Oct. 2, 2013, 10:28 AM
- SAP's VC arm, SAP Ventures, is pouring $650M (all coming from the parent company) into Ventures Fund II, a new fund that will invest in fast-growing companies with "established market presences."
- Ventures Fund II follows the recent launch of a $405M fund investing in 3rd-party VC funds making bets on early-stage companies, with an eye towards getting companies to support the Hana in-memory database and other SAP technologies. Altogether, SAP Ventures now manages $1.4B worth of VC funds.
- Past investments include LinkedIn, Box (could do a big IPO next year), Violin Memory (just went public), and ExactTarget (acquired by Salesforce for $2.5B).
Sep. 23, 2013, 11:17 AM
- Back from the America's Cup, Larry Ellison (ORCL -0.6%) was his usual self during an Oracle OpenWorld speech, trash-talking rivals and promising upcoming Oracle products will blow away existing offerings.
- Grabbing the most headlines: Ellison's boast that an expected in-memory version of Oracle's flagship 12c database will improve analytics query speeds by 100x, and transaction-processing rates by 2x, over a standard relational database. Ellison also stated customers will have to "just flip a switch" to turn a regular 12c database into an in-memory database.
- The product is aimed squarely at archrival SAP (SAP -0.2%), whose market-leading Hana in-memory database is expected to post 2013 sales of €650M-€700M (that's up from 2012's €392M, but some think the figures are inflated). Though not applicable to all traditional database deployments, Hana is viewed as a long-term threat to Oracle's database cash-cow.
- SAP has been busy expanding Hana's reach this year, adding support for its core Business Suite apps, expanding 3rd-party app support, and launching a Hana managed cloud service for migrating on-premise SAP apps.
- Ellison also promised Oracle will launch a new high-end server, known as the M6-32 Big Memory Machine, for in-memory deployments; the server will support up to 32TB of RAM, and cost a hefty $3M. Oracle's hardware product sales fell 14% Y/Y in the Aug. quarter, easily missing guidance.
- Also on tap: a database backup appliance and a related cloud backup/recovery service. By constantly receiving database logs and supporting restores to any log points, Ellison asserts the appliance is a better solution for databases than standard backup systems.
Sep. 22, 2013, 3:24 PM
- Gartner estimates that by 2017, the largest portion of corporate IT spend will be controlled by chief marketing officers (CMOs) rather than CIOs. CLSA's Ed Maguire views cloud CRM software kingpin Salesforce (CRM) as a major beneficiary of this trend, particularly following its $2.5B deal to acquire ExactTarget. Salesforce is adding ExactTarget's marketing automation software to its growing Marketing Cloud platform.
- Other ad software/tech names that benefit from a spending shift to CMOs include Adobe (ADBE), Responsys (MKTG), Marketo (MKTO), Constant Contact (CTCT), and Marin Software (MRIN). Adobe's own Marketing Cloud saw 28% Y/Y sales growth in the August quarter, and was recently bolstered by the $600M purchase of ad campaign software vendor Neolane.
- Like Salesforce, SAP is trying to create an end-to-end CRM platform aimed at CMOs. It recently bought top e-commerce software firm hybris for a reported $1.2B-$1.5B.
- Maguire also states Salesforce's data integration deal with Workday (WDAY), together with a prior deal with Oracle (ORCL), "reinforce [Salesforce's] prominence as a de facto CRM standard." He reports hearing of "at least one competitive engagement where a customer chose Oracle over Workday" because the latter's Salesforce integration wasn't good enough.
- Nomura feels likewise about Salesforce, and thinks its deals help negate the historical edge SAP has had in app integration (courtesy of its own apps, rather than partnerships). With two key ERP/HR software rivals striking deals with Salesforce, SAP is on the spot to strike one of its own.
Aug. 17, 2013, 5:41 PM
- In a June Information Week survey covering enterprise app use (excludes software such as Windows, Office, and databases), 24% of respondents named Microsoft (MSFT) their "most strategic " app supplier, up from 19% in April '12.
- Though its Windows sales have fallen, Microsoft has been seeing solid billings growth for enterprise app offerings such as Dynamics, Exchange, Lync, and SharePoint.
- Salesforce (CRM) rose to 10% from 6%. The company posted 25% Y/Y billings growth in FQ1, and is reporting FQ2 results on Aug. 29.
- On the other hand, Oracle (ORCL), which is coming off two quarters of license revenue misses and is reportedly dealing with salesforce turmoil, fell to 23% from 30%. Archrival SAP fell slightly to 15% from 16%.
- The cloud migration continues: 46% of respondents said their companies are using cloud/SaaS apps, up from a prior 38%. Not surprisingly, companies are more comfortable moving CRM and HR apps to the cloud (Salesforce and WDAY have led the way) than moving ERP apps (SAP's stronghold in the on-premise world).
- Also, 60% said their firms are using or considering a cloud app platform such as Salesforce's Heroku and Force.com vs. a prior 52%, and 48% said the same for cloud infrastructure platforms such as AWS (AMZN) vs. a prior 41%. Windows Azure competes in both realms.
- Interestingly, in spite of the rapid growth SAP has seen for Hana, only 13% of respondents said their firms are using an in-memory database. Another 37% are considering, and 50% are unlikely to consider it.
Aug. 2, 2013, 11:04 AM
- Sources tell BloombergBusinessweek SAP has considered buying Jive (JIVE +2.6%) in recent months, along with other companies.
- There doesn't appear to be any new information about SAP/Jive in this column, relative to a May report stating SAP considered acquiring the enterprise social networking software firm, but decided not to due to product overlap concerns.
- BloombergBusinessweek also observes SAP is rapidly expanding its Silicon Valley presence. The German software giant has spent $7.6B to acquire Valley software firms SuccessFactors and Ariba, and its Palo Alto-based VC arm has invested $700M+ in startups, including enterprise cloud storage high-flyer Box.
Jul. 22, 2013, 3:37 AMSAP (SAP) co-CEO Jim Hagemann Snabe plans to step down in May next year, leaving American Bill McDermott in sole charge of the German software giant. Snabe, who became co-CEO in February 2010 along with McDermott, will join SAP's supervisory board. Industry watcher Ray Wang wouldn't be surprised if SAP appoints another co-CEO to replace Snabe, possibly Vishal Sikka, the board member responsible for technology and innovation. Sikka would act as "a good counterweight to Bill McDermott's sales and business acumen," said Wang. (PR) | Comment!
Jul. 19, 2013, 9:54 AMA roundup of tech analyst ratings changes: 1) Microsoft (MSFT -9.2%) has been downgraded to Market Perform by Raymond James and Cowen following its FQ4 miss. 2) AMD (AMD -14.5%) has been downgraded to Underweight by Morgan Stanley, and to Underperform by Credit Suisse, following its Q2 beat. 3) Skyworks (SWKS +10.1%) has been upgraded to Buy by Needham following its FQ3 beat. 4) BlackBerry (BBRY +0.5%) has been upgraded to Market Perform by BMO. 5) IGT (IGT -4.2%) has been downgraded to Underperform by Credit Suisse. 6) SAP (SAP -1.3%) has been downgraded to Neutral by JPMorgan a day after posting a Q2 miss. 7) Ultratech (UTEK -4%) has been downgraded to Hold by Noble Financial. | Comment!
Jul. 18, 2013, 5:13 AM
Jul. 18, 2013, 3:00 AMSAP (SAP): Q2 net profit +10% on year to €724M, revenue +4% to €4.06B, adjusted operating profit +3.9% to €1.22B vs forecasts of €1.24B. Software and related services revenues +10% to €3.35B vs consensus of €3.41B. Sales of software licenses -3% to €982M vs €1.02B for the first decline in over three years, with Asia -9%. Cuts FY growth outlook for revenues from software and related services to +10% from prior forecast of 11-13%, but maintains operating profit guidance of €5.85-5.95B, up 12-14% from 2012. "The slowdown in China impacts many countries in Asia and you see that in our numbers this quarter," say Co-CEO Jim Hagemann Snabe. (PR) | Comment!
Jul. 18, 2013, 12:05 AM
Jul. 17, 2013, 5:30 PM
Jul. 5, 2013, 9:28 AMSAP -1% in spite of higher equity futures, thanks to a downgrade to Hold from Deutsche. Following a strong 2012 (aided by optimism about Hana), shares have underperformed this year amidst worries about slowing software license growth due to macro issues and cloud competition. Oracle and Accenture's recent numbers haven't helped matters. | Comment!
Jun. 28, 2013, 2:24 PMIn addition to IBM, several other enterprise IT names are pressured by Accenture's (ACN -10.3%) May quarter revenue miss (caused by consulting weakness), light guidance, and commentary about soft European demand. SAP (SAP -3.6%), Autodesk (ADSK -2.3%), Qlik (QLIK -2.1%), and Informatica (INFA -1.8%), all of whom have strong European exposure, are among the casualties. Other decliners include VMware (VMW -1.5%), Salesforce (CRM -1.9%), Teradata (TDC -1.8%), and CommVault (CVLT -3.9%). In his downgrade note on Accenture, Raymond James' Brian Gesuale mentioned "ERP [software consulting] work is showing signs of commoditization and short-term projects remain on the shelf." That might not be going over well with SAP investors. | 2 Comments
Jun. 26, 2013, 11:26 AMWorkday (WDAY +3.9%) rallies after William Blair starts coverage with an Outperform. The launch comes a day after partner Salesforce announced a partnership with rival Oracle, and Pac Crest struck an upbeat tone about Workday's new cloud recruiting product. The firm says checks indicate recruiting rivals Taleo and SuccessFactors are "far less competitive" following their respective acquisitions by Oracle (ORCL) and SAP, thanks in part major personnel defections (this is an issue bigger software firms often face when acquiring startups), and that Workday's "unique use of object-oriented technology and its proprietary in-memory data model" aid its efforts to enter the HR/finance analytics space. | Comment!
Jun. 21, 2013, 11:40 AMAs was the case in March, cloud competition is in focus as Oracle (ORCL -8.6%) dives following a revenue/EPS miss marked by soft new license/cloud subscription growth. "Seasonally, the fourth quarter is their biggest ... software quarter and we have a miss here on software," observes Edward Jones' Josh Olson. Goldman's Heather Bellini is defending Oracle, arguing the shortfall is "likely more macro driven than company-specific." Rivals SAP (SAP -3.3%), VMware (VMW -3.2%), and Citrix (CTXS -2.1%) are underperforming. Larry Ellison mentioned on the earnings call Oracle plans to launch an in-memory version of its 12c database to take on SAP's Hana; Oracle has thus far taken a hardware-centric approach to competing with Hana. | Comment!
Jun. 20, 2013, 5:37 PMOracle (ORCL) guides on its FQ4 call for FQ1 revenue growth of 2%-5% and constant currency EPS of $0.56-$0.59; that compares with a consensus of 4.5% rev. growth and non-constant-currency EPS of $0.58. Software license/cloud subscription rev. growth is forecast at -1% to +7%, and hardware product growth at -6% to +2%; the latter is much better than FQ4's -13%, but aided by easier comps. Engineered systems now make up over 1/3 of hardware sales. Mark Hurd names dozens of major cloud customer wins, and claims Oracle's cloud HR business is bigger than Workday's (WDAY). But what does that say about traditional software sales, in light of the total license numbers? ORCL -8% AH. SAP -1%. | Comment!
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