SAP just reported its third quarter results, with a 11% growth in new license sales worldwide but a measly 3% growth in the U.S. New license sales growth was stronger in other markets: 14% in EMEA and 25% in Asia-Pacific. SAP said it now expects overall software and related sales for 2007 to reach the upper end of its estimate of 12% to 14%.SAP's growth vs. Oracle's
These results do not look great in comparison with Oracle's most recent quarter (its Q1). Last month Oracle reported
a 35% increase in new license sales, including a 65% increase in application software revenue. Of course, Oracle's results include the benefit of its new acquisitions of Hyperion and Agile Software. Its not clear to me how much of the increase is due to revenues from those product lines, but it certainly can't explain all of the difference from SAP's growth rates.
Although the SAP versus Oracle story is interesting, I'm more concerned with what SAP's results mean for the business software sector overall in the U.S. I note that the market has been strong over the past couple of years, based on financial results for the major vendors as well as observations of the general level of sales activity. Do SAP's quarterly results point to a slow-down? Oracle's results seem to indicate a more positive outlook, although Oracle will say that SAP's slowing growth is caused by Oracle's winning deals against SAP. Complicating the picture: SAP claims its market share is increasing
in the U.S., which is hard to imagine in light of the disparate growth rates of SAP and Oracle, unless they are both taking market share away from smaller players.Win at Wal-Mart
Separately, SAP announced that it had won a deal with Wal-mart
for financial management software. Wal-Mart is known to run mostly in-house developed systems, but apparently felt that the horizontal nature of accounting applications justified a departure from this strategy. SAP will replace some legacy systems while integrating with other internal systems. Terms of the purchase were not disclosed, but--this being Walmart--there's no way this can be a small deal.
In light of SAP's battle with Oracle, the Wal-Mart deal gives bragging rights to SAP--assuming the implementation is successful. Unfortunately, it won't be a quick. The first phase of a multi-phase implementation is expected to finish in 2010.Related postsOracle reports another blow-out quarterSAP sales jump, defying Oracle's PR campaignOracle bids for BEA SystemsSAP to buy Business Objects