SAP Watch

Jul 13 2006   1:10PM GMT

SAP loses ground to Oracle


SAP reported lower than expected sales in its second quarter. Company executives said the software vendor also lost market share to Oracle and Microsoft, adding fuel to the battle raging for ERP market superiority.
SAP CEO Henning Kagermann said the market share loss was only a blip in what has been 12 consecutive quarters of gains against the competition. He told reporters this morning that SAP had problems processing sales orders at the end of the quarter. Safe Passage wins are also slow to process, he said. The software vendor counted 70 wins in the second quarter.

”Demand hasn’t changed and the environment hasn’t changed,” Kagermann said.

Analysts have told me that SAP’s consecutive quarters of significant gains was bound to be interrupted. SAP has been taking advantage of Oracle’s weaknesses as it reorganizes its sales force around its billions of dollars in company acquisitions. The uncertainty around how Oracle is integrating the acquisitions coupled with the reshuffling of its sales force may have resulted in SAP’s strong growth period, according to an analyst from Forrester Research. Financial analysts also agree that double digit license revenue growth in a mature market is difficult to sustain.
-Rob Westervelt

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