Apr 19, 2013 (09:04 AM EDT)
SAP Outperforms Oracle With Steady Financial Results
Read the Original Article at InformationWeek
Despite the uneven performance, SAP reported its 13th consecutive quarter of double-digit growth, with software and software-related services revenue increasing 14% to 2.94 billion euros ($3.86 billion) compared to the same quarter last year (all figures are non-IRFS in constant currencies).
The performance outpaced that of SAP's biggest rival, Oracle, a point that SAP co-CEO Bill McDermott drove home several times during a conference call with financial analysts.
"We gained significant market share from our primary competitor, especially in the areas of cloud and database," McDermott said. "Our 25% software and cloud subscription growth is a stark contrast to [Oracle, which] did not grow at all in its latest quarter." Oracle reported a 2% drop in software license and subscription revenue in its third fiscal quarter ended in February.
[ Want to compare and contrast SAP's performance with Oracle's? Read Oracle's Bad Quarter Is Self-Inflicted. ]
SAP's software license sales grew 8% in the Americas to 254 million euros ($333 million), but McDermott acknowledged that the performance was lower than expected. Federal budget sequestration had a negative impact on sales to government and overall results in the U.S., McDermott said.
In the Asia-Pacific region, where software sales declined 15% to 105 million euros ($137 million), McDermott cited slower sales in China, where a change in the national government slowed sales to state-owned businesses -- a sales trend also reported by IBM on Thursday.
Accelerated by last year's acquisitions of SuccessFactors and Ariba, SAP cloud subscription and support revenue increased 380% to 167 million euros ($218 million). Total cloud subscription, support and services revenues were up 5% over the fourth quarter of 2012 to 224 million euros ($293 million) and are on track to reach $900 million euros ($1.17 billion) by year end, according to SAP.
Hana database software revenue tripled to 86 million euros ($112 million) in what is historically SAP's smallest quarter. The company predicted that accelerating sales would lift total Hana revenue to 650 to 700 million euros ($852 to $917 million) this year. SAP highlighted Hana adopters including oil giant Petrobras of Mexico, Levi Strauss, ConAgra and Siemens Bosch.
SAP's mobile infrastructure and application sales increased 76%, and together with cloud and Hana sales, these areas of innovation are driving renewal of SAP's core applications, according to co-CEO Jim Hagemann-Snabe.
"The beauty of our strategy is that the core gets pulled [along] by the innovations," Snabe explained. "Mobile makes core applications easier to consume and Hana makes the core significantly more competitive, and with that we'll get more users."