Germany's SAP joins western corporate exodus from Russia

FILE PHOTO: A man walks past a SAP logo during the company's annual general meeting in Mannheim, Germany, May 15, 2019. REUTERS/Ralph Orlowski/File Photo

STOCKHOLM (Reuters) - Business software group SAP plans to exit Russia completely in response to Moscow's invasion of Ukraine, although it said on Tuesday it might be possible for Russian users to run its software for years without support.

SAP joined a long list of companies, including rival Oracle last month in halting the sale of its services and products in Russia. Firms from telecom gear maker Nokia to Goldman Sachs have since left completely.

The German maker of software for the management of business processes is not providing any support or updates to sanctioned customers, SAP Chief Financial Officer Luka Mucic told reporters on a call, adding that the full impact of this may take time.

"There is no magical red button that SAP could push to make these software licenses disappear from the computers," Mucic said of SAP's software, which is sold either as a licensed software or on a subscription basis through the cloud.

Western countries have responded to Russian invasion of Ukraine on Feb. 24 by placing sanctions on scores of companies and individuals linked to the Kremlin, which describes its actions as a "special military operation".

As part of its cloud shutdown, SAP has given non-sanctioned companies the choice to have their data deleted, sent to them, or migrated to a data centre outside Russia.

"Those Russian cloud customers who have chosen the migration path, we will not renew their existing cloud subscriptions when they come up for renewal," Mucic said, adding these contracts run for an average of slightly more than three years.

SAP's business in Russia, where it has been operating for more than 30 years, contributes only a small part of its global revenue. Its business in the region, including Russia, Belarus and Ukraine, makes up about 1.5% in total.

SAP said it will focus on managing the impact of its exit on more 1,200 employees in Russia. Mucic said it would finalise the wind down plan over the coming months.

(Reporting by Supantha Mukherjee, European Technology & Telecoms Correspondent, based in Stockholm; Editing by Alexander Smith)

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