Monday, June 8, 2009

Random Rumors around SAP

Steve Ballmer, Microsoft dismissed talk of Microsoft acquiring SAP as random rumors. Talk of IBM acquiring SAP has been discussed so may time.

SAP founders who still hold around 28% stake in the company may not want to sell off to either an IBM or a Microsoft, but their options are limited. There are certain issues which SAP has been unable to address

Geographical Gaps: While SAP has been a global leader in terms of market share, it is essentially a European company. More than half of its revenues are contributed by Europe and around 18% by Germany. It is relatively weaker against Oracle in the US. APAC’s which will be a growth driver has a limited contribution

Gaps in solution offerings: SAP’s infrastructure providers like Microsoft & Oracle are competing against it in the application space.

In SAP, did a turnaround from its organic growth strategy to an acquisitions strategy when it announced its plan to acquire Business Objects on October 7, 2007. While the turnaround has happened in it’s acquisition strategy, it’s still not as aggressive as Oracle’s and gaps in solution offerings still remain. The gaps have in fact widened

SAP’s weakness in the US would be hard to change given Oracle’s strength in the US.

So who will acquire SAP may be a random rumor, its independence in the long term does not appear to be a rumor.

No comments:

Post a Comment