SAP posted a strong quarter, suggesting businesses continue to be interested in business intelligence, mobility and other types of enterprise software.
fiscal quarter suggests an appetite for business software among enterprises,
particularly in "hot" areas such as mobility, cloud and business
For the third
quarter of 2011, SAP reported software revenue of $1.18 billion, up 28 percent
year over year. Total revenue (including service revenue) hit $4.8 billion, up
14 percent from the year-ago quarter. Operating profit reached $2.4 billion, a
year-over-year increase of 146 percent.
In an Oct. 26
statement published with those results, SAP co-CEO Bill McDermott suggested
that SAP's focus on mobility, in-memory computing and cloud services had helped
drive what he characterized as the company's fastest-growing revenue in a
seemed generally upbeat about the company and its progress in the business IT
that SAP has embraced a new pattern of corporate growth, marked by changing
behavior with customers and partners," Elizabeth Hedstrom Henlin, an analyst
with Technology Business Research, wrote in an Oct. 26 research note. "SAP's
focus on dedicated, customer-minded software innovation will remain its key
differentiator in the near term."
predicted some whitewater for the industry as a whole, which could affect SAP
heading into the next few quarters.
"We think IT
spending is going to get tough in [calendar year 2012] (especially 1Q) and big
app investments tend to be discretionary," Ros MacMillan, an analyst with
Jefferies & Co., wrote in an Oct. 26 statement. "We would rather be patient
than to chase the stock after such a strong Q and where consensus acknowledges
the conservatism of 4Q."
road map involved new applications leveraging its in-memory technology
platforms, in addition to its HANA system, which the company sees as a viable
substitute for the traditional databases pushed by IBM and Oracle.
technology allows businesses to reduce the time needed for data-crunching
tasks, by moving data from traditional storage devices and into RAM. HANA,
based on this technology, is designed to speed business-intelligence tasks. SAP
applications running on HANA include Strategic Workforce Planning and ByDesign
2.6; other in-memory applications include Sales and Operations Planning and
Cash and Liquidity Management.
In 2012, SAP
plans on launching Business Suite, Business ByDesign 3.0, Business All-in-One
and BusinessOne. The company's existing applications will also be retrofitted
to work with HANA.
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