There’s no getting away from it. SAP’s final quarter was at the low end of expectations. Seeking Alpha has the outline facts prior to the full release of detailed information expected 24th January. Larry thinks this will lead to some short term PR opportunities for Oracle. Maybe. I think buyers are mature enough to recognise when the Oracle BS train has arrived.
The bigger concern for me is the way SAP is moving the goalposts in assessing itself in the market place. Larry pulls out the salient point from SAPs press release but it’s worth repeating:
The Company believes that after the large amount of consolidation that has occurred among the larger companies in the software industry, the peer group (Microsoft, Oracle and Siebel) has become too small to provide an adequate metric for the purpose of measuring growth of sales share.
Therefore, the Company will now be providing share data based on the vendors of Core Enterprise Applications solutions, which account for approximately $16 billion in software revenues as defined by the Company based on industry analyst research.
Nice take but SAP won’t get away with that so easily. Oracle is its obvious competitor so the comparisons will continue to be drawn. But on size, SAP and Oracle should not ignore Infor. Perceptions might be that Infor is a maintenance parasite but at $2 billion revenues, it can’t be ignored. Neither can its aspirations to become a $4 billion earner. It’s in the enviable position of not being publicly accountable in the same way as Oracle and SAP so can plough its own acquisition furrow without needing to give financial analysts any line of sight.
We should not forget Microsoft. It’s got a $1 billion business in Dynamics and while it is easy to put M$ in the crosshairs – Simon Griffiths does an excellent job riffing on their marketing – it is quietly getting on with the job of sales execution. At the end of last year, I met with some of Microsoft’s UK people: ‘The numbers don’t lie, we’re growing nicely.’ Lots of smiles.
I’d be surprised if there are structural problems at SAP and failing to delight Wall Street isn’t the end of the world. I suspect that once again, a few plum deals fell through the cracks. But as always, the devil is in the detail and we won’t learn about that until 24th January. I’ll be looking for signs that Netweaver is perceptibly moving on from being PowerPointWare and that their fledgling mid-market and SMB offerings are gaining genuine traction.
PS: I received an email reminding me that SAP is in a ‘quiet period’ where it can’t step outside what has already been said in the press release without incurring the wrath of regulators. That prevents the SAPerati from commenting as well. It’s a bugger when you can’t kick back. SAP has my sympathy on that one.