SAP’s increased focus on cloud operations allowed it to again soar above the COVID-19 uncertainty during its second fiscal quarter of 2020. The vendor also said it will float a portion of its Qualtrics customer experience business to further heighten its bottom line.

SAP’s revenues increased 2% year over year to $7.9 billion. That growth was solely on the back of its cloud operations, which posted a 21% year-over-year increase in revenues and offset a slight decline in its software license and support business. Both of those metrics mimicked what SAP reported in Q1, with its cloud operations offsetting a drop in licensing and support.

The vendor last year implemented a strategic operational review that included a greater focus on its cloud business. That move also included plans to slash its reliance on Oracle’s cloud infrastructure and broaden partnerships with cloud hyperscalers Microsoft, Amazon Web Services (AWS), and Google.

Despite the dip in its software licensing business, SAP’s management explained that the company did witness improved operational performance as the quarter progressed. “Software licenses revenue, while still below normal levels, recovered more than expected,” it explained as part of its quarterly statement.

SAP’s profits increased a more substantial 52% year over year to $1.04 billion.

The vendor did maintain its previous full-year guidance that included lowering its revenues expectations by nearly 5% and operating profits by 8% due to uncertainty around the COVID-19 pandemic. It noted that "the outlook continues to be based on the assumption of a gradually improving demand environment in the third and fourth quarter, expecting further reopening of economies and easing of population lockdowns."

SAP also reported that it will float a minority interest in its Qualtrics division through an initial public offering (IPO) in a move to “capture its full market potential” and provide Qualtrics with an easier path to expanding business outside of its parent company. SAP’s Qualtrics business posted a 34% year-over-year increase in revenues to $198 million in Q2.

SAP CEO Christian Klein explained that the move would provide Qualtics “the greatest opportunity … to grow the experience management category, serve its customers, explore its own acquisition strategy, and continue building the best talent. SAP will remain Qualtrics’ largest and most important go-to-market and research and development partner while giving Qualtrics greater independence to broaden its base by partnering and building out the entire experience management ecosystem.”

SAP said it will retain majority ownership of Qualtrics and “has no intention of spinning off or otherwise divesting its majority ownership interest.” It added that Qualtrics CEO Ryan Smith would remain the largest individual shareholder of Qualtrics.

SAP acquired Qualtrics for $8 billion in late 2018 on the cusp of the latter moving toward a public offering. Smith at that time said the company decided to go the buyout route because of the integration possibilities with SAP.

“We didn’t have too. We had all the options in the world and were one of the hottest IPOs coming into the year,” Smith said. But he explained that the company lacked the operational data to make its experience data more functional for enterprise customers. “We knew we would have to figure out how to partner, but SAP was the only one to go across the four experiences.”

SAP has repeatedly touted its Qualtrics operations. In fact, Smith has often joined SAP management on stage at the vendor’s annual Sapphire conference.

The move is also the first major operational change under SAP’s newly unified management structure under Christian Klein. That move saw previous co-CEO Jennifer Morgan exit SAP, leaving Klein as the sole CEO. The company said the move was prompted by the need for a more streamlined decision-making process in light of the ongoing COVID-19 pandemic.

SAP earlier this year revamped its organizational structure that included the reassignment of operational divisions to its executive team and the trimming of its board.