Business analytics remains a top customer priority and a principal growth driver
Revenue and profit at enterprise software vendor SAP rose in the July to September quarter, the company said Wednesday.
Revenue and profit at enterprise software vendor SAP rose in the July to September quarter, boosted by the recent acquisition of Sybase, the company said Wednesday.
Profits after tax were up 12 percent on the same period a year earlier at €501 million (US$694 million) and revenue climbed 20 percent to €3 billion, it said. The results are calculated to international financial reporting standards and include the operations of Sybase after it was acquired by SAP on July 26.
Software and software-related service revenue was €2.3 billion in the quarter, up 20 percent from the same quarter last year. Software revenue was up 25 percent at €656 million.
SAP did not change its outlook for the full year 2010.
All of the regions reported growth in the third quarter, with particular strength in the U.S. and the emerging markets of Asia, Europe and Latin America, SAP said.
It saw a good mix of revenues among small, mid-size and large enterprises, and had an increase in deal volume.
On the product side, business analytics remains a top priority among its customers and continues to be a principal growth driver, SAP said.
But like so many software companies, SAP depends heavily on consistent streams of support service fees.
Nearly 100 percent of customers on SAP’s higher-priced Enterprise Support service remained on it, and 70 percent of new customers are choosing that option over standard support, SAP officials said during a conference call Wednesday. However, the company declined to break down the percentages of its overall customer base on each support level.
Along with analytics, SAP has high hopes for on-demand software such as its Business ByDesign suite for smaller companies.
Interest in Business ByDesign is growing and the company has scored some competitive wins with it, according to co-CEO Jim Hagemann Snabe. However, “obviously the starting point is low because we’re not going for volume so far,” he said. “We still need to build the pipeline and get to the big numbers we have in mind.”
SAP originally anticipated Business ByDesign would gain 10,000 customers and generate US$1 billion in revenue by 2010, but subsequently hit the brakes on the product’s rollout while making sure it could be profitable at scale.
Other topics on the conference call moved away from SAP’s quarterly results.
Recent talk of SAP being taken over by the likes of Hewlett-Packard or IBM are “nothing but speculative rumors,” said co-CEO Bill McDermott. “I think they’ve been going on for about 40 years now. … We are an independent company.”
Meanwhile, SAP is headed to court next week with Oracle, which has sued the company over intellectual-property violations committed by its now-defunct TomorrowNow subsidiary.
Oracle alleges that TomorrowNow workers illegally used its software to provide cut-rate support service to Oracle applications users. SAP has acknowledged wrongdoing by TomorrowNow and agreed to accept liability for its actions, but maintains that SAP itself played no role.
Oracle CEO Larry Ellison issued a statement late Tuesday declaring the company would introduce evidence showing that former SAP CEO Léo Apotheker, who is now CEO of Hewlett-Packard, knew of the activity.
McDermott declined to comment on Apotheker’s role in the case. “Now it’s up to the compensation [phase] and the court will decide.”
