ERP Software Vendor SAP Results Defy Analyst Gloom

In the world of IT analysts, ERP software vendor SAP is too often regarded as “yesterday” because it is neither “cloudy” enough or sufficiently “SaaSy”. As SAP results slipped in 2009, this misdirected drumbeat only grew louder, even to the point where some analysts predicted that SAP would be sold to (in no particular order) Microsoft, IBM, or (hard-to-even-imagine) HP.

I find it unsurprising that since SAP announced its 2010 Q2 results that there have been no articles about the demise of the world’s leading applications software provider. Highlights of these results:

1. Software revenues up 17% year over year
2. Support (maintenance) revenues up 14% year over year
3. Total revenue up 12% year over year.

The best news for SAP is point 1 as the expansion of the installed base through new license revenues is the single most important key performance indicator for an applications software provider. While it is true that maintenance revenues are twice new license revenues, such a ratio is to be expected for a firm that now claims more than 100,000 clients (though the math is really fuzzy here, they do have a huge installed base).

I remain disappointed in the firm for continuing to lead with technology and more technology at the expense of business solutions (no, ERP software is not the answer to every business challenge). I also still harbor serious doubts about the potential success of Business ByDesign (for a deeper, and sunnier, outlook, check out what the estimable Joshua Greenbaum has to say http://snipurl.com/zsx2r).

I maintain that ERP vendor SAP isn’t being sold and is not by any means on the wane. When new license revenues can increase by 17% in an uncertain economy, SAP has little need for clouds or SaaS or any number of new techno-wrinkles called for by the IT analysts.

Michael Doane has 35 years of enterprise applications experience. He is the author of The New SAP Blue Book, a Concise Business Guide to the World of SAP and The SAP Green Book, Thrive After Go-Live. He can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it