I am just pondering at some of Larry's criticism on SAP as a living
dinosaur with all obsolete technology and been unable to climb to
internet technologies, Java et all.
Despite Larry's bashing of SAP and undoubtedly many SAP clients being
unable to implement a fraction of SAP even after years why are people
spending money on SAP and why is SAP doing well with a technology that
Larry says is obsolete and difficult to use and implement and they are
still doing well.
Can somebody explain this. I am lost I still can't get this is oracle
builds open systems, highly scalable, java/XML and internet enabled
and its arch competition is missing all of this what makes the
competition tick than Oracle.
Is it that Oracle is not good at selling and only good at engineering
products that are not sold properly.
Bel
SAP on track for 2002 as license sales hold up
By James Mackenzie
January 9, 2003 6:57 am PT
FRANKFURT (REUTERS) - Germany's SAP AG confirmed its ability to
withstand a slump in global software spending, saying on Thursday it
would hit its 2002 profit goal as fourth-quarter license sales held up
better than the market had expected.
SAP shares surged after the company, Europe's biggest software maker,
said it expected slightly higher 2002 sales, with operating profit
margins before acquisition expenses and stock-based compensation costs
at least one percentage point over the 20 percent in 2001.
Software license sales in the fourth quarter, traditionally SAP's
strongest, came in at around 950 million euros ($985 million), some
eight percent below the year-earlier figure of 1.03 billion euros.
But license sales, a key indicator of underlying demand, were above
the highest analyst estimate seen by Reuters of 925 million euros and
well ahead of an average estimate of 826 million. SAP's expectations
for full-year overall sales also exceeded analysts' forecasts for a
slight decline.
Like the rest of the industry SAP, which supplies business planning
and Web-based e-business software to some 17,500 customers worldwide,
has been hit by a sharp slowdown in spending on information
technology.
But it has also benefited from the slowdown by taking business away
from rivals as tighter budgets have forced customers to choose
suppliers more carefully.
"This is a very strong performance, no doubt about it," said JP Morgan
analyst David Reynolds, who rates the share "overweight."
"It confirms that in difficult markets, enterprise software customers
clearly feel a lot more comfortable dealing with the large companies
that are going to be around for some time," Reynolds said.
By 1120 GMT, SAP shares were 3.45 percent higher at 88.86 euros,
outperforming a fall of 1.7 percent on the Eurostoxx tech index.
SAP abandoned its specific 2002 revenue target in October after being
forced to lower earlier targets in the face of slowing demand, but it
has stuck to a forecast of 21 percent operating profit margins for
2002.
SAP shares have lost more than half their value since hitting a peak
of 177.40 euros last March, but the shares rallied strongly at the end
of 2002 and have more than doubled in value since October.
GAINING GROUND
SAP has focused closely on cutting operating costs, trimming travel
and marketing budgets and freezing hiring, although it has avoided the
mass layoffs seen at U.S. rivals such as Oracle or Siebel Systems.
But the results also suggested that the group has been building up its
position in its key markets.
SAP's arch-rival Oracle Corp. last month posted a 34 percent fall in
quarterly new license sales in the applications segment in which the
two companies directly compete, although it said the slump in
information technology spending was bottoming out.
According to a survey of 340 software customers by JP Morgan in
November and December, SAP appeared to have been able to implement at
least modest price increases in the second half of 2002 despite the
generally poor investment climate.
Lehman Brothers analyst Coleen Kaiser, who raised her rating on the
whole European software sector to "neutral" from "negative," said
conditions in Europe appeared to be stabilizing and margins should
improve further this year.
"The market environment is not great, but we've definitely hit the
bottom," she said.
SAP gave no regional or product breakdown for its sales, but the key
U.S. market appears to have held up, even if Europe is likely to have
remained the group's core market.
Bill McDermott, the recently appointed head of SAP America, told the
Financial Times Deutschland last month that costs in the United States
had been brought under control and that the unit would meet its
financial targets for the year.
