The WHO has warned that Europe risks becoming the epicentre of the pandemic, assuming the unwelcome mantra from Latin America. But Europe’s difficulties extend beyond Covid-19.
In early August, the head of SAP warned that Europe had to raise its game otherwise it would fall further behind the US and China. The EU is planning to build its own network of cloud computing services (Gaia-X) that will be protected by law, and will (in theory) compete with Amazon, Microsoft (Azure) and Alphabet. However, it will be a long road. The big three in the US, and Alibaba in China, have a big (possibly insurmountable) lead.
SAP scrapped its profit target for this year on Monday and warned that restrictions imposed by governments to combat Covid-19 would impact business well into 2021. For a software company, blaming Covid-19 seems rather odd. Software companies have for the most part seen their revenues rise and share prices soar this year. The S&P 500 software index has climbed 35.1% this year, even after Monday’s ‘correction’. The problem for SAP – Europe’s largest software company – is not Covid-19, but its inability to compete with the US big three. One third of SAP’s revenues come from the US. SAP admitted yesterday that it was two years behind in meeting its goals to boost revenue from cloud services.
Summary
• Wrong to blame Covid-19 restrictions
• Big delays in cloud services issue for SAP
• Covid-19 not the only issue for Europe
