Stefan Gruber – Head, IR Bill McDermott - CEO Luka Mucic – CFO Robert Enslin - President, Global Customer Operations Bernd Leukert – Head of Product & Innovation

Adam Wood - Morgan Stanley Gerardus Vos - Barclays Mohammed Moawalla - Goldman Sachs Mark Moerdler - Sanford Bernstein John King - Merrill Lynch Phil Winslow - Credit Suisse Rick Sherlund - Nomura Ross MacMillan - RBC Capital Markets Knut Woller - Baader Bank

Ladies and gentlemen, thank you for standing by. This is your Chorus Call operator. Welcome to SAP 2014 Third Quarter Earnings Results Conference Call. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session. (Operator Instructions)

Good morning or good afternoon. This is Stefan Gruber, SAP Investor Relations. Thank you all for joining us to discuss our results for the third quarter 2014. I’m joined by Co-CEO, Bill McDermott and Luka Mucic, CFO, who will both make opening remarks on the call today. Also Executive Board Members, Rob Enslin, who leads Global Customer Operations and Bernd Leukert who leads production innovation are on the call and will join us for the Q&A. Before they get started, I would like to say a few words about forward-looking statements. Any statements made during this call that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as anticipate, believe, estimate, expect, forecast, intend, may, plan, project, predict, should, outlook and will and similar expressions as they relate to SAP are intended to identify such forward-looking statements. SAP undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect SAP’s future financial results are discussed more fully in SAP’s filings with the SEC, including SAP’s Annual Report on Form 20-F for 2013, filed with the SEC on March 21, 2014. Participants of this call are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. Please keep in mind that unless otherwise noted, all numbers referred to on this conference call are non-IFRS and growth rates are non-IFRS as reported. With that, I would like to turn the call over to Bill McDermott.

Thank you, Stefan, and thanks to everyone on the call for your time today. Over the past three quarters, we have accelerated SAP's aggressive strategy to help customers run simple. This has been made possible by a unique combination of the broadest cloud portfolio in the industry, the world's largest business network, and especially the great simplifier SAP HANA. In the third quarter, the momentum continued as we delivered very strong growth of 41% in cloud revenue. Our cloud revenue run rate has ramped up to US$1.7 billion. The order entry of new cloud business signed in Q3 exceeded one-third of license revenue. Let's be clear, if you are only looking at traditional license revenue, you're missing this transformation. Once the planned acquisition of Concur is completed later this year, we expect the share of cloud business will be even higher. Meanwhile, our total predictable revenue, including maintenance was 62% in Q3, up from 53% 3 years ago when we started this transition. This clearly indicates that we are rapidly shifting to high growth and more predictable revenue. I would like to emphasize this significant message to everyone on this call today, while less upfront revenue pressures margin in the short term, we expect higher profitability in the long-term due to the greater efficiency and the more recurring nature of the cloud model. Despite the accelerated shift to ratable revenues, we saw third quarter software and software related service revenue come in solidly within our annual guidance range, increasing 7% in Q3 with year-to-date growth of 8% at constant currencies. When you consider additional overall performance indicators, such as Interbrand’s recent ranking of SAP as the 25th most valuable brand in the world ahead of consumer brands like Facebook and Ikea, it’s clear that with our ever consistent strategy and our high trust global brand reputation, SAP has never been in a stronger position to continue driving the transformation of the business software industry. Now, I'd like to provide some color on the key growth drivers. The industry's transformation to the cloud is no longer news. Today, the news is that the SAP Cloud powered by HANA is the standard for depth, breadth, and the largest business network in the world. SAP is the only company with the portfolio to manage all key resources on one cloud platform; permanent employees, flexible workers, goods, services, and with the planned acquisition of Concur, travel and expenses, no competitor can do this. SAP is leading next-generation customer engagement and serving the customer on any device in any channel with the hybris omni-channel e-commerce platform in combination with Cloud for Sales. This business contributed yet another quarter of triple-digit growth. In fact, Gartner rates SAP hybris as a Magic Quadrant leader in digital commerce ahead of both IBM and Oracle for the first time. And customers recognize this value. TUI Travel, a leading international travel group shows SAP Cloud for customer solutions over Salesforce.com to engage more effectively with its customers and increase customer service across all channels. In combination with SAP HANA Enterprise Cloud, TUI Travel can manage a world of structured and unstructured customer data and has an unprecedented view of every customer in the future. ,: SAP's 43 years of leadership and mission critical systems is well known. Now with hybris, SAP also has a real-time customer engagement and commerce platform, driving incremental sales and growth for our customers. You can't do effective customer engagement without an end-to-end order-to-cash process that connects predicting of customer needs to commerce and fulfillment. No CEO I speak with is interested in Salesforce automation solutions to solve yesterday's administrative challenges. They are hungry for growth in an increasingly global and competitive environment, and only SAP solutions for customer engagement and commerce can deliver. The other big CEO agenda is the ability to manage their talent and workforce more effectively. This is not just about managing full time employees, but also the contingent workforce and crowd sourced labor. The combination of SuccessFactors in Fieldglass provides the unique solution that cannot be matched by Workday. Our SuccessFactors product is now rated as the leader in core HR management and the latest Forrester Wave outperforming Oracle Fusion HR. We are seeing strong growth to SuccessFactors in APJ and EMEA that shows the international strength of our SuccessFactors business. : SAP's 43 years of leadership and mission critical systems is well known. Now with hybris, SAP also has a real-time customer engagement and commerce platform, driving incremental sales and growth for our customers. You can't do effective customer engagement without an end-to-end order-to-cash process that connects predicting of customer needs to commerce and fulfillment. No CEO I speak with is interested in Salesforce automation solutions to solve yesterday's administrative challenges. They are hungry for growth in an increasingly global and competitive environment, and only SAP solutions for customer engagement and commerce can deliver. The other big CEO agenda is the ability to manage their talent and workforce more effectively. This is not just about managing full time employees, but also the contingent workforce and crowd sourced labor. The combination of SuccessFactors in Fieldglass provides the unique solution that cannot be matched by Workday. Our SuccessFactors product is now rated as the leader in core HR management and the latest Forrester Wave outperforming Oracle Fusion HR. We are seeing strong growth to SuccessFactors in APJ and EMEA that shows the international strength of our SuccessFactors business. : SAP is also leveraging its deep industry experience by building the deepest and broadest industry cloud portfolio. I would note that our industry DNA was a crucial value proposition in our long-term growth performance. We believe this will remain our competitive advantage as companies look for domain expertise in their specific industry in the cloud. : SAP is also leveraging its deep industry experience by building the deepest and broadest industry cloud portfolio. I would note that our industry DNA was a crucial value proposition in our long-term growth performance. We believe this will remain our competitive advantage as companies look for domain expertise in their specific industry in the cloud. : Let me give you some examples of customers moving their business to the SAP Cloud. Singapore Telecommunications Limited, a telco company with 500 plus million subscribers, an existing SAP customer selected SuccessFactors Human Capital Management suite, including Employee Central along with SAP Jam and SAP Cloud for travel to help them simply their IT infrastructure and drive their people transformation agenda. : Coming back to our core theme of Run simple, it’s clear that customers recognize the fast time to value advantages of consuming solutions in the cloud. This leads to me to the other central aspect of our growth strategy SAP HANA. : Coming back to our core theme of Run simple, it’s clear that customers recognize the fast time to value advantages of consuming solutions in the cloud. This leads to me to the other central aspect of our growth strategy SAP HANA. : To put this in perspective, we now have more suite on HANA customers then work day’s total number of customers. This also shows that while suite on HANA is already an explosive growth story, we are yet in the early stages of the multi-year growth opportunity. : For example, NTUC FairPrice, the largest supermarket chain in Singapore will simplify their overall architecture reduce TCO and accelerate the performance of their SAP system by replacing Oracle with HANA's in-memory database, suite on HANA will deliver a platform of growth and innovation, while lowering cost for NTUC FairPrice. : SAP Simple Finance in the cloud will provide instant insight, of course financial and operational processes to help the university drive value through planning, analysis, prediction and stimulation. : : : : : In addition, over 1600 startups worldwide are building on HANA and many of these applications are commercially available today. Overall customer interest in HANA is increasing fast. According to Google trends, the interest for HANA has grown 71%. Despite a lot of noise coming out of some recent tech trade shows, Oracle Exadata only grew 3% by the same measure. So it’s clear that the momentum and credibility are with SAP HANA. : : : : Concur will provide another very significant network opportunity. This is about much more then having the market leading travel and expense solution. Concur is about adding to the 1.2 trillion corporate travel market an ecosystem to the business network, accelerating the network effect. Each new customer brings many more trading partners and related commerce to the network enabling SAP to scale revenues at lower cost compared to a traditional cloud business. With the unique combination of Ariba, Fieldglass, Concur and HANA at the core, SAP will also be able to deliver 360 degree business intelligence and predictive insights across all transactions, across all major category to spend all in real time. So to summarize, we believe the future of business will run in the cloud on the SAP HANA platform and over the business network, SAP Cloud plus HANA, plus Network equals simple. : Before I hand it over to Luka, allow me to present a few details on the regions starting with EMEA. SAP had here another solid performance in EMEA despite uncertainties in the Ukraine and the Middle East. In EMEA, cloud transaction entrant – traction was exceptional beating the competition with cloud subscriptions and support revenue growing close to 60%. Software and software related service revenue increased by 8% year-over-year. Germany also saw a strong performance in both software and cloud subscription revenue. The America's regions saw a mix performance in Latin America, similar to other companies in the industry. SAP is seeing more difficult macro and political environment in Latin America, in particular in Brazil and Argentina combined with some execution issues. In the America's software and software related service revenue increased by 5% year-over-year and cloud subscriptions and support revenue grew 34%. The company had a very strong performance in APJ, software and software related service revenue grew by 10%, cloud subscriptions and support revenue grew by 57% and SAP achieved a turnaround in its business in Japan with solid double-digit growth. As Luka will shortly explain in more detail, with the powerful shift – shift to the cloud and stronger than expected organic cloud performance, we are once again raising the cloud outlook, while adjusting the operating income range to reflect less upfront and more subscription revenue. To summarize, we are delivering on our one simple strategy with faster growth in cloud, HANA and the business network. And we strongly believe our momentum will continue. Finally, I'd like to thank our more than 68,800 SAP employees; whose commitment to helping our customers we best run amazes me everyday. Thank you. Now, I'd like to turn the call over to Luka. Luka?

: So let me now provide some additional color on our financials. I will start with the Cloud business. We saw fast growth in the cloud of cloud subscriptions and support revenue up 41% year-over-year. Calculated cloud billings increased 51% year-over-year. Deferred cloud subscriptions and support revenue was €498 million of September 30, a year-over-year increase of 30%. We also saw our new cloud business ramp up significantly relative to license revenue, as Bill mentioned, our total order entry for the new business in the cloud was more than 1/3rd of software license revenue in the third quarter 2014, that’s up significantly from a year ago. Not only are we ramping up our cloud business, but we continued to have a stable and growing core with solid significant growth in software and support revenue. 8% growth in support revenue was certainly again a highlight and it has been growing strongly like that for a number of quarters now. Our support contract renewal rate is consistently in the high 90% range. Growth in Enterprise support and premium support was especially strong. And once again, our enterprise support offering had an adoption rate in the high 90% range and continues to be the de-facto standard. As a consequence, we continue to lift the share of highly predictable cloud and support revenue. As Bill has mentioned before, the total of support revenue, as well cloud subscriptions and support revenue as a share of total revenue increased by 3 percentage point’s year-over-year to 62% in the third quarter of 2014. So as Bill already highlighted, we are seeing a very powerful mix shift to high growth more predictable revenue. This shift leads to large impression in the short term, which is simply a function of growing the cloud business at an accelerated pace, up from cloud sales and delivery cost increased as we signed more cloud deals, but revenues comes later, longer term though we see higher cloud profitability as we gain higher economies of scale with our cloud offerings. : As a result, our overall gross margin was 72.1%, a decrease of 40 basis points year-over-year. Despite the transformation of our business toward less upfront and more ratable revenue though, we were able to expand our operating profit by 5% in Q3, while our total operating margin was down only slightly. So let me emphasize this. We are managing this transformation which is stable to our business and very high growth rates in the cloud, while staying fiscally responsibly and expanding our operating profit. SAP is unique in being able to drive a combination of extremely strong cloud topline growth and expanding profit all at the same time. Our non-IFRS earnings per share was $0.84, up from $0.78 per share in the third quarter of 2013, resulting an 8% growth. This was also driven by the tax rate, which was slightly lower than we expected. The IFRS tax rate in the third quarter was 26.5%, almost year-on-year, while the non-IFRS tax rate in the third quarter was 27.7%, up 10 basis points year-over-year. As we see this trend solidifying, although we are maintaining our effective tax rate outlook range for the full year, we now actually expect to be at the lower end of that range. And now to cash flow and liquidity. Operating cash flow for the first nine months was €3.08 billion, up by 1% year-over-year, which was a strong result considering that whereby making the settlement payment for the Versata litigation. Our net debt position was at €1 billion, an improvement of more than €450 million compared to the end of 2013. As you've seen from the earnings release, we are updating our outlook for the full year. Based on the strong momentum in our cloud business, we are raising our cloud outlook again for the second time this year and now expect full year non-IFRS cloud subscriptions and support revenue to be in the range of between €1.04 to €1.07 billion at constant currencies. We continue to expect full year non-IFRS software and software related services revenue to increase by 6% to 8% at constant currencies. With the customer driven mix shift, and upfront to cloud subscription revenue, we now expect full year non-IFRS operating profit to be in range of between €5.6 billion to €5.8 billion at constant currencies. We expect the fast growing cloud business, along with growth in support revenue will drive a higher proportion of more predictable revenue in the future. And finally on currencies, SAP experienced negative effects from currency translation in the first half of the year which dissipated in the third quarter and are now expected to turn positive in the fourth quarter of 2014. We have to model this, if exchange rates remained at the September 2014 level for the rest of year, we would expect non-IFRS software and software related service revenue and non-IFRS operating profit growth rates of actual currency to both experience a positive currency at impact of approximately 3 percentage points for the fourth quarter of 2014. It would still be a negative currency effect of approximately 1 percentage points a new trillion tech [ph] respectively from both items for the full year 2014. So to summarize this again, we are confident this powerful shift will continue to drive solid topline growth, at the same time higher predictability and in the future higher profit for our shareholders. Thank you very much. And Bill and I will now be happy to take your questions, as well as the rest of the colleagues here around the table.

Thank you. Operator, you can now start the Q&A session please.

Thank you. Ladies and gentlemen, at this time, we will begin the question-and-answer session. (Operator Instructions) And our first question today comes from the line of Adam of Morgan Stanley. Please go ahead. Adam Wood - Morgan Stanley: : And then secondly, as we think about the profitability, obviously there is a reduction this year because of that accelerated cloud transformation. As we think out to 2017 and the phasing of this, if that strength in cloud continues, should we maybe expect the pace of margin expansion to be weighted more towards the end of that period rather than the beginning? Thank you. : And then secondly, as we think about the profitability, obviously there is a reduction this year because of that accelerated cloud transformation. As we think out to 2017 and the phasing of this, if that strength in cloud continues, should we maybe expect the pace of margin expansion to be weighted more towards the end of that period rather than the beginning? Thank you.

: Clearly, HANA Enterprise Cloud is now picking up, and from a revenue perspective due to the lagging effect of cloud revenue recognition, you don’t see this so tremendously in those revenue figures, so there it’s clearly mostly still coming from our public cloud solution portfolio. But in terms of our bookings performance, HANA Enterprise Cloud is already a strong contributor, although you don’t see it in deferred revenue as quickly as on the public cloud because the setup timing on HANA Enterprise Cloud is longer, and therefore our time to billing is also slightly longer than in our public cloud portfolio. In terms of you know, and the contribution of our cloud business to margins and the impact of 2017 targets, bare with us, we will want to end the year hopefully on a strong note, then we'll see our -- the cloud acceleration will continue, and then we will basically guide you also including the impact of a material acquisition of Concur to hopefully have closed by then on the implications on our mid term guidance.

Adam, I would simply build on what Luka is saying by adding just a couple of thoughts, one is the integrated enterprise that’s now coming through in the cloud. You'll remember the Y2K transition, when the Best of Breed were best at something, but they didn’t breed, and it didn’t work long-term. We’re back there again, only now the battle is in the cloud. So the core is moving to the cloud, the line of business already is in the cloud in companies that have HANA in-memory platform for beautiful user experience with Fiori and can integrate these assets across the enterprise will win, and SAP will be a winner. So, I think about the quarter to cloud in the integrated enterprises as a major theme. We recently read a report that one of the competitions out in Northern California mentioned or certainly touted to 30% improvement in the pipe in the cloud, that’s interesting but our 80% is even more interesting. : Adam Wood - Morgan Stanley: Thank you.

Thank you.

Let’s move to the next question please.

And our next question comes from the line of Gerardus Vos of Barclays. Please go ahead. Gerardus Vos - Barclays: Hi, good afternoon. Thanks for taking my question. Just first of all, maybe if you could give some color around kind of macro weakness, have you've seen anything coming through in any kind of regions? Then secondly, just coming back on the prior question regarding the kind of profit reduction, if you just give – can give a little bit more kind of granularity, how much is really driven by kind of the mix, how much is impacted by perhaps a different kind of revenue stream coming through in the cloud with HANA Enterprise cloud which clearly required a bit more setup and also datacenters. : And then just one final question, on kind of Latin America, clearly now Q2 was already very tough for that kind of region, it looks that Q3 had a further step down despite the impact from the World Cup and dropping out, what is happening there and you mentioned execution, what are you guys doing there? Thank you.

Well, thank you very much for the question, I'll start it and of course Luka as he wishes can jump in as well. On the macro weakness, I think the Ukraine matter in the Middle East on the rest is been well publicized and I think Brazil and Argentina are not just SAP issues we've seen this somewhat consistent across other significant IT companies as well. Having said that, I do want to point out that we have execution issues in Latin America and we dealt with them decisively firmly. And we're going to prove it [inaudible] back in charge of Latin America in addition to the alliance organization to provide the appropriate level of leadership there. We generally take actions when action is required. The other thing you said, in terms of the profit, I think its important to recognize had we taken that upfront revenue instead of putting into ratable continued increase in our cloud guidance, you wouldn’t have a 5:6 to 5:8 story, you have a 5:8 to 6 story. We recognized it and stretch it over a little top – longer time horizon. But again, there is nothing happening here mathematically, it is in consistent with the high growth cloud company because if we chose to drop it to the bottom line on an upfront perpetual basis we wouldn’t have even done an adjustment. But then again we might not have gained though all that market share and in the de-facto standard in memory cloud winner when you look at the company 5 years from and were building a company for the ages. So I think you should start thinking about the company in terms of growth in the cloud, solid in the core SRS and then operating income, expansion in absolute terms. One of the things I did want to mention also, is the HANA Enterprise Cloud Investments have been made in a large extent, but also we recognize the importance of spreading our footprint with great partnerships like the one we announced with IBM. And if you think about a reference architecture on HANA using someone else’s infrastructure as a service, it’s a very nice way to expand our presence in the software industry, solve the customers problems and do so in a more profitable way for SAP. So we're looking at all these cylinders and we're firing ahead on all these cylinders for growth.

Yeah, I mean, there is not a lots to be added here, its very clear that and when you try to look at our all margin profile, we continue to act very fiscally responsible on G&A expenses, also on the sales and marketing side we more or less have a situation without a big change on the margin profile. So the main change comes from SRRS margin and here its clearly combination of the delaying revenue recognition for more cloud revenues then we had thought about as a relative share to upfront licenses, as well then especially in the HANA Enterprise Cloud the additional set up costs. As Bill had alluded to we believe in the future through partnerships like the one IBM we will be able to utilize the infrastructure as a service offerings from IBM and concentrate really on the application management layer on top and driving our SAS revenues in that combination which is good for both partners and will help us with CapEx investments going into next year. Gerardus Vos - Barclays: Okay.

Thank you. Gerardus Vos - Barclays: Thank you.

And the next question please?

: Mohammed Moawalla - Goldman Sachs: Thank you very much. Look I wondered if you can just explain the kind of relationships between the billings and the subscription growth in the P&L. We saw a bit of disconnect this quarter, is this one-off effect or should we see more normal progression going forward? Thank you very much.

: First, this is a combined metric of a P&L metric and a balance sheet metric because we are adding the revenue of the current quarter to the change in deferred revenues which is obviously a balance sheet item. And while we are – basically measure all the constant currency figure on the revenue using the average exchange rates basically as a comparison, on the balance sheet item of deferred revenues we're taking a look at the difference between the closing and the opening balance of the current quarter, as well as the ending balance of the previous years quarter based on the currency exchange rate that existed at the starting point of the preceding quarter. So then you can get into a perfect storm if you have a situation like the one we had this time, where in Q3 last year we had substantial appreciation of the euro versus the US dollar and remember most of the deferred revenue balance is that we have in there are from the US and are denominated in US dollars. And this year we had exactly the opposite effect of a substantial strength in bringing up the US dollar. So put in a different way you could also see a positive that most of the realization of these deferred revenues and actual revenues as there are in US dollars assuming that the currencies will stay where they are today, will actually result in greater revenues that we see then in the P&L. So that maybe an explanation on why the discrepancy between actual and constant currencies is so huge on those figure. Now the other important element, is I said the HANA Enterprise Cloud, I mean, meanwhile while we don’t see it substantial revenue contribution at the HANA Enterprise Cloud due to effect that these goal lies you know have in many cases just taken place a few months ago are still in process of taking place. It is a huge part of our order entry that we have. So it’s already noticeable there. However in the HANA Enterprise Cloud due to the effect that we are migrating more complex industry specific, mission-critical scenarios to our infrastructure, it simply takes longer there than in the public cloud for our customers so to go live. And remember; only when we are live we can start to build and therefore also recognize the deferred revenue on the balance sheet. So that’s the main reason for the disconnect there and as the HANA Enterprise Cloud I think gets a bigger portion of our business, initially you may see a similar effect. However this should level outspend as the HANA Enterprise Cloud becomes a pervasive part of our ongoing business; both from an order enter as well as revenue recognition perspective. I hope that’s clear but it’s a complex topic. I apologize. Mohammed Moawalla - Goldman Sachs: Right. So we should this as more of an anomaly this particular quarter?

Yeah, in the combination definitely because the constant currency calculation was really extreme this time due to the big apprehension of the euro last year and then of the US dollar this year. Mohammed Moawalla - Goldman Sachs: Great. Thank you very much.

Thank you. Let's take the next question please?

And our next question comes from the line of Mark Moerdler of Sanford Bernstein. Please go ahead. Mark Moerdler - Sanford Bernstein: Thank you. Can you hear me?

Yes. We can hear you. Please go ahead, Mark. Mark Moerdler - Sanford Bernstein: Excellent. So, again two cloud questions on, follow up so. The first is I'd like to clarify in the deferred cloud subscription and support growth, the reason just want to confirm, the reason its growing 30% in deferred while cloud is growing 41 is the fact that procurement network is usage build not build significantly in advance is that correct?

Yeah, definitely. I mean, that’s how – this was true both the user business network, as well as for Fieldglass. Mark Moerdler - Sanford Bernstein: Okay. So, then – that’s we won't see the deferred grow as fast as revenue because of procurement?

Yeah, exactly. Mark Moerdler - Sanford Bernstein: The second question is, in terms of how you're expensing all the cloud cost, all of the delivery costs and some of the sale and marketing etcetera. You're expensing those as you incur them not capitalizing them on a cloud side, correct?

That’s correct for the delivery cost and its correct also for a good portion of the sales and marketing expenses. There are certain bonus plans in some parts of the world which were allowed to capitalize them, but it’s not the case for example for our bonus plans here in Germany and in many European markets. Mark Moerdler - Sanford Bernstein: : : :

Exactly. So we have a – first year impact there, but already as of the second year our cloud contracts are actually showing a very decent profitability, so the more we add to a new business the higher the profitability will get, but of course this does not prevent us to go for as much a new business as we can, because that then in the long run allows us to even better capitalize on the investment that we have made in cloud delivery and lowered our backend infrastructure with as many users as we can. Mark Moerdler - Sanford Bernstein: Perfect. Excellent. I really appreciate. Thank you.

Thank you. Let's take next question please?

And our next question comes from the line of John King of Merrill Lynch. Please go ahead. John King - Merrill Lynch: Great. Thanks very much for taking the questions. Bill you said in the opening remarks the license to cloud shift is accelerating and that’s obviously in evidence, that’s an accretive shift for the long-term, but the shorter term as you look out into 2015, 2016, the more you shift the cloud, the more the EPS, as you’re obviously going to be dragged down a little bit. :

Sure, John. Thank you very much. So the license to the cloud move I think you're going to see a pretty consistent drum beat from what we're getting use to right now. There seems to be the rhythm that the customer wants us to operate in and there is still very viable on premise business, you'll see that in the SRS numbers as we guide forward. There is an outstanding cloud business and on the EDGE side of it, it’s probably about 25% of the revenues. It will be bigger on the core as you start thinking about moving the core to the cloud which is I think a real big competitive advantage for SAP. And then, obviously when Luka and I do guidance in January we'll have a lot to say about our growth, but I think what you'll hear from us is very strong growth in the cloud, a continued March forward is the cloud company [Inaudible] you'll hear very solid SRS offer related services and you'll hear very solid operating income in the expansion there-off. Its clear to us that there is lot of market share to be won the cloud, its clear to us that we have the solutions that the customers wants, and its clear to us as we have very high renewable revenue and we have very low cost to sale on the cloud. The operating income expansion can follow that as well. And that’s kind of the way we're guiding the company. We're going for growth. John King - Merrill Lynch: Very clear. Thank you.

Thank you. Let's move to the next question please.

And our next question comes from the line of Phil Winslow of Credit Suisse. Please go ahead. Philip Winslow - Credit Suisse: Hey, guys. Thanks guys for taking my question. Thanks for the commentary and just the color you guys gave about the just the geographies in Q3. I was hoping you could expand on that in terms of your Q4 guidance, obviously there’s been a lot of in the press about, potential macro economic weakness in Europe and Germany, as well as some the economies of Asia so. What don’t we just talk about sort of what you saw over the course of Q3 as you head into Q4 and then as you get in the Q4 guidance sort of how you incorporated that into your conversion rates or pipeline etcetera those assumptions that you're making? Thanks.

Yeah, thank you very much Phil for the question. As you know and we covered earlier, the global macro economics scenarios was you know pretty well known by all. Keep in mind we have a very special brand in EMEA and in spite of the turbulence we performed extremely well and we anticipate that to continue. If you look at Latin America, I mentioned the Brazil and Argentina situation, and also execution with better execution, I expect some tailwind coming back into Latin America no doubt in my mind. : And in America you know, I am really felling good about the pipeline, I’m really feeling good about our cloud business and I am really feeling like we have stable consistent core on the SRS side. So in spite of the global turbulence and the things that you're hearing I feel that SAP is extremely well positioned to execute in any environment, but even in this environment. : And if the customer wants to rent it and they want on a ratable deal, I think that’s the advantage of the shareholder and if the customer wants to put it on premise and they want to own the asset because they look at it as a capital assets of their business they want to keep for long-term they should have the right to do that. So I really feel like this is very nice rhythm and a very nice balance and I feel very confident in the pipeline. I also want to go on record of saying a couple of things. We had a some media reports about some notification on expenses if you'll notice Luke and I've been saying every quarter, we're actually increasing the number of jobs in the company and we now have 68,800 colleagues. We started the year more close to 65,000. So we are coring the expenses because we already did all the hiring we needed to do. So that was a misinterpretation and in terms of the pipeline I've stated the pipeline in the cloud and in the core and they’re both very robust in and strong. And things I really like the most is we're having a field day with Salesforce.com with omni-channel, e-commerce and cloud to customer absolute field day. So I am not surprised that their sales director would want to talk about us. And on work day I think its fascinating how SuccessFactors is now highly rated in the eyes of Gartner and Forrester and with Feildglass bolted on so the contingent workforce which is fast as growing I think we have a great story to tell against work day and needless to say we continue to win with HANA against Oracle even though we're completed open to all partners. So I really like the fact that the company is growing for growth with a clear vision and clear strategy and I think its work in every environment. Philip Winslow - Credit Suisse: Great. Thanks. Best of luck into Q4.

Thank you.

Thank you. Next question please.

And our next question comes from the line of Rick Sherlund of Nomura. Please go ahead. Rick Sherlund - Nomura: Yeah, thank you. For Bill and Bernd, I wondered if you could talk for moment about the simple suite. And maybe help us understand the positioning of this. So where does it stand now and going out to next year versus the business suite on HANA, how do you think the market reception at simple suite, what's the positioning and how excited should we about the potential for simple suite next year?

: So first on one simple, complexity is the most interactable CEO issue of our generation. We have all the stats and facts to prove that more than 10% to 15% of operating profits of every company we talk to is being destroyed by the very complexity. So that’s why I think on move with HANA we see already with the cloud and the business network is all about run simple. We are putting our money where our mouth is. And the other thing is, we never said that that we're simple enough, we're not simple enough either. But we are road mapping a beautiful story for simple and it set the heart of your question, its started with simple finance and now Bernd's going to tell you how we're re-factoring the entire suite on HANA to change the world. Bernd?

Yeah. Thanks, Bill and thanks Rick for the question. So first of all just to repeat that our functionality is the richest and the best-in-class of all business we did – available on the market. And this functionality has undergone a significant transformation already leveraging the power of HANA as we speak today. And the business suite but as well all the industry applications runs a day on HANA and are available in the HANA Enterprise Cloud. So we are proud that not an individual industry is missing across our 25 industries and across all our line of business. Now as we move forward facing HANA market tendency enabled, we do not believe that providing these core applications in the cloud can only be provided. But revising every single line of code and disrupt the business as some other friends do, it would be even naïve to simply revise everything and opt our customers to right off all the investments they have done into SAP and convince them to go at disruptive path forward. That’s why we have chosen the much modest relative in place alignment and collaboration with our customers and user groups over the last couple of years already. ]: As to outlined already, there is clear tendency that business we are going to the cloud and we will offer customers on proper state to run their complete businesses on the HANA Enterprise Cloud as we speak already today even including all the mission critical processes, all their enhancements and all their innovations. Now going forward, we will go beyond that. We are now optimizing all applications and maximize the advantage of HANA to the maximum extent. Simply finance is the first of these applications which we have launched to the market. This will be followed by a series of additional line of business applications, like material management, inventory management and so on. Ultimately all the core processes which are available today in ERP will then be available in a simple versions and then again just to repeat that an easy path to go from the current solution in the non-disruptive way to the future. : So its not a single milestone where we ask our customers even in a disruptive way to move from today's world into the future by decomposing the complete ERP into simple innovation with pre defined delivered integration content its up to the customers to chose the area they want to start ultimately without loosing the cohesiveness and the comprehensive businesses which we have. Rick Sherlund - Nomura: Thank you.

I think we now have time for two more questions. Operator, please go ahead.

And our next question comes from the line of Ross MacMillan of RBC Capital Markets. Please go ahead. Ross MacMillan - RBC Capital Markets: : And then second, on the cloud gross margin, obviously there’s a lot of investment here including around HANA Enterprise Cloud, look I was just curious as to when you think we might see that plateau and sort of trough if you will, now that we're at 60% gross margin on cloud, are we close to that trough? Thanks. : And then second, on the cloud gross margin, obviously there’s a lot of investment here including around HANA Enterprise Cloud, look I was just curious as to when you think we might see that plateau and sort of trough if you will, now that we're at 60% gross margin on cloud, are we close to that trough? Thanks.

Yeah. And I will take both questions if I may. So first of all on the total order entry, this is what you would call total contract value, or TCV. So basically if you have so we have typically three year contract in the cloud then you would take this three year value and that’s total contract value and so all of the new cloud contracts that we sold was more than one third of the license revenue figure. On the investment into cloud delivery and infrastructure, I am fully with you. I think guided at the – in July at our earnings call and that we would see a half year to cloud margins improvement run, over half year one. Now SAP already in the cloud is quite a big truck so to say, so when you start to pull in the brakes it still goes for a while and that’s what you have seen in Q3 and now with the IBM partnership in place with the let say, can you remind us that -- I have given to the organization in terms of the limitation of further expense increases. I think we are seeing this plateau and I do not expect Q4 on cloud delivery margins to further drop. Ross MacMillan - RBC Capital Markets: Okay. Thank you.

Let’s take the last question please.

And our next question comes from the line of Knut Woller of Baader Bank. Please go ahead. Knut Woller - Baader Bank.: Yeah, thank you. Just a quick one maybe for Luka as a follow up. You were mentioning on the services gross margins this year impacted and you expected to continue to be under pressure due to the shift to the cloud and to change of the business model, and do you expect to see a margin recovery then for that business line in 2015 that’s it? Thank you.

Yeah. Thank you, Knut. I mean, as we said we are undergoing a complete business combination between our coinciding organization and our active globally support organization will take effect as of January next year. We will act then with one combined service catalog across all of our service teams. We will also cross fertilize the two different departments and groups. We will focus our service catalog on those services that are driving high software to service ratio, the higher between of standardized productized services as AGS for many years a successfully driven and delivered for our customers as you can also on the high growth rate that we are posting on our premium support engagement and with that I think we will optimize the contribution of our services business across the board and combining the classic -- business and with our [SSRS] business and that one for sure will have positive effects for SAP and going into 2015. Knut Woller - Baader Bank.: Great. Thank you.

Thank you very much. This completes our third quarter earnings call for today. Thank you all for joining and good bye.

Ladies and gentlemen, this concludes the SAP 2014 third quarter earnings conference call. Thank you for joining. You may now disconnect.