SAP posts double-digit growth

Enterprise software giant boosted by economic recovery and Sybase deal.

SAP's Bill McDermott

SAP, the enterprise software giant, today posted double-digit growth but remained cautious in its outlook.

The company -- which makes enterprise resource planning, CRM, business intelligence and other back-office software -- said its software and software-related services revenue increased by 21 per cent, or 13 per cent in constant currency terms, compared with the third quarter of 2009. Figures released according to the IFRS accounting standard saw growth increase 20 per cent.

SAP did not, however, raise its guidance for its fourth quarter, with executives telling Reuters TV that the company had already set ambitious targets. Markets reacted by marking down SAP's shares. Analysts had hoped the company would raise its targets for revenue from software-related services.

According to SAP, the results reflect both the company's acquisition of Sybase this Spring, as well as an improving economic climate. The vendor reported good sales in Asia, excluding Japan, and saw a strong recovery in both Europe's emerging markets, and North America.

Advertisement
Advertisement - Article continues below
Advertisement - Article continues below

SAP also reported growth from across its customer base, highlighting growing interest both from its troubled Business On Demand SaaS product, and from business analytics. In August SAP signed a large-scale deal with Wal-Mart.

"Enterprises are becoming more confident in their strategic buying decisions," said Bill McDermott, SAP co-CEO, on an earnings call.

But he added, in a thinly veiled swipe at competitor Oracle, that businesses "want to partner with a company with an open ecosystem, not one that locks them into a stack but [which] gives them choice."

"The results are okay, not great but not weak either. When you pull out Sybase, it is high single digits," said Thomas Otter, a research director at Gartner.

"Business is picking up, but there is no break through growth yet. SAP is selling what it has competently, but this is not going to drive growth into the future. Things will get interesting once we get better visibility of ByDesign, mobile, Sybase synergies and the in-memory [technology] (Hana) from a revenue rather than a theoretical perspective. I suspect that SAP is spending on marketing in preparation for these, which is pressing on its margins."

SAP also confirmed it had increased its provision for damages in the TomorrowNow legal dispute with Oracle to $160m. SAP has already admitted that its former US subsidiary breached Oracle's copyright. A court will decide on damages in November.

Featured Resources

What you need to know about migrating to SAP S/4HANA

Factors to assess how and when to begin migration

Download now

Your enterprise cloud solutions guide

Infrastructure designed to meet your company's IT needs for next-generation cloud applications

Download now

Testing for compliance just became easier

How you can use technology to ensure compliance in your organisation

Download now

Best practices for implementing security awareness training

How to develop a security awareness programme that will actually change behaviour

Download now
Advertisement

Recommended

Visit/business-strategy/32994/cultural-resistance-not-tech-is-holding-innovation-back-oracle-research
Business strategy

Oracle: Cultural resistance, not tech, is holding innovation

13 Feb 2019
Visit/business-strategy/32820/oracle-underpaid-women-and-minorities-by-more-than-400-million-says-us
Business strategy

Oracle underpaid women and minorities by over $400m, US says

23 Jan 2019
Visit/business-strategy/32802/oracle-accused-of-underpaying-its-female-staff-by-13000-per-year
Business strategy

Oracle accused of underpaying women by $13k per year

21 Jan 2019

Most Popular

Visit/policy-legislation/data-governance/354496/brexit-security-talks-under-threat-after-uk-accused-of
data governance

Brexit security talks under threat after UK accused of illegally copying Schengen data

10 Jan 2020
Visit/security/cyber-security/354468/if-not-passwords-then-what
cyber security

If not passwords then what?

8 Jan 2020
Visit/policy-legislation/31772/gdpr-and-brexit-how-will-one-affect-the-other
Policy & legislation

GDPR and Brexit: How will one affect the other?

9 Jan 2020
Visit/web-browser/30394/what-is-http-error-503-and-how-do-you-fix-it
web browser

What is HTTP error 503 and how do you fix it?

7 Jan 2020