SAP's Dual Push: European Cloud Sovereignty and a Billion-Euro Bet on Structured Data

SAP's RISE with SAP heads to STACKIT, Prior Labs acquisition targets tabular AI, cloud backlog rises 27% — but the stock stays 26% below its 52-week high.

SAP spent the past several weeks building out two very different sides of its business — one aimed at European cloud independence, the other at owning the AI infrastructure layer beneath enterprise processes. On the commercial front, Schwarz Digits, the IT arm of the Schwarz Group, confirmed that RISE with SAP will become commercially available on its own STACKIT cloud platform, with technical provisioning slated to begin in November. According to Schwarz Digits' own — as yet unverified — claims, STACKIT is the only European hyperscaler offering RISE with SAP. Certification took roughly eighteen months, and SAP has reportedly committed to price parity with US providers. STACKIT itself handles more than 1,000 IT services daily for the Schwarz Group's retail divisions, including Lidl, Kaufland and PreZero.

The arrangement carries weight beyond a routine technical footnote. Cloud sovereignty has been a live political issue in Europe for months, and an offering that runs RISE with SAP entirely within European infrastructure should appeal to customers wary of US hyperscalers for regulatory or strategic reasons. It feeds directly into the recurring debate over Europe's technological dependence on American cloud providers.

A Billion-Euro Wager on Tabular Foundation Models

While the STACKIT deal addresses where SAP's software runs, a separate move targets what powers it. On 17 July, the Walldorf-based group closed its acquisition of Prior Labs, a pioneer in so-called tabular foundation models — systems designed to work directly on structured business data rather than being trained on text like conventional language models. SAP said it will invest more than one billion euros over the next four years to turn Prior Labs into a world-leading frontier AI lab for structured data.

The ambition is plain: SAP does not intend to remain merely a software vendor for enterprise processes but to control the underlying AI infrastructure for those processes itself. The deal forms part of a string of acquisitions broadening its cloud and AI portfolio — the largest since the multi-billion-euro Qualtrics transaction of 2018.

Fashion Week as a Showcase for Enterprise Tech

SAP's push into new territory also has a consumer-facing dimension. At New York Fashion Week, the company unveiled a Retail Innovation Lab linking store experiences with its enterprise systems, co-innovating with fashion brand RE/DONE. The appearance is meant to demonstrate how SAP technology can operate in retail beyond classic back-office processes — a signal to consumer goods and fashion clients that the group's AI strategy can prove itself in direct customer contact as well. Analysts at Simply Wall St put the stock's fair value at 207 euros, while flagging risks from complex migration projects, high costs and security questions in implementing such systems.

Customer Wins and a Cloud Backlog That Keeps Growing

Alongside the strategic repositioning, SAP continues to collect prominent reference customers. On Monday the group announced that Lockheed Martin is modernizing its HR processes with SAP SuccessFactors solutions — a win underscoring that SAP keeps gaining ground in the fiercely contested HR software segment. Earlier, at the start of September, industrial supplier HARTING advanced its cloud transformation with RISE with SAP, another example of SAP migrating established mid-market customers to the cloud.

Those signings fit a picture already sketched by the latest quarterly figures: the cloud backlog rose 27 percent in the second quarter to 22.9 billion euros, while cloud revenue grew 24 percent at constant currency. SAP updated its profit guidance for the current year accordingly, now expecting a non-IFRS operating profit of 11.8 to 12.2 billion euros — despite a dilution effect of more than 100 million euros from the Dremio and Prior Labs acquisitions.

Regulatory Clarity and a Talent Spillover

On the regulatory side, SAP has also gained certainty: the European Commission concluded its review of maintenance and support policies for on-premise solutions, a development the company explicitly welcomed. The review had stirred uncertainty for months, particularly among existing customers running classic SAP systems who feared tougher terms.

A further development speaks indirectly to the group's innovative reach. Rouven Morato, former Chief Data & Analytics Officer at SAP Germany, and Ramin Mirza, previously Head of Platform & Technologies at SAP, founded the startup RM Impact in St. Leon-Rot. It aims to place an AI layer over existing systems such as SAP, Salesforce and HubSpot, initially for sales teams at mid-sized companies with 200 to 2,000 employees. Such spin-offs show how strongly the SAP ecosystem now generates AI applications beyond the group itself.

The Stock Stays Under Pressure

For all the operational news, the share price remains weighed down. The stock traded at 178.50 euros on Friday, up 0.8 percent on the day, but sits 26 percent below its 52-week high of 242.00 euros. On a weekly basis it lost 3.5 percent, and since the start of the year it is down 15 percent. Over a twelve-month horizon the decline amounts to 19 percent, while the title has recovered 40 percent from its 52-week low of 127.52 euros. The shares currently trade about 7.7 percent above their 50-day moving average.

The new partnerships with Schwarz Digits and the Fashion Week presence do little to change that in the short term, though they could strengthen SAP's positioning as a European cloud and AI provider over the medium haul. What emerges is a group building its strategy on several levels at once — technologically through the Prior Labs AI investment, commercially through new large-customer contracts, and regulatorily through the completed EU review. That operational substance from cloud growth and AI investment now faces a market valuation that has only partly rewarded the company's transformation.