IBM Schedules SAP On i Summit, SAP Looks To $30 Billion Goal
March 10, 2014 Dan Burger
SAP, the worldwide leader in ERP market share with almost double the market share of runner-up Oracle, is naturally enjoying its dominant position and is confidently forecasting large revenue gains in the upcoming several years. Executives at SAP have raised the revenue bar to $30 billion by 2017.
In January, the company reported $22.7 billion in revenue during its most recent fiscal year. That was an 8 percent increase over the previous year. SAP’s market share stands at 25 percent. Oracle, its chief competitor has a 13 percent market share. Inforand Sage claim 6 percent each, and Microsoft is grabbing 5 percent of the market.
The statistics were provided by the Market Share Analysis: ERP Software Worldwide, 2012, authored by Chris Pang, Yanna Dharmasthira, Chad Eschinger, Koji Motoyoshi, and Kenneth F. Brant.
If SAP says it can add $7.3 billion in revenue in less than three years, who’s going to doubt them?
Analysts at Seeking Alpha point out that SAP is getting admirable performance from annual cloud revenue at $1.5 billion dollars streaming in from more than 35 million total cloud portfolio applications subscribers. SAP’s Web-based business trading community, Ariba, which was purchased 18 months ago, now has approximately 1.4 million participating companies. And HANA, the in-memory database platform, exceeded the 3,000 customer mark–each of these markers being indicators of SAP executives pushing the right buttons.
No mention was made of the potential bump in the road caused by reduced software revenue being the flip side of success of cloud sales. A year ago SAP was reporting double-digit growth in software revenue. The long-term effect on revenue coming from this shift to the cloud is an expected to be a balancing act, but it’s yet to be seen.
Reaching the $30 billion revenue plateau will likely be attainable only with additional acquisitions, however. Seeking Alpha picks online marketing services provider Marketo as a possible target as well as the sales compensation vendor Xactly.
As a side note of interest to IBM i shops running SAP software, IBM is hosting the SAP on IBM i Summit for customers, business partners, and IBMers May 15 and 16 at the IBM Executive Briefing Center in Rochester, Minnesota. The conference is described as a showcase of best practices and advice on deployment of the latest technologies. IBM has a lineup of experts on hand with deep experience using SAP solutions and optimization from IBM’s SAP on IBM i Center of Excellence and SAP on IBM i development teams. Additional information and registration for this event is available here.