Enterprise applications giant SAP grew application sales faster than arch-rival Oracle for the first time in eleven financial quarters in its most recent reporting period, according to an investment analyst at financial services group Matrix.
SAP today reported a 35% increase in software revenue (excluding the impact of currency fluctuations) to €802 million for the three months ending 30 June 2011.
Comparing that to the 18% application license growth Oracle saw in its latest quarter reveals the German company to be outpacing the Silicon Valley giant in the applications space for the first time since the third quarter of 2008, says Matrix’s co-head of research Rajeev Bahl.
"SAP is getting its act back together," says Bahl.
The company’s controversial maintenance fee hike and a lack of visibility into its technology roadmap dissuaded existing customers, which account for 80% of sales, from extending their SAP investments in the last few years, Bahl says, but it appears to have resolved these issues.
"SAP has put the maintenance issue behind it, and it has communicated the strategy of using Sybase technology to mobile-enable its applications clearly," he explains. "That has given customers greater confidence in the company."
The mobile strategy is proving particularly effective, Bahl says. "In organisations that use SAP, only around 23% of employees touch the application," Bahl explains. "SAP’s challenge is to grow that proportion, and putting applications on mobile devices is a great way to do that. I’ve seen huge customer demand for mobile SAP apps."
The other technology strategy that follows the acquisition of Sybase, SAP’s analytics appliance HANA, is still more of a "university project" for customers, Bahl says. "Customers are interested, but very few of them are ready to step up and run their businesses on it."