27
July
2010
|
11:57 AM
America/Los_Angeles

Interview With SAP Co-CEO Jim Hagemann Snabe

SAP, Europe's largest software company, posted strong revenues and earnings for its fiscal Q2. The results bode well for US IT spending. SAP also said it had completed its acquisition of Sybase.

Eric Savitz at Barrons reports:

SAP (SAP) posted Q2 revenue of 2.894 billion Euros, up 12%, or 5% in constant currencies, and ahead of the Street consensus at 2.75 billion. Software revenue at the German software giant was up 17%, or 5% in constant currencies, while software and software related services revenue was up 16%, or 8% in constant currencies. EPS of 46 Euro cents was one cent below the Street, as operating margin of 27.8% came in about a point below expectations.

The company's results showed strength in the U.S., with software and software-related services revenue up 18% in the U.S. in the quarter on a constant currency basis, but Japan down 9% on the same basis, and EMEA ex-Germany down 1%.

For the full year, the company sees software and software-related service revenue up 9%-11% at constant currencies. The company said it expects to grow 6%-8% excluding the acquisition of Sybase. Non-IFRS operating margin is expected to be 30%-31%, up from 27.4% a year ago at constant currencies.

I spoke with Jim Hagemann Snabe, co-CEO of SAP this morning. Here are some notes from our conversation:

- We benefited from some tail wind from currency effect but revenues were strong.

- We did more than 10,600 deals in the quarter. It shows that we have become a strategic choice for many companies.

- This Friday we will make our cloud offering Business byDesign available. We delayed it a year so we could make sure we got things right. We want to redefine the category and we now have a category killer. Our cloud offering will be ahead of many legacy clouds.

- At the moment, the cloud computing market is very narrow in its scope. We hope to change that over time.

- Mobile data is very important and that is something that Sybase will offer. We have a great iPad application (see video below.)

- We want to be the best supplier of hybrid solutions. Not everybody needs cloud computing.

- There is a massive data explosion happening. Data is doubling every 18 months. Companies want to run everything in memory, they want their analytics to run in memory. This will become the next generation cloud. Speed will become very important.

- Business byDesign will offer the best TCO (total cost of ownership) savings. But it will be a while before it makes a significant contribution to earnings. We want to make sure we have the best offering, we want to get reach before getting rich. We want great references so that we won't have to push the service but benefit from "pull."