SAP CEO Christian Klein refuted the "SaaSpocalypse" narrative, arguing that AI agents require ERP systems like SAP as their "brain" for context. He highlighted SAP's shift to non-seat-based cloud revenue and new AI tools to support customers layering agents onto existing systems.
AI giants Anthropic and OpenAI are set to dominate future cloud revenues, reportedly accounting for half of a massive $2 trillion backlog. These companies' substantial, multi-year spending commitments, reaching hundreds of billions, are significantly shaping the financial outlook for major cloud providers like Google, Amazon, and Microsoft, highlighting a massive shift in infrastructure demand.
Anthropic's $200B, 5-year deal with Google and similar AI startup-cloud provider agreements project a $2T revenue backlog for Amazon, Google, Microsoft, and Oracle by leveraging AI growth dependencies.
Atlassian shares jumped more than 28% on Friday after the software company reported fiscal third quarter earnings that exceeded Wall Street expectations, with EPS of $1.75 versus $1.32 expected and revenue of $1.79 billion versus $1.69 billion expected. Cloud revenue rose 29% year over year to $1.13 billion, while data center revenue came in at $561 million, both beating analyst estimates. CEO Mike Cannon-Brookes stated the company saw incredible strength and that concerns about AI disruption to the software sector may be overblown. The stock had been among the hardest hit by the 'SaaS-pocalypse' this year, down more than 45% year to date before the rally.
Alibaba's cloud and AI division is projected to see accelerated revenue growth in the March quarter, driven by rising token usage and recent service price increases.
