SAP SE (SAP): ANSOFF MATRIX [Dec-2025 Updated]

You're looking for a clear map of SAP SE's growth trajectory, and the Ansoff Matrix is the perfect lens to simplify their complex cloud and AI strategy into four actionable pillars. Honestly, the quick math on their ambition is what matters: they are targeting non-IFRS operating profit toward the upper end of €10.3 billion to €10.6 billion in 2025, primarily fueled by cloud growth that aims for a €21.6 billion low-end forecast. To see exactly how they plan to pull that off-whether it's accelerating the 63% of ECC customers still on-prem, embedding Joule AI into 100% of key tasks, or making strategic M&A moves like the August 2025 SmartRecruiters integration-you need to dive into the specific plays below.

SAP SE (SAP) - Ansoff Matrix: Market Penetration

You're looking at how SAP SE (SAP) can drive growth by selling more of its existing cloud solutions into its current customer base. This is the core of market penetration, and for SAP SE (SAP), it means pushing the S/4HANA Cloud transition hard.

The immediate focus is on the remaining installed base of the legacy system. Out of the original 35,000 SAP ECC customers, only about 39% had licensed S/4HANA by the end of Q4 2024. This leaves a massive opportunity, aligning with the strategic goal to accelerate migration of the remaining 63% of ECC customers to S/4HANA Cloud. To be fair, this migration is complex, with projects taking an average of one and a half years for those surveyed.

To capture this base, SAP SE (SAP) is intensifying sales of RISE with SAP, which is the primary vehicle for large enterprise cloud adoption. The company is guiding toward the lower end of its 2025 cloud revenue forecast, aiming for €21.6 billion. This focus on the existing customer base through RISE with SAP is crucial for hitting that target, especially since the current cloud backlog, a measure of future subscription revenue, stood at €18.84 billion at the end of Q3 2025.

A key challenge within this penetration strategy is shifting customer preference toward the pure cloud model. You need to increase adoption of S/4HANA Public Cloud, which only 30% of surveyed organizations currently prefer [cite: User Provided Data Point]. This suggests a significant portion of the remaining ECC customers, or even existing S/4HANA on-premise users, are still leaning toward private cloud or hybrid models, which saw their popularity double between 2024 and 2025 (from 9% to 18%).

To overcome this hesitation, SAP SE (SAP) must offer aggressive incentives for existing customers to adopt the full suite of cloud services, not just the core ERP. This means making the value proposition of the entire cloud portfolio-beyond just the core system-irresistible. Here's a quick look at the platform that underpins this extensibility:

Driving higher utilization of SAP Business Technology Platform (BTP) within the current customer base is a direct lever for market penetration. BTP is becoming central to modernization efforts; 55% of ASUG members now use SAP BTP. Furthermore, 73% of those BTP users are leveraging it specifically for an SAP S/4HANA transformation. This platform integration helps customers build out custom capabilities and integrations, which is vital for locking in the full value of the cloud ERP subscription.

The actions required to push this penetration look like this:

• Secure commitments from the 63% of ECC customers still on the legacy system.
• Drive cloud revenue toward the €21.6 billion low-end forecast for 2025.
• Incentivize migration to S/4HANA Public Cloud over private options.
• Increase BTP utilization to deepen platform stickiness.
• Ensure incentives are aggressive enough to overcome the 30% preference gap for Public Cloud.

Finance: draft 13-week cash view by Friday.

SAP SE (SAP) - Ansoff Matrix: Market Development

You're looking at how SAP SE can take its existing, proven ERP solutions into new territories and customer segments. That's Market Development in a nutshell, and for SAP SE, the focus is clearly on regions and company sizes where their footprint isn't yet dominant.

The Asia-Pacific (APAC) region is a prime example of a new geographic market where the growth story is compelling. We're seeing a significant acceleration there compared to more mature markets like North America. Honestly, if you're looking for where the next wave of enterprise software adoption is coming from, APAC is it.

This 14% Compound Annual Growth Rate (CAGR) for APAC ERP software is a clear signal to double down on regional sales and support structures.

Next up is targeting the mid-market and Small to Midsize Business (SMB) segment globally through the GROW with SAP program. SAP SE has made it clear that starting in January 2025, this segment is a massive strategic priority, moving away from relying solely on direct sales teams for these territories. The intent is to use this program to make S/4HANA Cloud, public edition, more accessible to net-new customers, typically those employing fewer than 2,000 people and generating between $100 million and $1 billion in annual revenue.

The expansion is designed to be partner-led, which helps SAP SE scale without immediately ballooning its direct headcount in these segments. You're seeing a commitment to deploy the same benefits SAP promises its applications can deliver-more automation, less friction-into how SAP SE itself serves the mid-market.

• GROW with SAP includes S/4HANA Cloud, public edition.
• It bundles SAP Business Technology Platform (BTP).
• It incorporates preconfigured industry best practices.
• It offers accelerated deployment services.

To truly open up new geographic markets, localization is non-negotiable; you can't sell an ERP system globally if it can't handle local tax and statutory reporting. SAP S/4HANA Cloud, Public Edition, has out-of-the-box localization for about 60 countries/regions. Still, for those markets without a standard delivered version, the Configuration Localization Tool (CLT) is key. This tool lets partners and customers copy a template, like Germany's configuration, to build out local compliance for about 160 countries that aren't natively supported.

This self-service approach to localization is what allows SAP SE to enter markets like those in emerging economies without waiting for a full, standard release cycle. It's about using frameworks to adapt the core product quickly to meet country-specific or provincial legal regulations.

Finally, scaling implementation capacity in these emerging markets hinges on the partner ecosystem. The reality is that 77% of S/4HANA migrations are partner-led, creating a huge addressable market for system integrators (SIs) who can handle the migration and optimization. The global SAP S/4HANA Systems Integrator Services market itself was valued at $18.97 billion in 2025, showing the scale of the services required to drive this cloud adoption. Partnering decisively with regional SIs that have deep local knowledge is how SAP SE ensures it can meet the demand for cloud implementation capacity without overextending its own professional services arm.

Finance: draft 13-week cash view by Friday.

SAP SE (SAP) - Ansoff Matrix: Product Development

You're looking at how SAP SE is pushing new products into its existing customer base-the core of Product Development in the Ansoff Matrix. This is all about embedding intelligence directly into the software you already run, like S/4HANA Cloud.

The primary focus here is the generative AI copilot, Joule. The plan is to embed Joule generative AI copilot into 100% of the most-used tasks across the SAP suite to enhance user productivity.

SAP SE has a clear, aggressive roadmap for rolling out these intelligent capabilities.

• Launch over 400 new AI features by the end of 2025, including specialized Joule Agents for finance and supply chain.
• The AI expansion builds on existing capabilities, with SAP reporting over 2,100 Joule Skills already available, which will be augmented by 40 Joule Agents by the end of 2025.
• Introduce the Joule Studio skill builder in Q3 2025, allowing developers to create custom, low-code AI agents, with general availability for creating custom AI agents planned for Q4 2025.

The integration of these new AI-assisted capabilities into core products is where you see immediate, measurable gains. Take Master Data Governance (MDG) on SAP S/4HANA Cloud Private Edition, for example. Using Joule for central governance processes shows concrete efficiency improvements:

These numbers reflect the direct financial benefit of making complex data governance tasks simpler through natural language interaction.

SAP SE is also deepening product relevance by developing industry-specific cloud solutions, with manufacturing and retail sectors currently leading AI adoption within SAP environments.

To put the scale of the AI investment into perspective against the company's overall financial performance in 2025, consider this snapshot based on Q2 2025 results and targets:

The success of this product development strategy is already showing up in the financials; cloud revenue growth was reported at 24% in Q2 2025.

The company is also enhancing developer tools to support this push, with new capabilities in SAP Build, including SQL generation in SAP Build Code with Joule.

• Joule supports 11 languages, including English, German, French, Spanish, Portuguese, Japanese, Korean, Chinese, Vietnamese, Greek, and Polish.
• The bidirectional integration with Microsoft 365 Copilot is planned with the first step for general availability in Q2 2025, and the full integration bringing Microsoft 365 Copilot capabilities into Joule expected in Q3 2025.

Finance: draft 13-week cash view by Friday.

SAP SE (SAP) - Ansoff Matrix: Diversification

You're looking at how SAP SE is aggressively moving beyond its core ERP base, which is the definition of diversification in the Ansoff Matrix. This isn't just about selling more existing software; it's about launching entirely new product categories or entering new markets via acquisition and new service creation. Here's the quick math on the four major thrusts for 2025.

Talent Acquisition Product Line Expansion via SmartRecruiters

The August 2025 agreement to acquire SmartRecruiters, completed in September 2025, directly targets a new, specialized layer within Human Capital Management (HCM). This move aims to capture more of the talent acquisition spend, which is central to enterprise transformation in the age of AI, as noted by industry observers. SmartRecruiters, which was last valued at an estimated $1.5 billion during its 2021 Series E funding, brings a platform serving over 4,000 organizations globally, including major names like Amazon, Visa, and McDonald's Corp. For context, SAP's cloud revenue growth in its second quarter of 2025 was up 28 percent in constant currencies, reaching €5.13 billion (U.S. $6.02 billion). This acquisition is designed to bolster the SAP SuccessFactors suite, helping customers manage the entire hiring lifecycle from sourcing to onboarding with enhanced AI capabilities.

Digital Adoption Platform (DAP) Market Entry via WalkMe

SAP finalized the purchase of WalkMe in November 2025 for a stated price of $1.5 billion in an all-cash transaction. This is a clear diversification into the Digital Adoption Platform (DAP) space, targeting non-traditional IT buyers who need guidance within complex software. The goal is to improve user experience and accelerate the adoption of core platforms like SAP S/4HANA Cloud. This move complements existing transformation tools like SAP Signavio and SAP LeanIX. The broader Cloud ERP Market, which SAP heavily influences, is projected to grow to $176.93 billion by 2032 from $48.63 billion in 2024, showing the massive potential for a platform that ensures software value realization.

Subscription-Based Data Monetization Service

The launch of SAP Business Data Cloud in February 2025 sets the stage for a dedicated, subscription-based service focused on external enterprise data sharing. This platform unifies and governs SAP and third-party data, natively including the Databricks Data Intelligence Platform. During the pre-launch beta program, customers reported benefits across the board, including a 20 to 50 percent improvement in data models. This service is positioned to accelerate data and AI projects by offering curated data products, which eliminates the high costs of data extraction and replication. SAP's overall 2025 cloud revenue outlook remains strong, forecasted to reach between €21.6 billion and €21.9 billion (U.S. $25.38 billion to U.S. $25.73 billion).

New Financial Services Offering with SAP Taulia

Leveraging the majority stake acquisition of Taulia (now SAP Taulia), SAP is expanding its working capital management offerings to a broader network of buyers, suppliers, and financial institutions. The integration has yielded concrete financial metrics. The platform empowers millions of businesses, with over $800B flowing through it annually. This directly helps suppliers by enabling them to get paid nearly 49 days earlier on average. Furthermore, some of the largest customers are realizing over $50M+ in annual savings from the AI-powered financial solutions. New SAP Taulia solutions for receivables financing and payables financing were released on SAP Cloud ERP in February 2025, directly serving small to midsize enterprises needing quicker payments to grow.

Here is a snapshot of the financial scale and key metrics associated with these diversification vectors as of 2025 data:

The integration of these distinct capabilities shows SAP is targeting high-growth, adjacent enterprise software categories. You'll want Finance to track the initial subscription revenue contribution from the Business Data Cloud in the Q4 2025 report, specifically looking for a breakout line item. Finance: draft 13-week cash view by Friday.