integration effort that we are taking on the SAP side of the house to support the successful integration of those acquisitions.
Also the addition of headcount, for example, that joins for these acquisitions, but not at the acquisitions, but in SAP company codes, is not counted as part of this. Therefore, if you do a true like-for-like comparison, and actually the acquisitions had a 60 basis points dilutive impact on a pure like-for-like basis in Q1 versus the prior state. Therefore, it was basically a wash with the positive impact from our divestment, which had a 70 basis points positive impact. You can see that there is underlying operating margin expansion. Just to get this out of our way. The second point that I want to mention quickly is cash flow, which obviously is becoming a very important metric for all of our market observers. As you know, in Q1, we had actually a decent start to the year with 9% operating cash flow growth.
Due to the fact that we have actually managed to decrease for the first time in many years, our capital expenditure by quite a bit, actually by 16%. We expect that we will continue due to the measures that Christian has outlined to have a very favorable development of capital expenditures. The free cash flow was up by 10%. I want to be clear here, that you need to expect through the remainder of the year an increasing headwind from some extraordinary items. Such as restructuring cash outflows out of our Project 2019 restructuring, as well as cash tax payments as we had predicted at our Capital Markets Day. Our expectation for the full year for operating cash flow remaining roughly stable year-over-year still holds.
Obviously, the improvements that we are seeing now and the prospect of much higher profitability in the years to come next to those special one-off items dissipating, is giving us great confidence that as of 2020, you will actually see very strong growth in both operating cash flow as well as free cash flow. With those items out of the way, let's attend quickly to why that is. Why SAP has such a strong momentum in the market. Here I want to come briefly back to the comments that Christian and Zig have been making. We have worked extremely hard, and we have taken pretty bold steps in the last few years. Some of them also initially quite controversial in the financial markets, to build what I would argue is the strongest portfolio of applications and technology solutions for the enterprise software space.
You see the power of this portfolio clearly shining through now. Zig has been talking about the fact that Qualtrics is on a roll, that we have had extremely positive early experiences in working together. Actually, without disclosing the actual performance, Qualtrics had a very strong first quarter being part of the SAP family. I'm happy to report that the forward revenue multiple that we discussed when we closed the acquisition of around about 14 times, on the 2019 numbers of Qualtrics, actually will be significantly lower already based on our current revenue projections for 2019. The great news is that Qualtrics not only drives strong standalone growth, but that now the floodgates are opening up. We are adding 11 SKUs to the SAP price list right now.
We are releasing products that are joining forces between our employee experience solutions on the SuccessFactors side with Qualtrics add-on functionality that our head of SuccessFactors, Greg Tomb, has already talked to me about having triple-digit opportunities already lined up for the next two quarters. The same on the CX side. Alex and Ryan are talking about this at CX Live. We are off to a very fast start, and therefore Qualtrics will be, in a standalone fashion, a tremendous growth driver for SAP. Even further beyond this, we cross-fertilize growth opportunities across our entire portfolio. We're not only, even though it is a major topic at Sapphire, focusing on Qualtrics in terms of our innovation module. You have heard a flurry of announcements over the course of Sapphire that showcase what we will see also in the next few years from SAP.
Which is a strong focus on delivering the intelligent enterprise, adding organic innovation that is truly meaningful and in some cases groundbreaking to our existing portfolio. We are, as Hasso has explained together with Jared, making HANA a first-class citizen in the cloud. CX actually has been breaking through the 10,000 customer mark already, which we are announcing as well, together with new product announcements, such as the addition of new collaboration and project management capabilities as part of CX, a completely new C/4HANA foundation solution. In S/4HANA, there is a great addition of artificial intelligence and intelligent RPA scenarios coming to S/4HANA Cloud, the story goes on and on. We are strongly convinced that with our portfolio, we are playing in a huge addressable market of EUR 350 billion-plus that is growing in double digits.
We have, across all of the major categories in our portfolio, the solution that has the best right to win and the best opportunity to gain market share across the entire portfolio. That's why we believe that it's now the right time to revisit the balance of our strategic priorities for a company. This is not something that anyone should have any concern with. I would argue that throughout the evolution of our corporate transformation, we have always had the right set of priorities at the right point in time and at the right stage of our transformation. When you look back at the last decade, SAP, obviously, as a company, was very predominantly focused on organic innovation. The R&D focus and priority was on delivering an integrated on-premise suite, and we did so extremely well.
The financial focus, therefore, was obviously also on growth, but at the same time, it was heavily driven by a quest for increasing the profitability of the company. We have marched on until we were reaching 33% or around about in 2013. At the turn of the decades to this decade, we had to revisit those priorities. We saw the transformation to the cloud taking off at great speed.
SAP took the right decision to lean into this change, to not fall prey to the innovator's dilemma, but to have the willingness to disrupt ourselves, to go out and acquire the right best-in-class cloud assets for the different pillars of our cloud business, and augmenting this with a very important, significant R&D push towards changing and transforming our entire solution portfolio to natively take advantage of the groundbreaking HANA in-memory database technology that we had invented towards the end of the last decade. As a result of this, of course, there was a significant investment focus, both in terms of inorganic as well as organic investments on expanding our portfolio from being a one-trick pony focused on an ERP and analytics only towards the broad technology and applications provider that SAP is today. It has made SAP more resilient. It has allowed SAP to outpace the market.
It has allowed us to build a healthier business model overall. It came, of course, at significant investment, and that investment was also geared towards building out the functionalities and features of the parts of the portfolio. Admittedly, for some time, integration has probably, while it was never out of importance at SAP, it has taken a bit of a backseat. That is something that we have to revisit now, given that we have built out the strength of the portfolio across all pillars a lot. During this time, of course, the priority was on gaining market share. Why? Because you know the mechanics of our industry. Our industry is characterized by a relatively high level of stickiness of solutions. Therefore, it makes sense to double down in a period of exponential growth on capturing market share and prioritizing growth.
This came at the expense of the margin development during this period of time. Let's be also clear, SAP never allowed the company to fall into a dip. We always and consistently increased the operating profit of the company, even though we were down prioritizing margin increases over market share gains and growth. Now, at this stage, we see now a great opportunity to focus our attention across the company on organic development. Because we have a set of solutions now that command an extremely high addressable market, because we are so well positioned, we can double down on delivering the intelligent enterprise and fusing it with the experience management capabilities to provide a unique value proposition of marrying the experience and the operational data in a way that has never been delivered to customers.
At a point in time where this is becoming more important than ever, as the efficiency lever has been harvested by many companies, the real differentiation in the next decade of business will be around being able to sense the sentiment of consumers early on and adapting offerings swiftly towards that. That's why it's right that from an R&D priority perspective, we focus on making this vision a reality. An additional acquisition would not help us in this. Actually, we can only help ourselves in making the integration between those pieces work, and that's what we will focus on. As a consequence of this strategy, of course, we will continue to shoot for high growth in the cloud. We're not throttling back any of our growth ambitions.
At the same time, this focus on organic innovation will allow us to increase quite significantly the profitability of the company in the next few years. Very importantly, on the capital side of the house, the absence of large acquisitions paired with the increased profitability, of course, will lead to one thing that investors care about a lot. It will increase the cash generation of the company. Therefore, we also felt that it's the right time to become explicit and formalize what we have been talking about a lot verbally to make it a even stronger commitment and signal to all of you that we are hearing the voices that are longing for increased capital returns, and we are preparing for this. Now, what does this translate to? As you all know, it translates to an updated 2023 ambition of the company.
We are retaining all of our top-line driven ambitions that we had set at the beginning of the year, but we are adding to this a particular commitment to increase the efficiency of our cloud business quite dramatically to 75% gross margins. Remember, this includes still a not as highly growing anymore, but still an existing Infrastructure as a Service business. Therefore, of course, the profitability in our SaaS PaaS business and our business networks business will be much higher, will actually be for both of these elements above the 80% mark by 2023. Next to this, we have a commitment to, on average, increase the operating margin between now and 2023 by one percentage point every year, leading up to the 500 basis points that Christian has already highlighted.
Let me just very briefly give you a rundown of the components of how this improvement will come together. Please excuse me for not giving you a very detailed level of levers, because we have a special capital markets day coming up in November, I don't want to steal the thunder there. At a high level, the four levers that we see are on the one hand, portfolio. We have started a very important step with our restructuring program at the beginning of the year. It has allowed us to put the capacity of the company towards the high-growth areas without adding purely incrementally headcount in those areas.
We have taken the important and difficult moves at the beginning of this year, they are going to set us up for having less incremental headcount needs to still drive the growth opportunities in our growth asset areas in the years to come. Next to this, we will also focus on reducing and removing overlaps and duplications of functionalities across the portfolio. There are still areas where, for historic reasons, due to the fact that we acquired some solutions from the market, some functional building blocks, like invoicing, for example, have been built across various parts of the portfolio. We can rationalize this. Last but not least, there are also still opportunities to take a look at non-strategic areas of the portfolio that are operating at low margins.
Most of those are kind of a bycatch from acquisitions that we have done and look at whether there is a better place for those areas, perhaps outside of SAP as part of a financially reasonable transaction like the one that we have done in Q1. There are a few more that might come along the road that will be helpful for SAP. Second, there is certainly the area of organizational review that will be one of the focus areas of our operating committee that we have formed. We still have, in particular in the areas of sales and marketing, as well as G&A, an area to double down on moving more into the area of shared services and consolidating functions, which for historic reasons, still in some of our acquired solution areas are separate, and this should give us some nice savings.
You have seen that on the sales and marketing line, for example. We are already, since more than a year, making great progress in bringing down the sales and marketing ratio, and that is another key component that we think we can further drive down. The third one is cloud operations. I don't want to talk about this a lot because Christian has covered it very nicely. Of course, it's a big lever if you bring up the gross margin in the cloud by 1,200 basis points. It has, of course, an impact that flows down to the bottom line, and we can discuss the levers in further detail at a different occasion. Next to this, of course, optimizing the revenue mix between Infrastructure as a Service versus public cloud will have a positive role. It's not only the cloud.
Very importantly, we see opportunities to also further optimize the profitability in our services business by focusing on high-value services in particular, and also this will have a positive impact. Finally, in 2023, SAP will be roughly 1.5 times the size of SAP today, that will add scale benefits and scale efficiencies that will also have a positive contribution. You can see we have a plan how to get to the achievement of these targets, and we are very happy after the operating committee has completed its detailed work packages to give you an update on the execution of the same in November when we meet in N.Y. again.
Finally, though, that is very important for me, we should not forget while sitting here together and discussing the shareholder experience of one of SAP's most important stakeholders, our investors, that we are doing so at a customer conference. We have here some roughly 30,000 people gathered. We have thousands of customers, and we have lots of employees that are taking care of these customers. At the end of the day, the returns that our shareholders rightfully expect from SAP will only come to fruition if we continue to focus on adding value for our customers and adding loyal employees to the company that can drive with passion as well as with innovation the value creation for our customer base. We will always be focused on a balanced total stakeholder management approach against the company.
The nice and beautiful thing is that those three dimensions of shareholder, customer, and employee experience actually completely correlate with each other. Our customers have come to appreciate SAP as a reliable partner to deliver mission-critical SAP software applications across their entire portfolio of business process needs. They very much appreciate that we give them choice, that we are open, that we are platform agnostic, that we provide them the opportunity to run the solutions in the cloud, as well as on-premise. We add to this now a double-down commitment to integration as part of the Intelligent Suite and the differentiation through our leadership in the experience economy, and this is an unbeatable combination in terms of a value proposition. For our employees, the strategy that we are embarking on is actually exciting.
We are, in so many countries in the world, a great place to work, a leading employer of choice. Now with our focus on organic innovation, every one of our employees has a chance to step up, be part of the change that we can provide, be part of owning the value creation towards our employees. It's not that we can look elsewhere in the market to deliver this. We will provide great opportunities for our talents to step up and own the transformation and own the innovation that we want to see. That will be very appealing and for sure, will drive employee engagement in the years to come.
As a consequence of that, you can expect a company that has continued successful transformation towards greater predictability and reliability in its business model, a continued very resilient player across two strong legs, the core business as well as the cloud business, and a company that is increasingly focused on leveraging efficiency opportunities and providing outsized returns to our shareholders. The equation starts at all times with our customers and with our employees, and we will not forget about this. We are extremely confident about our ability to drive a superior experience across all of those three pillars. With that, I thank you very much for your attention. Are we ready for the Q&A session?
Thanks a lot, Luka.
Thank you.
I think we are now ready for the final Q&A with your executive board member colleagues. I would like to invite Christian to join Luka on stage. I think our CEO as well as Adaire Fox-Martin, Jennifer Morgan, and Juergen Mueller, they should be backstage already and join you here soon.
All right.
Moment.
Good.
Hello, Adaire. How's it going?
Hey, Adaire.
Hello. Hello, Bill. How are you doing? Good to see you. Hello. Hello, Juergen. Hello.
Hey, how are you?
How's it going? All right?
Very good. Hello.
Good. That's the magic moment. I see some people volunteering for questions. We've had now three presentations, one hour download time. Now it's your time. We probably start here in the first row with Keith Bachman, then we take a second question from Adam Wood.
Hi. Thank you very much for the presentations. I wanted to follow up on a question on Qualtrics. The question is, how do you keep it neutral? What I mean by that is, working with a variety of other partners. Bill, according to Gartner, SAP has about 8% share of the marketing and CRM cloud, and I think Qualtrics first attach point is usually the marketing cloud. A lot of customers are, when they're adopting Qualtrics, including BMO, we're attaching to other things, Adobe and Salesforce. You're launching a lot of activities in new SKUs around the opportunities for the combined leverage. How do you also ensure that customers that want to use Qualtrics, in an independent fashion to attach to other solution sets, that it's in fact liberated and able to do that?
How do you keep Qualtrics independent, yet at the same time leverage SAP? Thank you.
Sure.
Maybe I can take that. We will absolutely continue to do that because one of the things that's really been eye-opening to me as I've met with customers and learned more from Zig and the team, is that a lot of people tend to think about Qualtrics or experience management as being very consumer-focused, sales, marketing focused, or just employee focused. For us, knowing all the experience we have across all the different parts of a business in an enterprise, you see where bad experience shows up. You get a wrong invoice, that's a bad finance experience. You show up to pick up a product that's not there, that's a bad inventory or supply chain experience. For us, it's a great way in. That might be where the conversation starts. The ecosystem that Qualtrics has created and that stickiness is fantastic.
We're going to keep going full speed with that. We think that gives us a wedge in and an opportunity to expand the conversation and do as Ryan spoke about yesterday, which is all these experiences are connected. The more that we can show how the experiences are not just in one or two lines of business, that they really are interconnected, that's where our strength comes in as a company.
Thank you. The second question from Adam Wood, Morgan Stanley.
Hi, it's Adam Wood from Morgan Stanley. Bill, I wanted to ask a question around integration. You mentioned it a few times during your keynote. Normally, if you're mentioning something, it's on customers' minds, it suggests it's not perfect yet. Could you just talk a little bit about where you are with the integration of the cloud products? How long is it going to take to get it to be where your customers want it to be? Where's the Cloud Platform on that? With that, could you also talk about, from the best of breed perspective, has that need to integrate slowed down the development on some of those assets, and so they've fallen maybe from the best to a little bit behind? As you complete the integration, can you then re-accelerate the functional improvements that you can deliver on those line of business solutions? Thank you.
Sure. Thank you, Adam.
I haven't heard a single complaint at Sapphire this year on SAP's lack of progress on integration, that's not what I would say was the consensus last year. I heard a lot of noise on integration. We have made a lot of progress. I got a statistic the other day from one of the presidents that runs one of our business networks, a competitor was integrating on 10 points of the solution. We were integrating on 122. One of the things I really want to set the record straight on is even as we obsess about end-to-end, fully integrated business scenarios or business processes, we are far and away more integrated than anyone else can possibly take credit for in terms of their integration to S/4HANA.
The journey is a race without a finish line, even as you innovate on the cloud, whether it's a best-of-breed or you innovate on the S/4HANA, you still have to make sure all the pieces fit together. I really do think the customer base is very settled down on that issue, which was a big issue. It's now, okay, these guys got their act together. The other thing I think the customers are very happy with is they see this team, let's just put the cards on the table. We could talk. We have substantially upgraded the executive board of SAP, I think the customers will tell you that firsthand, not only in what they see on these stages, but what they see when they meet with these colleagues.
The other piece is this, we have to be best of breed, we have to be best of suite. We have to be both. You asked, are you a little bit behind in terms of the best of breed because of what you've invested on the integration? I don't think so. I do think that the size, scale, and power of SAP in these LOB clouds, for the most part, is still more substantial than most. In some cases, there may be a functionality gap here or there, but the completeness of our vision still should be overwhelming force when we put the story together the right way in front of the customer. Where it's not, we have action plans to deal with it. For example, Hasso mentioned something on the user experience.
It was one of the line of business clouds, which is about to have a new UI delivered to the marketplace, just to give you an example. Adam, here's what I think is really relevant in this answer. For all of you, over the last 10 years, we've put EUR 70 billion into innovation between the organic R&D and the M&A moves that we made. We're at a perfect position now to fully harvest the integrated business processes, continue the integration work, continue to extract the value for our customers out of those solutions. This puts us in a position where we don't have to do large scale M&A. If we did anything, it would be highly opportunistic tuck-in. Qualtrics is a baby. It hasn't even begun to hit mass scale with a company on a global stage like SAP. You saw what we did with all the others.
All we have to do is what we're doing, build great products, tell a great story, pace our expenses at a rate less than our revenue growth, get the cloud gross margins at 75% on a trajectory, and improve the operating margins of the company one point on a per annum basis between now and the next five years. There's your story.
Thank you. The next question we take here from Michael Briest, and then we take Walter Pritchard. Can I have the microphone?
Thank you, Stefan. Michael Briest from UBS. Two from me, if I can. Firstly, on the private cloud, you yourselves are now much more willing to work with the hyperscalers. We hear the good message there on both profitability and CapEx. With the private cloud over the next five years, is there a chance that is meaningfully less than 10% of sales or even something you don't necessarily own yourselves? Secondly, on access to innovation, we just heard on Qualtrics how there's new opportunities both in C/4HANA and on SuccessFactors. The majority of your customers are still on ECC. I understand there's a carrot here, where with the new innovations, they get access to that.
The first one
opportunity if they move on to S/4. Most of the customers are still on ECC. Is that potentially creating an air pocket around sales, if you like, of the new products? Thanks.
Why don't we do Luka and then Christian?
Yeah. First of all, on infrastructure as a service, you're absolutely correct. We expect that from now on, the relative share and weight of infrastructure as a service will actually start to come down again. We see this already in the forward-looking trajectory of our order entry, that infrastructure as a service is starting to trail the order entry and bookings performance in software as a service, as well as in business networks. Given that, there is actually a scenario that would see infrastructure as a service at lower than 10% of the total cloud composition. On the other side, I've heard the concerns, what does this do to the overall growth prospect of our cloud business? Well, quite frankly, we will focus our infrastructure as a service business on the right opportunities where we can command a decent margin.
It will never be matching the software as a service or a business networks margin by definition, because that's technically not possible, but it will be a very decent margin. We are shooting for, as you know, 35% and even beyond that for the years after 2020.
At the same time, the growth opportunities that we have in exciting new assets like Qualtrics, in our organically developed assets like Analytics Cloud, like S/4HANA Cloud, like C/4HANA, digital supply chain management, and others, is so great that it will make up for this with a much healthier overarching margin profile.
Maybe just to build on what Luka said. When you see also the adoption of the hyperscaler by our cloud solutions, this year almost we will see a 10% shift of all new businesses coming in to one of the hyperscalers. In four years from now, actually, we predict that 50% of the new business is already running on the hyperscaler. You see also this exponential growth we are seeing. We are just in the progress of moving of our solutions to the hyperscaler. Next quarter, S/4 will run on GCP. The quarter after, we will then also have S/4 available on Ali. With that, you will see also further acceleration of our infrastructure as a service business to the hyperscalers. On the other question with regard to a lot of customers still on ECC, in the meantime, we have almost 11,000 customers on S/4HANA.
That's quite a lot to also cross-sell Qualtrics into the S/4HANA space. Also there, we see all the work we are now doing with Qualtrics on the integration side, better connecting Jen's portfolio to my portfolio. I see this as another lever to sell more of our line of business solutions while we are also accelerating the move to S/4HANA. I would say we get a 2-tier effect there, and I'm very positive about that. We can win the best of breed as well as winning the best of suite.
Maybe I could just add a comment from the go-to-market perspective on top of my two colleagues' comments here. Obviously, the margin objectives that Luka has highlighted for infrastructure have been operationalized in terms of the DOA or the delegation of authority that we approve our transactions with, that we can ensure that that is met as an objective. Then from the point of view of moving our install base to S/4, this is a very significant priority for our team.
Anecdotally, in terms of the meetings that I have the privilege of having with our customers on a daily basis, I would say the pace is really picking up and has done so over the last 6 months in customers that have begun the journey, and very much from a very concrete perspective in terms of the business case creation to support their organization's transition to S/4. I expect to see that continue to ramp up over the course of this year.
I'm just going to follow up real quick on the infrastructure as a service, following up to what Luka said. One of the things we've done in the last year, and we're announcing it tomorrow more formally, I had a pre-brief with some of the analysts yesterday and the roundtable with our customers, is we've worked really closely from an engineering perspective. Juergen's team has worked super close with all the hyperscalers, AWS, GCP, and Azure, so that we can develop the reference architecture of SAP running on these hyperscalers, all the services around our cloud platform, HANA as a service, analytics as a service, for all the integration orchestration scenarios. We've actually taken that, we've bundled that, we put services around it, and are working hand in hand with each of the hyperscalers.
We're excited about this because this is now ready to go, and the stickiness of this and the ongoing ability for our customers to build, do more, and for their ecosystems to build more innovation and extension on top of that, we think is going to be a real high stickiness factor and create a lot of cloud growth on the cloud platform side as well. That's a big announcement. We call that Embrace, and that goes this week.
Thank you. The next question from Walter Pritchard, and then we have Ross MacMillan.
Oh, stand up. I will. Thanks. I guess question mainly for Bill, but maybe Juergen as well. When you do M&A, I guess it felt like leading up into Qualtrics, you had even said things like you'd taken all the assets off the table or that others, there wasn't a lot out there. It seems like something came along, and all of a sudden experience was an imperative, and I think we can see how it can be sprinkled in across your portfolio and make a lot of sense. I guess I'm wondering, you've made statements about EUR 70 billion in R&D and M&A over a period of time. How do you think about the organic investments in R&D, which EUR 4 billion a year or so is relatively small versus the prices that you pay here for M&A?
It feels like we're going to get to a situation in a couple of years where another one of these is going to come along and it's going to be 8 or 10 or EUR 12 billion. Are you spending enough on R&D today to prevent yourself from having to drop a big amount of money on a one-time basis sometime in the future? I think we get the message. Next couple of years, nothing, but it feels like beyond that, maybe we'll be back where we are.
First of all, Walter, it's a very fair question. Let me give you just a swift perspective on this. Yesterday, I was on stage with Ryan Smith, and some of you actually saw the little press conference that we had, right, Nicola? Where he basically said in 2010, Qualtrics had more cloud revenue than SAP. You probably saw that, Zig. Qualtrics had more cloud revenue than SAP in 2010. Our strategy was very clear. We were going to move into the LOB cloud, the business network, and we were going to do it faster than anybody else in the industry because we didn't want anyone to figure out our strategy. Our strategy was to have the defining in-memory data platform in the world, was to refactor our ERP system, SAP S/4HANA. That's how you got SAP S/4HANA.
We always had an ambition around CRM, we put the pieces together so we'd have an end-to-end CRM story. We have the LOB, we have the business network, we really had the completeness of vision. Qualtrics was a very unique situation. First of all, Qualtrics was within a few days of being a public company, it was kind of a once in a generation opportunity. We saw a market, we saw experience management, we saw the experience economy. We just didn't know that we had a willing participant in Qualtrics that would be willing to team up with SAP. I think that came on the heels of 2018 full year results. Plus, we wanted to get the workforce organized around the modern economy like machine learning, AI, blockchain, big data, the things that we had to do around data science and analytics.
We moved some jobs around. We opportunistically took out the most important target in the experience economy. I am saying today, is it possible that there could be such a great asset in a few years? It is possible, what we are going to do is we are going to be much more disciplined on the organic growth now because we already have the most complete vision in the enterprise application software industry. If we continue to invest in the businesses that we have at a rate equal to or even slightly greater than we have on the R&D side, we will out-innovate everyone.
One of the key things for us to get right was to get this team right. We got the team right. I am positive of that. Do not be expecting to get surprised, because you are not going to get surprised. We will be very disciplined. The other thing that you have to realize is we have got S/4HANA in the public cloud that is still a stock hockey stick waiting to happen. We have lots of businesses. We launched HANA today as a service, Database as a Service. We have got S/4HANA in the cloud, that is a huge hockey stick. We have got all these growth businesses, and Qualtrics is still so young in its evolution as a giant growth company within SAP. Walt, I hope that answers your question. We have what we need.
We just need a great leadership to develop on top of what we have so we can expand those businesses and really grow them. Jennifer Morgan was a key part of this because our line of business and our business network, as well as Qualtrics, has to integrate into S/4HANA. There is no passive aggressiveness here. They work together beautifully, and at the same time, she has got to drive those businesses so they stay best of breed, and they can beat all comers in a face-off without the help of the suite. That is basically where we are at.
Let me add something from a development efficiency perspective, where I think we make a huge shift now as well. Not only in the cloud businesses, but across development at SAP. If you think about where we are when you are in an on-prem world, it takes time for us to capture requirements. It takes time to build something. It takes time to ship something. Then it is hard for customers to adopt this. They are years and years behind what we are actually doing and what they need. We thought, okay, you need to minimize that time between value creation for the customer. If you look at what Jared showed earlier today, that last year alone in SAP Energy's cloud, we released more than 350 times. This is one very good way that also now Christian and team are adopting and releasing faster.
That means that the time between us learning something, taking requirements, building something, and the customer having value is shrinking dramatically.
Yeah. Perhaps just very quickly from my side, two statements here. I think it's not so much a matter of how much you invest, but how well you invest.
Early this year, we took the extremely important, and also hard and difficult decision to actually lean into the need to change, to make sure that we invest wisely and at the right spots. We could have had a great time at earnings together.
Yeah. Exactly.
after strong results and a good outlook for the coming year. We decided to lean in, now we have the right capacity at the right points in our portfolio where it can add value. We will continue to be very disciplined, and we'll focus on the quality of who and what we take on board.
Yes
in order to drive the continued success of our innovation portfolio. The second point, there is a distinction in what we are doing now in our commitment from a capital allocation perspective. We have formalized it in a written policy. That means, at a point where we'd consider and contemplate a change, we would need to update the policy and update you. I think that should give you a lot of comfort that we're really seriously focused on driving our strategy for the next few years in the way we have set it.
Thank you. The next question comes from Ross MacMillan. I see Kirk Materne here and then Stefan Slowinski.
Thanks. Ross MacMillan from RBC. Actually, just back on S4, maybe a question for Christian and Adaire. Are there any incremental catalysts that you see that would increase the value prop for customers and incent them to move faster? I'm thinking about things like infusing AI into S4 or even whether hyperscale might add a catalyst. I'm curious your comments on that. Then just one for Luka. As you think about the cloud portfolio in 2023, if we broke down the business between ATS, Business Network, and C/4 today, which is going to have to be the biggest incremental grower, if you will, over the next five years? I'm just curious to get your.
color on that. Thanks.
I'll go first. Maybe you.
Yep.
Thanks, Ross. I think from the point of view of infusing the S/4 portfolio with differentiated value that creates that underpinning strong business case for the move, we're certainly doing that from the point of view of the product portfolio. It isn't simply a like for like, but it's embedding in that product portfolio. Christian can speak to it to a greater degree of specificity. AI algorithms, other elements that introduce entirely new processes that augment businesses in a way that adds distinct value and therefore augments and underpins that business case. Christian can speak to the specificity of those developments in a moment. Of course, there is absolutely the opportunity through the program that Jen mentioned, around Embrace with the hyperscalers, to actually create a value-based package that incorporates some of the innovation in those different hyperscaler platforms.
That, again, that takes a holistic picture of the move potential for S/4 in the context of those particular environments. We're pretty excited about that opportunity and how we can grow that.
To build on that, when I also showed earlier about what we are doing on the S/4HANA side together with Jen's team and together with Juergen's team, see, this integration work, at the end, the customers are not buying AI, they buy intelligent business processes-
Yes
from SAP. When we are now building, for example, a native integration into Analytics Cloud, which we announced here at Sapphire between S/4, guess how many bundled deals we will sell in the future then via Adaire's team to our customers by doing real-time steering with analytics, tightly integrated without any data replication together with S/4. The same is doing Jen with SuccessFactors. There will be an upsell potential by just bundling our products in a much better way going forward. Then second, I talked about how AI can make our processes more automated in procure to pay, but also much more intelligent. I just can recommend to visit also our digital supply chain and manufacturing space here.
There you can see how we make the assets more intelligent with IoT scenarios to really connect the asset on the shop floor to the new business models in the ERP. This really also helps customers to really also much better infuse the intelligence into their supply chain. These are all the scenarios. This year we ship over 100 AI use cases only within S/4, and there is much more value coming also on our roadmap than in the remainder of the year.
Just very quickly on the incremental growth drivers across the three segments. The biggest one will be customer and experience management, followed by ATS, then what we will probably call the intelligent spend segment, which today is known as business networks.
One more point, because you asked for catalysts and drivers. Today we launched SAP Data Intelligence. If you look at statistics, 85% of machine learning projects never make it to production. We already shipped more than 100 into our standard applications. All the tough learnings that we took from data preparation until lifecycle management and data lineage and proving to the FDA which training data went into the model, that we compressed and have this new offering, SAP Data Intelligence. We use that internally, and we also offer it to our customers.
Thank you. Two more questions. Kirk first, and then we have Stefan.
Thanks very much. Kirk Materne with Evercore ISI. Last year, Bill, you were just starting to frame out some of this customer experience opportunity for yourself. You didn't have Qualtrics. I'm just kind of curious how the nature of the discussions that you and Jennifer are maybe having today have changed. The reason I ask that is when people think about digital transformation, a lot of times it starts from the outside in, meaning you're talking about how you change the customer experience. That's where there seems to be a lot of dollars being thrown. When you think about the pie that you're going after today from an operational budget perspective versus just going after the IT budget-
Right
Can you just kind of frame that out and how those discussions have changed? Thanks.
Sure. I'll let Jen kick us off, and then I'll be happy to build and make sure we give you a complete answer. Thank you for the question.
That's a big part of my focus right now with my partner over here, Zig. I completely agree with you. The way I think of it is, we've got a great portfolio of assets in C/4, absolutely. Each of those assets are wonderful on their own. As a suite, there's a broader value proposition. I think more importantly, what Qualtrics does is allow us to move out of what may be perceived as a me-too or differentiated only by ERP to a different playground, which is really experience management. In explaining and helping people understand that experience management, yes, it starts with a consumer, but the connectivity of that consumer all the way into the company is really, really key.
For us, we see it as a completely new category that we can more broadly define, and you'll hear more about that from us in the next couple of months.
When I think about this whole experience management, this whole Qualtrics story, why is it that I think it's the redefinition of a lot of business processes? Let's just take one example to keep it simple.
If you're a sales director, you might care a lot about your pipeline, your forecast, and the participation rate of your sales team. Systems of record today, whether it's ours or perhaps even someone else's, do a good job of that. Unfortunately, if you're the CEO, you care not only about the intake valve of how you're growing revenue, you care a lot about the retention rates in your business, and you care a lot about the systemic pulse check or the in-process measures on a relationship. Unfortunately, a sales representative, even a call center, they tend to activate a relationship when it's up for its expiration. It's like, "Hey, you want to renew? I'm back." And the customer's like, "Where you been all my life?" Right?
With Qualtrics, the conversation is ongoing, and the longitudinal algorithm that's been established, and the computers and what they learn, are actually activating intelligent business motions for you and with you. Keep in mind, in almost any industry, in almost any business model, a 5% improvement in retention drives 995% improvement in profit. You see, that's a CEO talking, not a sales director. The systems of record are fine for the sales director and other participants on a management team. Qualtrics takes you to an entirely new level. I'll give you another example on Qualtrics. We should never put Qualtrics in only one box. Zig knows this very well.
If you take the employees and you think about recruit to retire and the talent war that's in the global economy, my goodness, the experience and the roadmap of human capital and applying an unreal one-to-one mass personalization at scale relationship with employees from the time you try to find them, ultimately to the time that they get their gold button and you thank them for their 40 years of service. That should be an amazing journey. The CEO is thinking like that. The head of HR or the head of recruiting might be thinking of, "What's my pipeline? How quickly can I fill the jobs to get them off my back?" It's a totally different headset. Qualtrics redefines cultures. That's why we love it so much. Our culture and everyone else's culture. That's where we're coming from.
Let's see how it goes, but if I was making a decision on a system of record competing with SAP, I'd have to think long and hard about pressing that order button without hearing this completeness of vision story from SAP, particularly now that Qualtrics is in the mix. I think we're going to stir up quite a bit of interest in the market with this.
Thank you, Bill. The last question from Stefan Slowinski.
Yes. Hi, thank you. Stefan Slowinski, Exane BNP Paribas. Two quick ones for Luka. On the potential for shareholder returns and buybacks, can you talk about how that process is working, how you're evaluating that? I think you have around EUR 9 billion of net debt today. Is that maybe a level that you want to keep flat going forward, or is it more on a net debt to EBITDA basis that you may consider, how to structure that in the future? Secondly, on software sales, the guidance implies, I think, minus mid to high single digit over the coming five years. Are you still comfortable with that? Given some of the recent strength, do you see that there could be upside risk to the software outlook? Thank you.
On the second question, yes, I start to become uncomfortable with this because there might be upside risk to it. No, seriously speaking, I think we have set the right ambition level on which we are modeling the rest of the P&L. If software happens to be more resilient than we are planning, then that's goodness that comes as an upside to our plan. You cannot neglect that there are outside of the core and outside of digital supply chain management, there are clearly forces at play that shift those businesses to the cloud. Therefore, I think it's prudent to retain this planning posture, then see whether we can continue the positive march that you have seen in the last few years. If so, that should be positive news.
Secondly, on the capital returns and share buybacks, as we have said, we will be in a position to give a more clear outline at the special capital markets day. This requires also the involvement of our governance body, we will discuss the opportunities that we have with our supervisory board over the course of the coming months. What is very important to understand is that from an overarching perspective of how we look at our returns strategy, there is not really a fundamental change. We will continue to make sure that we appropriately invest in those areas where we need to. Clearly, our needs for capital expenditure investments will come down due to the strategy that we have outlined. There will be some need, of course. We will continue to pay an increasing dividend in line with our dividend policy.
We will continue to appropriately fund the very successful work of our Sapphire Ventures capital fund, that is already returning every quarter high double-digit millions in incremental finance income. There is no reason to throttle that down at all. We will continue to deleverage in line with the long-term commitments that we have made. Therefore, our view and thinking around capital returns is let the profitability that will build up over the coming years create the opportunity for increased returns. Then we will see at what level we will be comfortable to drive these returns. More to come. I don't want to steal the thunder of November. Then you would all not come, and that would be very unfortunate, as we're really in for a great show.
Well said.
Bill, do you want to build on it or have a final thought?
No, I don't want to build. I think Luka said all that fantastic. Are we still taking questions?
I think we are done with the questions.
If we're getting ready to wrap, I just want to be able to say a few words, if that's okay.
Yeah.
If you're getting ready to wrap up, I'm fine to keep going. What do you want to do?
This is up to the audience. Maybe we have time for one or two more questions here.
I have a couple.
This comes as a surprise. Let's see. I see Charles Brennan and Stacy Pollard. Maybe ladies first.
Yeah, she's been very patient. She had her hand up at the very beginning.
Thank you. Stacy Pollard with JP Morgan. Two quick ones, a little bit of follow-up on the last one. I believe you said your TAM was EUR 350 billion, growing double digit. The EUR 35 billion target seems conservative overall as, by memory, it's closer to 6%-7% CAGR. Not just on software, but you think overall there's a bigger opportunity. Second question would really be for Bill. To what degree are you incentivizing your management around the new operating margin targets, and does that include comp plan, things like that?
Sure. Bill, you want to take it?
Yeah. First of all, let's be clear. The TAM that we are addressing is not one that includes services business, for example. That is part of the total revenue. When you take a look at the CAGR that we are expecting in our cloud business, that is clearly above the total expansion of the addressable market that we are seeing. Our business will progressively happen more in the cloud, which is good news, and there we will certainly continue to gain market share. Therefore, comparing the growth of the TAM with the entire total revenue, including our services business, does not fully reflect our position. We will continue to gain market share.
We're about to have a leadership offsite in Provo, Utah. We're bringing all the leaders of the company together in Provo, Utah, because I wanted them all to feel the Qualtrics culture, to understand what we're dealing with here. We're dealing with a tiger, and we need to let it out of the cage. It's going to start a revolution within SAP management. Here's the idea on the margin. First of all, this team here has shared values and common goals. You have full alignment on the one point on average margin improvement on a per annum basis. That's locked and loaded. We already have all the expense ratios, the headcount ratios, and the targets, especially on cloud gross margin and other items, aligned in the system. We know the lines that can't be crossed to achieve our goals at the top.
Perhaps, even more interesting is we have technology, strategy, and efficiency committee at the top of the company. We have operating reviews led by myself and the executive board. We are all committed to this, and I personally care deeply about this. It's not just a financial initiative, it's an operational excellence initiative. We are the best version of ourself. We acknowledge that we are a rarity in the enterprise application software marketplace. No company is growing in the core and the cloud the way that we are. At the same time, we're also in a rare business model moment because we could actually expand the expense base of the company by 40% over the next five years and still deliver the five-point improvement in operating margin. We're not talking about an austerity thing here.
We're talking about putting the investments on an organic basis where they most belong, so we can drive executional excellence with our customers, with our partners, and with our shareholders. That's really what we're doing. We have a fired up company. Everybody knows it's time. The other piece, we listen to you. We surveyed you after the capital markets day, and you came back six out of 10. You're like, "Hey, we love the revenue story. Nobody grows like SAP. We believe strongly that 17th most valuable brand in the world is doing a great job. Could you just give us some leverage on the margin?" It's coming to a theater near you. We are aligned. Is there anybody, by a show of hands, who's aligned on this?
Hey, what about you?
Yeah.
Raise your hand.
Finally, if I could, on this market cap scenario, what we did as a planning exercise, we basically took the median average of cloud-based software companies and the valuations that they're getting around 10x of their revenues. We basically said, if we're EUR 20 billion coming out of 2023, if you times that by 10, that's EUR 200 billion. If you take our core business and it's EUR 20 billion, and you have a 4x to 5x, depending on the company you want to talk about, you would basically say 20 times five is EUR 100 billion. If you take EUR 200 billion plus EUR 100 billion, you get to EUR 300 billion. That's where that came from, and that's now a rallying cry within the company, not just because we keep score, although we do. Winners do keep score. Also because people are fired up now in service to our shareholders as well.
We feel like it's the time, after all the hard work we've done for the last 10 years, to make sure the leverage is in there for the shareholder value creation of the company. I personally think that's a very good thing.
Okay. Let's take the question from Charlie, please.
Hi. It's Charlie Brennan here from Credit Suisse. Just two quick ones, actually. Firstly, you've spoken a lot about the hyperscalers in the area of infrastructure, but a number of the SIs have been talking about increasingly competitive software offerings. Can you just talk about how you see the likes of Google and Amazon playing in the analytics and database market, and how you see them as competitors? Secondly, Luka, just a very gentle finance question. You commented on how much focus investors are putting on free cash flow. Are you going to provide us with any kind of free cash flow targets or cash conversion targets when you come to the capital markets day?
You want to?
I can.
Thank you.
You guys. I'll start, then I think Jen and Juergen would like to build on the hyperscaler part of the question, then we'll move over to Luka and the team on this side. First of all, I think that, again, the rarity of SAP is pretty unique. For example, if you look at Google Cloud Platform, you have Thomas, who's a very smart operator, running the Google Cloud Platform, his stated goal is to partner with SAP in the enterprise with our reference architecture and our suite to expand their business dramatically. To that end, our dear colleague, Rob Enslin, is now running sales as the president for the Google Cloud Platform. I think that speaks for itself.
If you look at Amazon, when Juergen and Jared and Hasso announced this database-as-a-service, they did so on the AWS platform, which I think also speaks volumes. We have literally thousands of companies now in the pipeline to go on the hyperscale cloud of, for example, the AWS' or the Google Cloud Platform. That should also speak volumes for Andy Jassy and Jeff Bezos and the very fond position they have towards SAP. Finally, on Azure, it should be duly noted that Microsoft and Satya Nadella, who's a great friend and a super partner, so too is his management team. With this management team, we did the Open Data Initiative together at Ignite, really connecting the data in a business process seamlessly on Azure.
We've had a long-standing friendship, I believe it should be clear to everybody, the biggest pipeline right now in the enterprise for hyperscalers is in fact on Microsoft Azure. Then finally, I saw another company in our industry did a layoff today in China.
We're doing great in China. Like, China's second home to SAP. Perhaps we'll be doing some extra hiring now. If you go to Jack Ma and Daniel Zhang at Alibaba and our reference architecture and the expansion throughout the ASEAN region, especially in China, SAP is the best idea that Alibaba has. I say this to you because it's strategic. This is the strategy we embarked upon, these are the partners that we have, and this is the trust level that we have built with very large, great brands, superbly run companies. Might there be an overlap of some functionality somewhere along the way? Could be. We live in that world now with people that partner with us, as you said, in the SI community, and it certainly hasn't hurt the practices that they're building around SAP.
One such example with Qualtrics, now they're throwing up giant experience management practices with the large firms like Deloitte and Accenture, and now IBM Global Services. In the past, Qualtrics did a fantastic job without that scale and without these practices, without these large SI firms. This is a very interesting thing. We have 100,000 women and men of consequence in 190 countries that work for SAP, but we have 2 million people in the ecosystem that have a badge that in some way support the SAP brand. When we light the fuse, it goes global real fast.
Specific to the question on the SIs and the hyperscalers. What we saw on the customer base is they had so many voices, right? The hyperscalers are having one conversation, the SIs are having another, and we're in there talking about the intelligent enterprise. The customers are left piecing it together. To address exactly the question you want, how do I know what I should be using for certain services from an Azure versus SAP? This reference architecture does exactly the problem statement that you just pointed out. When you look at that reference architecture, what are the set of services by SAP that will be leveraged by the customer and that we provide as part of that architecture? What are the services that we know our customers are going to want to use from an AWS or an Azure in one instance?
Those reference architectures are very clearly defined so that that will be very consistent in how they hear it and how they experience it from us and the hyperscalers directly. That allows us to do two things. Number one, we really believe that the growth these hyperscalers are seeing and that flywheel effect, that market force is going to be a tailwind to what we are trying to do with S/4. It will accelerate the S/4 move and other innovation, number one. I think, the second thing is it will give clarity to the SIs in terms of what they will focus on and what they will work on. We had yesterday, the kind of kitchen cabinet of advisor customers on both the AWS side as well as the Azure side, as one example, to go through all those specifics. We are excited because this is ready to show up.
It is on the price list in terms of what that looks like. The services are ready. The SIs, we have brought them all through it as well. They love it because now they have that clarity and can put their own differentiation around it.
I can be even more specific on platform as a service offerings from hyperscalers. Here, we analyzed that in depth and have a white paper that is distributed to all 30,000 people in development. Which services we are differentiating SAP services and services where we compete, because take Analytics Cloud, which we offer and show today, take data warehouse in the cloud. These are things where we create business value for customers, and we are even competing. We do that in a very transparent way, and we talk about that with all the hyperscalers, and we all accept that. It is a bit more complex world where coopetition is very good. We also have a clear list of services where we want to partner. Today, we not only announced these things, but we also announced an IoT collaboration with Microsoft Azure.
Sorry, we went GA with the collaboration with Microsoft Azure, also we announced the collaboration with AWS. Is it super business critical for us to have the device connectivity and update, like with every firmware update, there is this there, with every sensor change that happens? Should SAP do all the work of adjusting that? No. When it becomes a business relevant event, then it has to be in the SAP ecosystem. This is how we are very transparent and clear internally and also externally, what we think is core to SAP, and we will protect that core. Where we can leverage all the great things and the scale that hyperscalers bring. That is a very collaborative collaboration and very good work that we are doing with them.
Then just very quickly to round this up on the free cash flow question. Yes, I intend to give you guys, when we meet in November, a clearer indicative frame and ambition for our free cash flow development for the next couple of years. There's one factor in there, on which we will need to work with scenarios and ranges. That's the share-based compensation. That, from a cash payout perspective, obviously depends on the share price movement. That's something that, of course, we can influence but not fully control. Apart from that, you will get much greater visibility into this than perhaps in the past.
We care a lot about free cash flow, as evidenced by the progress that we made in the first quarter. You should have seen the CapEx and the manner in which we're using resources we've already invested in and making sure we get the full yield out of them without just automatically buying more. There's a lot of discipline right now around that because we really want to focus more and more on free cash flow. We know it's important to you.
Very good. I think this concludes our financial analyst conference for today. Thank you all for joining us here in the big room. We'll continue now with small group meetings and look forward to seeing you tonight at 8:00 P.M. at the investor reception. Thank you so much.
Thank you very much, everybody.
Thank you.
Thank you.