SAP Execs Say Carahsoft FBI Raid ‘Unrelated’ To ERP Giant

‘We are really confident that this has nothing to do with our case,’ SAP CFO Dominik Asam said on the vendor’s latest quarterly earnings call.

SAP’s leadership has now publicly weighed in on the September raid of reseller partner Carahsoft’s office by the FBI, with Chief Financial Officer Dominik Asam telling a news outlet that the business applications giant needs “to scrutinize that partner” and telling analysts on Tuesday’s quarterly earnings call that the “search was completely unrelated to SAP.”

Asam told Bloomberg that the Germany-based vendor has “to be absolutely sure that we can rely on a clean partner” in regard to Reston, Va.-based Carahsoft–No. 16 on CRN’s 2024 Solution Provider 500.

“We need to scrutinize that partner,” Asam reportedly told Bloomberg.

Carahsoft FBI Raid

CRN has reached out to SAP, Carahsoft and the FBI for comment.

On SAP’s quarterly earnings call Monday, Asam and Klein discussed the Carahsoft raid in response to an analyst’s question, according to a transcript of the call. Klein described SAP’s relationship with the U.S. public sector and federal agencies as “intact.”

Asam said on the call that “we are really confident that this has nothing to do with our case here,” with SAP getting “assurance in writing by Carahsoft that the FBI search was completely unrelated to SAP and NS2,” which is SAP National Security Services.

He described SAP’s relationship with Carasoft as “like many other tech companies” that sell through Carahsoft to government entities, according to a call transcript. The CFO also said the raid was unrelated to the U.S. Department of Justice’s 2022 civil investigative demand. A CID is a type of subpoena by federal government agencies for information from private entities.

The 2022 CID “involved us and Carahsoft and others,” Asam said on the call. “Since then, we have fully been cooperating with the DOJ. And we plan to continue to do so.”

The U.S. accounts for a third of SAP’s revenue base, Asam said, according to the transcript. Government agencies account for “a small fraction... about low single-digit revenue contribution,” he said.

“We continue to be fully committed to ensuring that our sales practices comply with all applicable regulations,” the CFO said on the call. “So this is all I can say at this stage. And that's the status we currently have.”

The raid might have come due to Carahsoft not producing a full set of transaction records for a Justice Department investigation, according to Nextgov/FCW. The raid happened Tuesday morning just days before the end of the U.S. government’s fiscal year, Sept. 30.

Justice Department lawyers started looking at SAP and Carahsoft at least in 2022 for potentially conspiring to overcharge the U.S. military and government agencies, according to Bloomberg. Carahsoft has received more than 600 federal contracts for SAP products worth more than $990 million and facilitated another $1 billion or less in additional sales.

Q3 2024 Results

As for the earnings, SAP reported total revenue for its third fiscal quarter, ended Sept. 30, of about $9 billion ($8.4 billion euros), up 9 percent year over year accounting for foreign exchange.

The vendor raised its 2024 revenue outlook, which is now between about $31.9 billion to $32.2 billion (29.5 billion euros and 29.8 billion euros) in cloud and software revenue, representing an increase of about 10 percent year over year. The outlook was previously about $31.31 billion to $31.9 billion (29 billion euros to 29.5 billion euros), representing an increase of about 8 percent year over year.