SAP reported rising software-related revenues and net profit, thanks to increased spending by business customers in the wake of a long-term global recession. SAP's recent Sybase acquisition positions it to make an aggressive play in the mobile-software market.
SAP benefited from increased spending on
business software in the second quarter, reporting software and
software-related revenues of 2.26 billion euro ($2.9 billion) and a net profit
of 491 million euro ($638 million). Revenues experienced a year-over-year rise
of 16 percent, while net profit rose 15 percent.
"Customers continue to invest for growth across large, midsized and
small enterprises and within many industries," Bill McDermott, co-CEO
of SAP, wrote in a July 27 statement. "We
had outstanding growth in strategic markets like the U.S.
and we saw continued double-digit growth in key emerging markets in Latin
America and Asia. This solid performance is
due to renewed customer confidence, an ever-expanding ecosystem, as well as
focused execution on our go-to-market strategy."
Other players in business IT, including Microsoft, have seen revenues rise
as both enterprises and SMBs open their wallets for software and hardware. On
July 22,
Microsoft
reported fiscal fourth-quarter revenues of $16.04 billion, due at least in
part to strong demand for Windows 7 and business products.
SAP announced July 27 that it had
completed "the cash tender offer for all outstanding shares of common
stock of Sybase," and that the latter will continue to operate as a
separate company under current CEO John
Chen. With the Sybase contribution taken into account, SAP
expects its software and software-related service revenue for 2010 to increase
between 9 and 11 percent. Without that Sybase contribution, SAP's
business will grow between 6 and 8 percent.
SAP's
$5.8 billion acquisition of Sybase, announced May 12, was widely regarded
as the start of a potential paradigm shift in the enterprise-software
landscape. In addition to helping SAP stay competitive with Oracle via new
revenue streams, the deal offers a way for SAP to expand its mobile offerings
via Sybase's technology.
"While SAP develops and delivers a
wide range of enterprise business software solutions, Sybase's offerings are
skewed toward the global mobile market," Pund-IT Research analyst Charles
King wrote in a May 13 research note.
The deal marked SAP's largest acquisition
since its $6.7 billion purchase of business intelligence software producer
BusinessObjects in 2008. While SAP and
Sybase had in the past collaborated on projects such as applications for the BlackBerry,
which involved SAP layering functionality
atop a Sybase mobile platform, the deal will see both functionality and
platform consolidated under one roof.
With the increased prevalence of smartphones and other mobile devices within
the enterprise, SAP sees developing for
those platforms as key to its future growth.
"In the past 18 months, what we've been noticing is that
device-specific experiences are the ones getting huge amounts of adoption,"
George Mathew, SAP's general vice president
and general manager for Business Intelligence & In-Memory Analytics, said
during a July 22 interview with eWEEK. "There is a real compelling
strategy for us to create a minimum baseline for how BI content is more
actively shared between devices; that's the starting point for creating
device-specific experiences."
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