Biting the hand that feeds IT
Biting the hand that feeds IT
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Original URL: http://www.theregister.co.uk/2007/04/25/sap_growth_oracle/
Sapphire SAP has assured investors and competitors it can achieve double-digit revenue growth without succumbing to an M&A rampage.
Chief executive Henning Kagermann told media attending his company's customer and partner event that SAP would reap success by making it easier for customers to consume enterprise services, not by purchasing customers through consolidation.
Kagermann's company has committed to 100,000 customers by 2010, up from its current 37,000.
Rival CEO Larry Ellison said Oracle will achieve an annual rate of revenue growth of 20 per cent through acquisition and "organic" growth. Oracle has spent more than $20bn purchasing 23-plus companies since early 2005, and last year reported a 22 per cent revenue gain - although expenses increased in lock step with revenue.
That, combined with Oracle's SAP attack tactics, and the fact SAP's last year missed expectations, delivering 13.5 per cent growth instead of the anticipated 15 to 17 per cent range, has left some on Wall St feeling unsettled over SAP's prospects.
It's probable that some have been whispering in Kagermann's ear over the judiciousness of a prudent acquisition or two to help match Oracle, in the way certain analysts in the past advised Sun Microsystems to spin out Java.
Kagermann, though, held firm. Asked about the effects consolidation and competition are having in an environment where enterprise spending is down, Kagermann said he believes SAP can hover above the forces of consolidation and slow down.
"[We are] doubling the addressable market to make it clear to investors that SAP doesn't depend on [the] growth rate of the markets, and we create our own markets. We have 25 per cent market share today. If we go for 35 to 40 per cent, we will have more than double digit growth for the next few years," Kagermann told press, analysts, and bloggers.
"Consolidation is being driven by one company [Oracle], which we are not following because it's not a good solution," he said.
SAP claims to have taken 550 Oracle customers. ®
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