Fueled by strong sales of cloud-based software that more than offset a decline in revenue from on-premises applications, SAP revenue jumped in the third quarter compared to the year-earlier period.\n\nTotal revenue for the quarter ending Sept. 30 was \u20ac7.84 billion (US$7.72 billion), up 15%, according to company's quarterly financial report, released Tuesday. SAP\u2019s cloud and software revenue for the quarter rose 14% to \u20ac6.71 billion. \n\nCloud revenue alone rose 38% to \u20ac3.28 billion. Revenue for the company\u2019s S\/4HANA cloud-based ERP offering, in particular, nearly doubled, rising 98% to \u20ac546 million.\n\nSAP results benefited from the strong US dollar, as dollar sales were converted to euros\u2014for example, overall revenue growth in constant currency terms, which exclude the effect of currency fluctuations, was 5% rather than the nominal 15%.\n\nNevertheless, the uptick in cloud sales is good news for SAP, since the company has been pushing customers to migrate from its legacy Business Suite 7, which is usually run on-premises, ever since S\/4HANA was launched in 2015. Selling cloud software and services is good business for SAP and other software providers, since, among other things, cloud subscriptions provide a more predictable revenue stream than renewals of licenses for on-premises applications. \u00a0\n\nDespite the jump in revenue, SAP posted a 1% dip in operating profit to \u20ac1.239 billion due largely to rising costs in areas including research and development, sales and marketing, and the need for more outlay on the maintenance of the company\u2019s cloud services. Licenses for on-premises software declined 38% to \u20ac406 million, reflecting customer migration to cloud-based software.\n\nUnsurprisingly, the Germany-based software giant was most eager to talk about its success in the cloud.\n\n\u201cThe trust in SAP is reflected in our accelerating cloud momentum,\u201d said CEO Christian Klein in the company's earnings press release. \u201cIt\u2019s clear that our transformation has reached an important inflection point, paving the way for continued growth in the future.\u201d\n\nDespite the negative news on operating profit, investors greeted SAP\u2019s results warmly, with the company\u2019s share price rising $5.69\u2014or 6.25%\u2014to $96.70 in mid-afternoon trading in the US. \n\nLike much of the tech sector, SAP is facing headwinds caused by the ripple effects of Russia\u2019s invasion of Ukraine, as well as a bearish economic climate. Hence, the positive news on the company\u2019s cloud business appears to have been enough to inspire confidence in SAP\u2019s overall outlook.\n\nSAP has made major headway on its transition from a license- and maintenance-based business to a usage-based, cloud-first company, due in part to a long string of acquisitions in the past decade in addition to the introduction of S\/4HANA, which brings the company\u2019s ERP platform to the public cloud of the customer\u2019s choice.\n\nHowever, the company has a long way to go. Just 12% of current and intended SAP ERP users in the US and Europe responding to a recent survey by digital transformation services provider LeanIX have completed the transition to S\/4HANA. Another 12% said they have postponed the start of their move to S\/4HANA, and 74% of enterprises that were polled are just at the evaluation and planning phase of their ERP migration.