SAP's financial results in the first quarter surged ahead of other major tech vendors, such as Oracle, IBM, and Siebel that are reporting less than stellar performance.
SAP is reporting an increase of 11% in Q1 net income, with sales up a whopping 27% in the U.S. Revenue in the reset of the world is up only 6%. The only significant trouble spot seems to be Germany, where sales were down 2%, mainly because of sluggishness in the German economy.
Breaking down the numbers further, worldwide software license revenue is up 17%, beating analyst estimates. Software license revenue is, of course, a leading indicator on future performance in that it drives future maintenance revenue, service revenue, and additional seat license sales. In terms of sales by product line, SAP's ERP sales, which account for the bulk of its revenue, were up 12%, while supply chain management software sales were up 9%.
But it's the results in the U.S. that are really striking. Perhaps buyers were really alienated by the Oracle/PeopleSoft hostilities and really did view SAP as the safe choice. If so, it would indicate that SAP's "Safe Passage" program to entice PeopleSoft and J.D. Edwards clients could do further harm to Oracle. Related postsSAP expands grab for PeopleSoft and JDE customersSAP slams Oracle's strategy as, Project ConfusionEllison threatens SAP regarding PeopleSoft supportSAP to provide maintenance for PeopleSoft products