SAP Update: Zeroes in on the Cloud, Worth $63
SAP (NYSE:SAP) is one of the largest enterprise software giants besides Oracle (NASDAQ:ORCL), Microsoft (NASDAQ:MSFT), IBM (NYSE:IBM) and Salesforce.com (NYSE:CRM). Its stock price has fluctuated widely in the last two weeks but has ended largely flat. There have been some significant developments related to SAP in the last month, which could impact its stock price going forward. SAP announced that it focus on cloud-based and mobile enterprise software in the coming years, just like its competitors – Oracle, Microsoft and Salesforce.com.
Check out our complete analysis for SAP
Last month, it made some major acquisitions which will help it expand its market share in cloud-based enterprise software. It also announced a couple of partnerships that will help it gain a foothold in the cloud market.
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SAP storms into the cloud with new acquisitions and partnerships
SAP recently acquired SuccessFactors, a leading provider of cloud based HR (human resource management) solutions, which provides a set of on-demand services and tools which help companies manage performance, goals, objectives, compensation and other employee related issues. It will be integrating SuccessFactors’ technology into its Business ByDesign ERP suite. SuccessFactors itself acquired Jobs2Web, a cloud-based recruiting platform that enables companies to hire candidates through social networks like LinkedIn, Facebook, and Twitter, which will be integrated with its recruitment management offering.
SAP also announced a partnership with NetBase, which will enable it to offer social media analytics capabilities, and also integrate it with SAP’s existing enterprise business intelligence software. NetBase analyzes and stores data from Facebook, Twitter, LinkedIn and other social media websites. SAP will resell it as SAP Social Media Analytics, enabling it to add social insights to transactional business data from its customers, to create a much more effective product which combines business data and social media analysis.
SAP also teamed up with Google and will integrate its Business ByDesign on-demand ERP suite with Google Apps, allowing its customers to use Gmail and Google Docs with Business ByDesign. The collaboration will help both SAP and Google expand their customer base by offering cross-selling opportunities.
We currently have a $63 Trefis price estimate for SAP, which implies around 15% upside to its stock price.
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