Friday, October 18, 2002

SAP sales and earnings are ... up

Swimming against the tide of diminishing earnings from enterprise application vendors, SAP this week reported 2002 Q3 net income of $198 million, compared with $36 million for the same period in 2001. Interestingly, while product revenue overall was up 3% to $1.65 billion, revenue from CRM sales was up 19% while SCM was down 3%. SAP's press release has more details.

SAP is clearly benefiting in this weak market from its large installed base and dominant position worldwide to maintain license revenues at the expense of most other ERP vendors such as Peoplesoft, which just reported an 11% drop in Q3 net profit and a 20% drop in license revenue. SAP is also getting some uplift from sales of SCM and CRM products, at the expense of stand-alone supply chain and CRM vendors such as i2 and Siebel. For evidence just look at Siebel's quarterly results this week, where it reported a whopping net loss of $92 million on a 34% drop in license fees.