Edward Snowden’s revelations about the National Security Agency may have embarrassed the Obama administration and irritated governments worldwide, but Jim Hagemann Snabe says the furor has been good for business. Snabe is co-chief executive officer of German software company SAP (SAP), the world’s biggest maker of business management software, and he says customers are focusing more on SAP’s ability to provide data security outside the U.S. Snabe spoke with Bloomberg Businessweek today after SAP announced a 5 percent increase in operating profit and reiterated its full-year forecasts, reassuring investors worried after disappointing results from rivals Oracle (ORCL) and IBM (IBM).
Why do you think the attention to the NSA and its surveillance programs have helped SAP?
As you can see in the quarter, our cloud biz is really exploding, with more than 160 percent growth. That is in the same quarter as all the uncertainty around cloud security came up. I think the best way to read that is when companies look for their suppliers in the cloud, they are going to well-established companies they trust, not smaller companies where they don’t know exactly where the data is. So I actually believe that this increased focus on cloud security has become a reason for SAP to win in the market, and we are seeing that in the numbers this quarter.
Do customers want their data stored outside the U.S.?
I think we have the benefit of offering local data centers in all regions, and therefore companies feel comfortable in outsourcing their infrastructure to SAP. What we do see is countries want to make sure the data—in particular, the public sector data which can be very mission-critical—they want to have control under the legal rules of the country, and that’s why they are asking if we are willing to set up data centers in these geographies. And the answer is yes, if there is an interest.
Because of worries about the security of data in the U.S., following the reports of what the NSA has been doing?
I wouldn’t say it like that. What they are saying is, we want to make sure the data and the data center is treated according to the legal rules of data protection that we have in our country. That’s what they are requesting. And because of our size and our investments in the cloud, we can guarantee that. Most others can’t. You know, we grew up in the complexity of multiple countries and multiple currencies and multiple languages in Europe, so we know how to do localization, including how to live up to individual rules for data protection in each country.