Jul. 17, 2014, 10:20 AM
- Though SAP (SAP +2%) missed Q2 revenue estimates (while beating on EPS), it's reiterating its forecast for 6%-8% constant currency software and software-related service revenue growth. Cloud subscription/support revenue is now expected to make up €1B-€1.05B of that total, up from €950M-€1B.
- 2014 constant op. profit guidance of €5.8B-€6B is being reiterated. If currency rates remain at June levels, forex is expected to have a 2% 2014 impact on revenue and op. profit growth.
- Cloud subscription/support revenue rose 32% Y/Y (to €242M) in Q2, even with Q1's clip. Traditional software license revenue (hurt by cloud competition) fell 2% (to €957M), an improvement from Q1's 5% decline. Support revenue (based on past deals, fairly stable) rose 4% (to €2.28B) vs. 5% in Q1.
- Cost controls helped drive the EPS beat: Opex only rose fractionally Y/Y to €2.92B, even as headcount rose 4% to 67,651.
- SAP's annual cloud revenue run rate rose to ~€1.2B from ~€1.1B at the end of Q1. ~1.2K customers are now running its core Business Suite on top of the Hana in-memory database (up from ~1K), and there are ~3.6K Hana customers altogether (up from ~3.2K). Deferred cloud subscription/support revenue rose 29% Y/Y to €448M.
- Q1 results, PR
Jul. 17, 2014, 6:16 AM
Jul. 16, 2014, 5:30 PM
Jul. 3, 2014, 4:35 PM
- Political turmoil in Russia may have affected SAP's (SAP +1%) Q2 sales to the country, writes JPMorgan, while cutting its PT for the business software giant by €2 to €60 ($81.60).
- JPMorgan is also concerned about weakness in other emerging markets, and believes SAP's U.S. license revenue is still under pressure. U.S. revenue (inc. both software and services) rose 4% Y/Y to €1.065B, but its sales to the rest of the Americas fell 7% to €356M. Likewise, Asia-Pac sales (emerging markets-dependent) fell 8% to €511M.
- The note comes ahead of SAP's July 17 Q2 report. Shares sold off in April following a Q1 miss driven by a 5% Y/Y drop in traditional license revenue to €623M (overshadowed a 32% increase in cloud revenue to €221M).
Jun. 10, 2014, 6:42 PM
- The in-memory version of Oracle's (ORCL) flagship 12c database, first detailed last September, has officially launched. Oracle continues to promise major gains in query speeds and transaction-processing rates relative to a standard database, as well as easy integration with both regular Oracle databases and 3rd-party apps.
- The launch is aimed squarely at SAP's Hana in-memory database, which saw its sales rise 61% last year to €633M ($855M) and has developed a strong ecosystem.
- As one might expect, Oracle argues integration with standard 12cand mature database feature set give it an edge - Larry Ellison claims data can be moved in-memory "within minutes." Ellison adds 12c in-memory is only meant to handle active data; all other data is left on cheaper flash memory or hard drives.
- In April, Microsoft updated its SQL Server database (has gained share against Oracle in recent years) to include in-memory features.
May 27, 2014, 10:08 AM
- Germany's Der Aktionär reports SAP (SAP +2.1%) might be looking to acquire Tibco (TIBX +5.5%). The latter's shares have jumped in response.
- Buying Tibco would strengthen SAP's middleware offerings - IBM/Oracle have a big chunk of the market - and also provide it with an analytics/data visualization platform (Spotfire) to complement its Hana in-memory database.
- But an acquisition price would likely be north of $4B, and Spotfire has been struggling lately amid tough competition from Tableau and others.
- On Twitter, Germantrader suggests taking the report cautiously, calling it "guesswork" and stating Der Aktionär "is not trusted in Germany."
- SAP has suggested it could make some large deals, as cloud competition pressures its on-premise software license sales. Recent purchases include marketing software firm SeeWhy and labor-management software firm Fieldglass.
May 20, 2014, 11:30 AM
- Acquisition-hungry SAP's (SAP -0.3%) latest buyout target is SeeWhy, a top provider of behavior-analysis online marketing software. Terms are undisclosed.
- SeeWhy's products monitor/analyze the activity of online/mobile shoppers, and use their findings to deliver personalized e-mail follow-ups and targeted ads. Its offerings complement those of SAP's hybris unit, a leading provider of e-commerce infrastructure software (acquired last year, possibly for $1B+).
- Demandware (DWRE -1.5%), which competes against SAP/hybris, has a partnership with SeeWhy that could be affected by the deal.
- SAP's move comes two months after the company struck a partnership with Adobe's Marketing Cloud online ad tech unit, and announced it's buying cloud labor-management software vendor Fieldglass.
May 8, 2014, 2:16 PM
- Shortly after SAP (SAP -2.4%) announced senior product development exec/executive board member Vishal Sikka is leaving, re/code has reported cloud software chief Shawn Price has been fired.
- Sources state Price won't be replaced, as SAP tries to portray its cloud ops as an integral part of its business rather than a separate unit. SuccessFactors (cloud HR software) chief Graham Younger left in February.
- Re/code also states Americas chief Rodolpho Carduento is being reassigned - he'll now head SAP's partner ecosystem efforts - and that the Americas unit will be split into North and Latin American segments.
- The changes come as co-CEO Bill McDermott gets set to become sole CEO following SAP's May 21 annual meeting. In an interview, McDermott insists SAP's core strategy isn't changing.
- He also talks up the ability of its Hana in-memory database, whose development was spearheaded Sikka, to cut the time needed to analyze customer data. "We're talking about radical improvements in speed and understanding of what's going on with the customer, and wiping out indexes and aggregates when it comes to financial reporting."
May 5, 2014, 7:58 AM
- Vishal Sikka, a senior SAP product development exec and the software giant's "executive board member for products and innovation," has left for "personal reasons."
- Customer operations chief Robert Enslin and app development chief Bernd Leukert will join the executive board. Two other execs, Stefan Ries an Helen Arnold, will be joining the managing board. Ries is SAP's HR chief, an Arnold has just been appointed CIO.
- Sikka's bio declares him to have "global responsibility for development and delivery of all products across SAP’s product portfolio," as well as for "design and end-user experience." Among other things, he spearheaded the development of SAP's very successful Hana in-memory database.
- There was speculation Sikka could be named CEO down the road. Co-CEO Bill McDermott is set to become sole CEO this month.
- The shakeup comes ahead of SAP's June 3-5 SapphireNow conference. It follows the February departure of Graham Younger, the head of SAP's SuccessFactors cloud HR software unit. Shares are down 2.4% in Frankfurt.
Apr. 17, 2014, 11:42 AM
- Though SAP's (SAP -2.1%) non-IFRS cloud subscription/support revenue rose 32% Y/Y in Q1 (even with Q4's rate) to €221M, its traditional software license revenue fell 5% to €623M after growing 1% in Q4.
- Much like archrival Oracle's 2013 license revenue misses, the latter figure is bound to trigger fears about the impact of cloud software competition.
- Support revenue (driven by software licenses, relatively steady) rose 5% Y/Y to €2.21B, and all other revenue fell 8% to €643M. Opex rose just 2% Y/Y.
- A strong euro took a toll: Whereas revenue and op. profit each rose 2% Y/Y at current exchange rates, they've would've risen 6% and 7% at constant currency. SAP expects a similar forex impact for the whole of 2014.
- SAP now has 3.2K+ Hana customers, up from 3K+ at the end of 2013, and nearly 1K customers now run its core Business Suite on Hana (up from 800). But no Hana revenue figure is given; Hana revenue rose 61% in 2013 to €633M.
- Cloud billings rose 23% Y/Y to €228M (36% exc. forex), and the cloud deferred revenue balance 20% to €454M (29% exc. forex).
- In spite of the Q1 miss, SAP is reiterating its full-year revenue and op. profit forecasts.
- Q1 results, PR
Apr. 17, 2014, 6:10 AM
Apr. 17, 2014, 12:05 AM
Apr. 16, 2014, 5:30 PM
Apr. 15, 2014, 7:03 PM
- Microsoft's (MSFT) new Azure Intelligent Systems Service allows companies to capture and manage machine data from various embedded devices and sensors, regardless of the OS they use. The service aims to enable Web-connected embedded platforms in verticals such as retail, health, manufacturing, and transportation.
- IT outsourcing firms Cognizant and Infosys are among Microsoft's service partners. Intel and ARM are already going after this market by via solutions that combine their CPU designs with related software.
- Microsoft is also unveiling its Analytics Platform System, a hardware appliance (to be sold by OEMs) that allows data handled by SQL Server's data warehousing solution (used to process/analyze structured data) and the Hadoop big data framework (used for giant unstructured datasets) to be integrated and jointly queried.
- Satya Nadella calls the solution "big data in a box." Teradata (TDC) and Informatica (INFA) are among the companies in Microsoft's crosshairs.
- SQL Server 2014 has also been launched. As promised, the latest update to Microsoft's database platform (produces $5B+/year in sales) features in-memory capabilities that arguably make it a meaningful rival to SAP's popular Hana in-memory database.
- While going over the products, Nadella declares Microsoft needs to create a "data culture" to thrive, in part by using its own products. "Think of Office as the canvas, or the surface area, or the scaffolding from which you can access the data."
Apr. 14, 2014, 7:07 PM
- An April Barclays survey of 100 U.S. and European CIOs found 46% expecting their company's IT spending to rise in 1H14, 20% expecting it to drop, and 34% expecting no change. Those figures compare with September survey levels of 43%, 27%, and 30%.
- Moreover, IT spending growth is seen accelerating in 2H in both the U.S. and Europe. Barclays thinks larger budgets, macro stabilization, and a need for equipment refreshes (due to high utilization rates) could be helping out.
- At the same time, the firm cautions the spending growth is uneven: Software, networking, security, and cloud services demand is healthy, but servers, storage, and IT services remain soft. Interest in the concept of a software-defined data center is gaining traction, but big data (hyped considerably last year) is losing it for now.
- Gartner has forecast IT spending will rise 3.2% this year to $3.77T after growing just 0.4% in 2013. Enterprise software (+6.9% to $320B) is expected to lead the way.
- Barclays thinks its survey bodes well for H-P (HPQ), Juniper (JNPR), F5 (FFIV), Aruba (ARUN), Ingram Micro (IM), and CDW, each of which is rated Overweight.
- Others that might take heart in the survey results: CSCO, ORCL, SAP, CA, SWI, VMW, CHKP, BRCD, ARW, AVT
Apr. 8, 2014, 6:27 PM
- SAP's Business Suite, which includes the software giant's mainstay ERP apps, will soon be available via cloud subscriptions. The apps will be offered through SAP's Hana Cloud platform (launched last year), which already runs a slew of SAP and 3rd-party apps on top of the company's Hana in-memory database.
- In addition to ERP apps, Business Suite features CRM and supply-chain management apps. Whereas many enterprises have embraced cloud CRM solutions, they've generally preferred to keep mission-critical ERP apps onsite.
- Nonetheless, NetSuite (N) has had some success selling its cloud ERP solution to mid-sized businesses, and Workday (WDAY) has reeled in enterprise buyers for its cloud financials software (different from an end-to-end ERP suite). SAP's move presents the companies with fresh competition, but could also serve to validate the broader market.
- Aided by the Ariba acquisition, SAP's cloud subscription/support revenue rose 121% in 2013 to €758M; all other software sales rose only 3% to €4.52B. The company is aiming for €3B-€3.5B in total 2017 cloud-related revenue.
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