SAP has taken a couple of hits from financial analysts recently. J.P. Morgan’s Manoj Singla downgraded SAP from Overweight to Neutral, and Patrick Walravens of JMP Securities issued a research note in which he claims that “the Business Objects sales organization may have missed its Q1 targets by a wide margin in North America.” Given that most companies still don’t use Business Intelligence (the functionality that Business Objects supplies) properly, if at all, that would hardly be a surprise. BI has been slow to get going, and difficult for executives to utilize properly.
Meanwhile, Singla is more bothered by what he called “increasing macro-economic concerns” and “signs of a slowdown in technology spending.” In the past, even in tech’s dog years of 2000-2004, macro-economic trouble and IT spending slowdowns did not impact large enterprise applications providers, so it remains questionable whether the factors identified by Singla will bleed over into SAP’s business. A much more immediate concern is TomorrowNow, which continues to torment SAP by means of the lawsuit that Oracle has filed against it. Oracle plans to go after senior SAP executives as part of this lawsuit, which looks like dragging out for quite a while. Then there’s the $100 million lawsuit Waste Management has filed against SAP.
Combine all of that with hard competition from Oracle, macroeconomic trouble, and a very strong Euro, and it adds up to a tougher time than SAP has experience for some years.
Demir Barlas, Site Editor