SAP reported robust revenue and profits for third-quarter
2010, although competitive challenges and an upcoming lawsuit with Oracle both
cloud what would otherwise be a crystal-clear story of economic recovery.
SAP reported quarterly software and software-related service
revenues of $3.19 billion, a 20 percent increase over the same quarter in 2009.
After-tax profits reached $690 million, representing a year-over-year rise of
12 percent. The company reported growth in the United States, Asia, Europe and Latin
America.
“We saw a good mix of revenues among small, midsized and
large enterprises, and we had an increase in deal volume,” Werner Brandt, CFO
of SAP, wrote
in an Oct. 27 statement. “On the product side, Business Analytics remains a
top priority among our customers and continues to be a principal growth
driver.”
However, SAP’s earnings statement noted increased costs
associated with the company’s Oracle lawsuit, as well as “acquisition-related
charges” related to Sybase. SAP’s
$5.8 billion acquisition of Sybase, announced May 12, was widely seen as a way
for the company to expand its mobile offerings and stay competitive via new
revenue streams; it marked SAP’s largest purchase since its $6.7 billion
takeover of business intelligence software producer BusinessObjects in 2008.
SAP has seen a rise in revenues of late, as businesses begin
to spend more heavily on IT in the wake of a massive global recession. But the
company’s competitors, including Microsoft and Oracle, have also used the
brightening enterprise landscape to aggressively push their own
products—pressuring SAP to sign new customers and buttress its existing
offerings.
“The experience we have gained with our more than 100,000
customers over many years tells us that they want choice, openness and
innovation from their technology partners,” Jim Hagemann Snabe, co-CEO of SAP,
wrote in an Oct. 27 statement. “The opposite seems to be happening as more
technology companies want to lock in their customers to a single vendor on one
proprietary technology stack.”
That backhanded swipe seems directly aimed at SAP competitor
Oracle, whose corporate strategy revolves around consolidating enterprise IT
services.
SAP and Oracle find themselves locked in a vicious lawsuit,
with the latter claiming that SAP subsidiary TomorrowNow stole its software
documentation and confidential material via unauthorized access to a customer
support Website. For its part, SAP claims it never saw Oracle’s data, although
it did acknowledge the illegal downloads taking place.
In a motion filed Oct. 22, SAP’s
lawyers asked a federal judge for a gag order on Oracle. Nonetheless,
Oracle CEO Larry Ellison issued an Oct. 26 statement accusing Leo Apotheker,
SAP’s former CEO, of “overseeing an industrial espionage scheme centering on
the repeated theft of massive amounts of Oracle’s software.”
Ellison used that statement to broadside another major
competitor, Hewlett-Packard. “I don’t think [HP chairman] Ray Lane wants to
risk Leo Apotheker testifying under oath as to why he allowed the theft of
Oracle’s property to continue for eight months after he was made sole CEO of
SAP,” he wrote. “I hope I’m wrong, but my guess is that HP’s new chairman, Mr.
Lane, will keep HP’s new CEO, Mr. Apotheker, far, far away from the courthouse
until the trial is over.”
The trial is expected to begin Nov. 1.
Enterprise Applications News & Reviews 
